Details emerged this evening on the MySpace music service that News Corp is pitching to labels (and reportedly offering labels equity in the new company). Greg Sandoval at CNET NewsBlog posted information obtained from two sources. According to Sandoval, ad-supported music would be available as both downloads and streams, and News Corp brought up the possibility of adding "Buy Now" buttons.

The Financial Times also weighed in on News Corp's plan for a MySpace ad-supported music service. The wording ("would allow consumers to listen to music for free on their computers") hints that the service will not offer downloads, but no more details are offered. Just the fact that the Financial Times would write about the proposed service is the most important aspect of the article.

After the flat launch of ad-supported site SpiralFrog and the embarrassing and incomplete launch of ad-supported P2P service Qtrax, it's obvious a major player needs to step in and put together a service that can win over consumers. The labels need a company like News Corp and News Corp, as MySpace digs in for a fight against Facebook, needs record labels' involvement. Good timing.

Posted by Glenn at 10:49 PM | Link
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• Ad-supported download site SpiralFrog has received a much-needed $2 million in additional funding in the form of convertible notes. The notes' interest is a tidy 12% annually, interest is to be paid quarterly and the principle is due on April 19, 2008. Between the company's IPO and these convertible notes, SpiralFrog has taken two of the more costly routes to raising money. (Press release, via paidContent)

• Digital track sales rose 47.7% in Britain in 2007. CD sales dropped 10%, according to the BPI. (Times Online)

• eMusic closed out 2007 with more than 400,000 subscribers (it was at 350,000 in November). The download site doubled its forecast for Christmas Day new customer trials. (Press release)

• An article for California residents or retailers doing business in California: A new California law, which went into effect yesterday, allows gift card holders to redeem for cash a balance of less than $10. (Modesto Bee)

• Antony Bruno has a list of artists that could possibly follow in Radiohead's footsteps. (Billboard)

• EMI artists are worried upcoming marketing budget cuts will hurt their sales. Gee, you think? EMI's problem is the same that William Hesketh Lever had a century ago: Half the money it spends on advertising and marketing is wasted, and the trouble is it doesn't know which half. If Terra Firma can figure out which half is wasted, EMI artists have nothing to worry about. But you know what? EMI artists should be worried. (Financial Times)

• MeeMix, which streams music matched to users' tastes, went live yesterday. (VentureBeat)

Posted by Glenn at 10:33 AM | Link
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In a quote to the Globe and Mail, SpiralFrog CEO Joe Mohan succinctly framed the difficulty in selling his business model:

"It's like going to General Motors and convincing them to give away the cars for free, in return for half the gas money. This was not an easy undertaking."

Getting label support will be tough if that's an appropriate metaphor. Give up a chunk of money for half of some trickles of revenue? The slickest of salesmen would have a hard time proving the value in that deal, and he might come to realize he's in the wrong line of businessl. It might work if people buy a lot more gas. Similarly, SpiralFrog's pitch hinges upon the bet that people will download a lot more music. Personally, I'd take a wait-and-see approach. If people actually binge on ad-supported music -- unlikely, I'd bet -- then it would be worth jumping in.

Posted by Glenn at 5:36 PM | Link
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From the "Where Are They Now?" file comes SpiralFrog. There were a couple posts about the ad-supported music site yesterday.

One was at Silicon Alley Insider, which mentioned the invite-only Beta. "We hear they might launch next month" wrote Peter Kafka. "SpiralFrog's site says it has 700,000 tracks available, or less than 20% of iTunes' 5 million," he wrote. Of course, that one major that has a deal with SpiralFrog is Universal Music Group, which has a 28% share on the digital album share and a 36% share of the digital track market. That's the one major any start-up should have.

News.com was also on SpiralFrog yesterday . Wrote Greg Sandoval, "(founder Joe) Mohen said SpiralFrog will offer 700,000 songs at launch and be the first ad-supported site to offer video for download. He estimated that SpiralFrog will be ready for a public launch sometime before the end of the year."

Yesterday paidContent linked to a report of the Canadian beta that was posted in May. In the words of DigitalJournal, "My personal opinion is that this will cut straight into Apple's market share and it may make the marketplace more competitive as it moves forward."

I'll reserve an opinion until I test out the site, but I have a hard time believing SpiralFrog is going to do much to transform the digital music landscape. The company's executive staff has been a revolving door, and the product launch is nearly a year behind schedule. Then there's that pesky problem with the iPod-incompatible file format. Free, ad-supported music could take off, but is this dysfunctional company the one to make it happen?

Posted by Glenn at 10:37 AM | Link
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