In the Brave New World report last year we wrote about SpiralFrog a free music download service whose business model is based on advertising support. The service was due early in the year and when it didn’t happen we assumed it to be one of those great ideas that may never make it. Well the beta version of the service has been launched in North America. The service will offer over 700,000 music tracks and videos for free and rely on advertising to generate revenues. The licencing companies include Universal, EMI and BMI, that covers three out of the top four. The long overdue full official launch of the service is expected before the end of 2007.
The potential impact of this model is huge and it could revolutionise what we download and how we download it. Coupled with the Steve Jobs' DRM-free movement we can see a completely different music model in the near future. After all, why pay when you can get it ‘free’ and why restrict what you can do when you can elect not to have restrictions? When you add the Prince free album via newsprint its easy to see a value chain that is being not only redefined in real time, but one where there is likely to be disintermediation in a big way. The record producers and High Street retailers are not companies we would invest in.
Can’t wait till hits the UK!
