SpiralFrog Loses $3.4 Million On Free Music
Nov 20th, 2007 | By James Lewin | Category: Digital Music 
Remember Spiralfrog, the much-hyped free-music service that offers DRM-laden tracks incompatible with most people’s portable media players?
Here’s our summary of Spiralfrog from when the service went live:
The site lets you download tracks with Windows Media DRM. They can be used on some Windows computers and with compatible media players. Users need to register and visit the site every month or the tracks become unplayable.
The tracks cannot be burned to a CD and are incompatible with Macs and Apple’s iPods and iPhone.
According to the company’s SEC filing, in Q3, Spiralfrog lost $3.4 million on revenue of $20,400. The company has just $2.3 million in cash right now, and a total stockholder‚Äôs deficit of $6.2 million.
If building your business on ad-supported Windows Media DRM’d music wasn’t a bad enough idea, here’s how Spiralfrog plans to get themselves out of this hole:
“Execute marketing campaign in the United States aimed at 13-34 year olds, through one or more of the following approaches: hire gorilla (sic) marketing firms for unconventional promotions; consumer targeted press releases; advertising on some of the youth community sites; or hiring ‘bloggers’ to attract attention to us on the internet.”
Note to Spiralfrog management: You don’t have to pay “bloggers” to write about your service when your service doesn’t suck.
Note to investors: The tiny amount of money that people now pay for digital music isn’t a pain point that you can build a business around solving. Helping people find the music they really like, when faced with a flood of free music, is.
via paidContent
Oh. My. God! How do some people even get money to do this stuff? Somewhere there’s a baseball bat with the names of the CEO’s shins etched into it. And if there’s not this instant, there will be shortly… after his investors read the line about “gorilla” marketing. It’s GUERILLA marketing, you boneheads! No wonder you’re business is tanking!
Eric
I don’t know, Eric. I really liked the image that “gorilla” marketing conjured up in my mind’s eye. I was thinking that maybe they were going to hire well-trained primates… or else marketing hacks in big furry suits. 🙂
LOL Elisabeth! I hadn’t thought of that! I was conjuring images of guys in Leisure Suit Larry polyester suits trying to cram cheap earbuds into chimpanzee ears and telling ’em how it’ll only cost bananas a day!
Eric
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