SpiralFrog says goodbye, assets surrendered to creditors

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690px-Spiralfrog.svg The ad-supported music service SpiralFrog has quietly closed its doors, after its site went down and its assets been ceased, according to a source talking to CNET News.

SpiralFrog started in 2006, offering free music to the public but also put in advertising in the music, with the media questioning if this would challenge the dominant Apple iTunes, or could be the answer to music piracy on file sharing networks.

It managed to sign two record labels, one with Universal in the summer of 2006, and one with EMI – two years after signing Universal. It, however, could not meet Imeem or the competition, as it did not offer Sony Music Entertainment or Warner Music in its catalogue.

But the downfall of the company was that it had been riddled in debt. The company borrowed $9 million, but was given an additional year to repay it in March of 2008. However, a report in Digital Music News has said that it could not pay the debt.