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Would-be iTunes Store killer SpiralFrog goes extinct

The ad-supported music Web site SpiralFrog went dark Friday just short of 18 months after it launched with the goal of luring customers from pirate sites.

The music was free, but only as long as the customer maintained a subscription. Songs could not be burned to a CD. SpiralFrog-obtained music is expected to stop playing for current customers within 60 days.

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Although many in the media at the time SpiralFrog launched suggested it could grow into an "iTunes Store killer," I disagreed. I predicted SpiralFrog would fail with a year because of its many drawbacks, not the least of which was incompatibility with Apple's market-dominating iPod.

SpiralFrog employed Microsoft's PlaysForSure digital rights management, limiting the service to WMA-compatible MP3 players only. That excluded Microsoft's own Zune as well as the iPod.

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Customers also had to renew their subscription every 60 days or lose access to their music. And SpiralFrog could only get two of the four major labels on board (Universal and EMI), which restricted the breadth of its catalog.

Changes in the competitive landscape since SpiralFrog's Sept. 2007 launch further destabilized its business model. Within a few months Amazon was selling DRM-free MP3s. The iTunes Store went completely DRM-free this past January.

According to a story on CNET, the collapsing economy and the resulting shrinkage in advertising pushed the company over the brink. A heavy debt load didn't help, either.

The demise of SpiralFrog, along with another ad-supported music Web site (Ruckus, which shut down Feb. 6), implies that particular model may just be unworkable.

Certainly such sites have never seriously threatened Apple's iTunes Store, although I think they would have fared better had they been compatible with iPods.

How is it all those iPod killers, iTunes Store killers and iPhone killers never quite land that fatal blow?


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