In what may signal a major shift in the recording industry's strategy, Universal Music Group announced Tuesday it plans to make its entire music catalogue available free to consumers as online downloads… sorta.
On the surface, it appears to be a win-win situation for record labels plagued by declining CD sales and for an audience reluctant to buy music online. UMG is the world's largest music distributor, with a roster including the likes of U2, Kanye West, and Mariah Carey. The deal they have inked with start-up SpiralFrog allows consumers to access and download UMG's entire library at no cost – provided they're willing to watch advertising as they download the music.
It's a risky venture fraught with a number of caveats.
Hoping to reach a core 13-34 year old demographic – a marketer's dream, and also the age group most likely to pirate music – SpiralFrog is banking on the assumption this demographic will be willing to exchange their time for free music. It sounds logical enough until a 90 second download time is figured into the equation – considerably longer than a download from iTunes or other online retailers. In a target group not known for patience, it's an eternity.
There are other issues as well. SpiralFrog downloads are not iPod compatible. This may be a boon for Microsoft, whose software powers most other online music sites. Microsoft has also announced plans to release its own player later this year. Apple and iPod are the gold standard in online music and leaving them out comes with risk. In addition, SpiralFrog will require users to utilize the site at least once a month, and it only allows storage on a hard drive or mp3 player – no CD burns. It's also rumored that downloads self-destruct after six months, requiring users of the service to download songs repeatedly.
Other questions arise from a creative viewpoint – how willing will recording artists be to have their music associated with advertising over which they have no control? Politics and social issues are often inherent in pop lyrics. Even when they're not, they can be manipulated to fit into any context of an advertiser's desires.
SpiralFrog chairman Joe Mohen brushes off all such concerns. "The currency we're using is time," he says, adding, "We believe that advertisers will pay to show those consumers ads, and that those payments will rival what companies get from iTunes and other online retailers."
That may be, but doubts remain. Details of the agreement betwee UMG and SpiralFrog are undisclosed, and SpiralFrog's business plan is sketchy at best. A launch date has been set as "late 2006." The company claims to be in talks with other labels, such as Sony BMG and Warner, but no commitments have been confirmed. Regardless, the basic idea may be implemented in a more fleshed out form by online retailers in the future.