Report: SpiralFrog May Change Its Management
March 17, 2009 at 5:32 AM (PT)
SPIRALFROG, a pioneer in offering ad-supported music downloads, is at a crossroads as management is in danger of losing control of the company, reports MUSICINDUSTRYREPORT.ORG.
According to multiple sources, including current and former employees, the company’s founder and chairman, JOE MOHEN, has told associates and friends that he may be forced to hand the company over to investors. The sources also said that MOHEN has said a shutdown of the website could occur as early as next week. MOHEN told CNET News he was unable to comment, citing poor cell phone coverage at his location.
NEW YORK-based SPIRALFROG made a splash in AUGUST 2006 by attempting to give away music that would be paid for through advertising. A licensing deal with UNIVERSAL MUSIC GROUP, the largest of the top four music companies, immediately gave the site credibility. Media outlets such as THE NEW YORK TIMES, REUTERS and USA TODAY speculated about whether SPIRALFROG’s business model was the answer to the music industry’s problems.
One person close to MOHEN said that even if a management change did occur, SPIRALFROG could continue to exist depending on what investors decided to do. One of the largest investors is CONNECTICUT-based 3V, according to the sources. Representatives of the company were not immediately available for comment.