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Ad-supported, free music download service SpiralFrog has announced an additional $2 million in funding today through the "private placement of Senior Secured Exchangeable Notes". It looks like the principal amount is due on April 19,2008 and can be converted to common company shares. The release was very short and didn’t contain many details.
I haven’t heard much from SpiralFrog since our last post just about a year ago when many of the company execs bailed. Nick covered the company in August and noted that the system is DRM heavy so that the songs can be provided for free. It looks like each download is accessible for 30 days and then has to be renewed by viewing and interacting with more ads. It’s an interesting approach – too bad the DRM haters will hate on this as well even though it’s not the same as a music purchase.
The release noted that SpiralFrog intends to use the net proceeds from the offering to fund the growth of the company, including for the acquisition of additional content for the site.
From Mediapost, Ad-supported music company SpiralFrog has reportedly hit a rough patch. CEO Robin Kent, former CEO of Universal McCann Worldwide, was forced out late last year, according to CNET News. At least five other execs and three board members left in his wake, CNET reported.
SpiralFrog defines themselves as a new online music destination, offering ad-supported legal downloads of audio and video content licensed from the catalogs of the world’s major and independent record labels. The service is set to launch in the first quarter of 2007.
Last summer, SpiralFrog announced it intended to launch a music service offering free ad-supported downloads. At the time, the plan was to require users to spend about 90 seconds per track, or two minutes per video, navigating through pages that displayed ads next to photos, articles or other content.
Marshall Kirkpatrick reviewed the service when it launched and wasn't very impressed overall. His comments include, "SpiralFrog will offer free downloads wrapped in a still undisclosed form of digital rights management technology. How tired."