Music site Spiral Frog goes under after suffering huge debt

Spiral Frog Home page

Spiral Frog, one of the early entrees in the ad-supported music area, failed to make its debt payments and has gone under.

 The company's Web site went dark yesterday evening at around 7 p.m. EST and had its assets forked over to creditors, according to CNET.

During its fleeting three years in business, the company endured many problems, including unwilling labels, management in-fighting, and DRM problems.

The music industry was keen on preventing consumers from downloading songs for free on file-sharing sites, and the Spiral Frog model offered a model that seemed to satisfy both parties:  the site would reach out to advertisers to underwrite the download fees - and that revenue would be passed on to the music industry.

The site had ad-supported music from Universal Music Group and EMI, Spiral Frog struggled to pick up additionally studio partners.

However, the real trouble began when Spiral Frog accumulated a $10 million debt that it just couldn't keep up with, details of which were reported by Digital Music News last month.