Can SpiralFrog thrive without portable support?

Industry-approved, ad-supported music download service launches U.S. beta. But without support for transferring material to portable devices, it's hard to be optimistic.

SpiralFrog is a proposed online service that would let users download songs for free in exchange for viewing some sort of advertising. It got some press coverage last August when it announced an agreement to license the music catalog of Universal Music Group, the largest of the four major labels. Over the next few months, however, a missed launch date and executive shake-up led many to write it off as dead.

But the company survived, and now its founder, Joe Mohen, is heralding the beginning of a closed beta test in the United States, with wide release expected by the end of the year.

It seems as if Mohen has a good grasp on the realities of the online-music business, naming pirated music from file-trading networks as SpiralFrog's main competitor, rather than paid downloads from iTunes and the like. But based on this review of the beta from a Canadian publication (the beta launched there in May), there seems to be a crippling lack of portability.

You can't transfer songs from the service to an iPod/iPhone or to a Zune. Wired's preview from last summer explains that the service is part of Microsoft's PlaysForSure logo program, meaning that it uses a version of Windows Media DRM (digital rights management) that's not compatible with Zune. (And Apple's portable devices can't play Windows Media Audio files at all, protected or not.) Nor can you burn the tracks to CD or DVD.

Instead, you're limited to playing tracks on your computer, or on one of the non-Microsoft players that supports PlaysForSure. These players make up less than 20 percent of the market, and this share could fall further, if Microsoft releases an inexpensive flash memory Zune model in time for this holiday season (which is widely expected but hasn't yet been confirmed.)

The only benefit of compressed digital audio is portability--nobody's listening to MP3s for their sound quality. Cutting out more than 80 percent of the portable market seems like a recipe for defeat. Not to mention that only two of the majors have signed on--Universal and Sony/BMG, with EMI and Warner so far staying away. This means that SpiralFrog is launching with 700,000 songs, compared with more than 5 million for iTunes, and at least 2 million for the Zune Marketplace and most other services.

One tantalizing possibility: SpiralFrog could team up with a cell phone maker and wireless carrier to create a competitor to the iPhone. Offering free over-the-air downloads could help it compete against iPhone's computer-tethered paid-download model, and this distribution method would probably be more amenable to the content owners--it's hard to strip the DRM from a song that's stuck on a device, but much easier if that file has to pass through a computer first.

I've signed up for the beta, and if they let me in, I'll test it on a PlaysForSure player and share how it stacks up.