Charles Griffin

In late August, Universal Music Group (the world’s largest music company and parent of dozens of labels such as Geffen Records, Motown and Universal Music Classics) announced its agreement to offer free legal downloads of music from its entire, vast catalogue through a new online service called Spiral Frog.

Industry consultant Celia Hirschman said in a radio interview that the major labels each negotiated with New York based Spiral Frog to get a $2 million upfront payment. It’s unclear how much, if any, of that pre-launch money will go to the artists themselves.

The company will generate revenue and pay royalties to artists and record companies through advertising. Perry Ellis, Levi’s, Aeropostale, and Benetton may be among the companies to place advertisements there.

What will be the nature of this advertising? According to Reuter’s, consumers will be subjected to a 90 second audio advertisement for every track downloaded. That’s 15 minutes of advertising for a 10-track album. (Imagine downloading Schubert’s song cycles Winterreisse or Die schöne Müllerin, where each track would be roughly 2 minutes!) Spiral Frog describes it thusly: “The company’s research revealed that consumers are more than willing to ”˜pay’ for their content by watching non-intrusive, contextually-relevant, targeted advertising in an online entertainment environment where advertising is already part of the overall experience.” Brace yourself, while corporate America tries to sell you it’s wretched things.

Rumors are rampant among bloggers regarding what happens after that, because of the unknown nature of the particular Digital Rights Management technology that will be embedded into all the tracks. They haven’t disclosed it yet. According to Spiral Frog’s press release, “Digital rights management technology is built-in to all audio and video content as part of measures the company and its partners are actively taking to address piracy.” DRM is, to put it lightly, a controversial subject. See what wikipedia says about it. In the end, though, piracy is not a technical problem, it’s a social one.

Some suggest that the track will be erased anywhere from one month to six months after the download, with various scenarios involving whether or not the consumer logs back in to the website within a certain period, and views more advertising to retain the tracks’ viability. Others suggest there will be links to third party sites of the record labels’ choosing if you’d like to buy your freedom to at least skip the ads.

Spiral Frog states that its intention is to combat piracy by offering a legal alternative to piracy, which, according to International Federation of Phonographic Industries (IFPI) outpaces legal downloads by an estimated 40 tracks for every 1. Incompatible with the ubiquitous iPod MP3 player, the in-between-the-lines intention is to take down the 500-pound gorilla, iTunes, which has maintained its 80% share of legally downloaded music for so long it’s the envy and target for everyone from Bill Gates (Zune) to MTV (Urge). I would not be the first to suggest that iTunes’ success is due in no small part to its being DRM-free.

The SpiralFrog website is still dormant, though due to go live in the U.S. and Canada in December 2006 (just in time to shake things up for Christmas-Hanu-kwanza spendphase?) and in the U.K. in January 2007. The IFPI has predicted that 180 million MP3 players will be sold worldwide this year, many of them incompatible with Apple’s services.

If you want to see some alternative business models to iTunes that are also DRM-free, see:

Magnatune
Amie Street
Tamago