A Spiral Frog- A Solution to the ongoing DRM Saga?

SpiralFrog based out of New York offers an innovative solution going up against industry giant itunes, by providing consumers an alternative from premium downloadable music. SpiralFrog (www.spiralfrog.com) is a new online music destination offering advertising-supported legal downloads of audio and video content. SpiralFrog offers music-lovers a compelling alternative to illegal file-sharing and pirate sites. How does the record label fit into this equation? The licensed music comes from the catalogs of the world’s leading record labels and from independents. SpiralFrog has made agreements with such industry giants as EMI, UMG and independents as Kudos and Click Record Productions. Does this sound too good to be true? Free music? Well not exactly. Spiral Frog works by exchanging music for advertisements. The management team explains:
“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.”

This will be an interesting solution and success I believe will be based on the extremity of the advertising that must be consumed in exchange for the free downloads, and repetitive requirements of logging in to maintain membership and access to music downloads. After all nothing is for free.

The site was set to launch Q1, 2007 but is still not up and running. Recent publications have shown that CEO Robert Kent was fired. Other reports say six members of the company's executive team and three directors have left. Possible flaw in the business model?