Also other studies have revealed that a growing number of music fans are downloading their favorite songs rather than buying CDs.  According to the latest research released by Nielsen SoundScan in the last six month a 229.8 million albums were sold in the U.S, down by 10 percent compared to the same period of 2006. During the same period the digital tracks sales increased 49 percent to 417.3 million, according to Nielsen SoundScan figures.

As you can see the business model chosen by SpiralFrog seems simple and efficient. The company tries to generate income from the ads displayed on the site and that are visualized by those who download the music. The generated income is divided with the music labels that Spiral Frog has contracts with.

SpiralFrog has signed the deal with Universal Music last year in August and the record company reportedly received an upfront payment from SpiralFrog and a portion of the company's advertising revenue.

Following the announcement of the deal with Universal Music, SpiralFrog had captured some fame and even some analysts and media observers dubbed it as an iTunes killer. But after SpiralFrog missed its scheduled launch at the end of 2006 and after the December firing of CEO Robin Kent, the project seemed to be in danger. In April this year Robert Kent and SpiralFrog's Chief Marketing Officer Lance Ford, founded Rebel Digital, an advertising consulting firm, which will help Qtrax, a SpiralFrog competitor set to debut in October.

But finally, after months of beta testing SpiralFrog has made it and the site is up and running.  

“We believe it will be a very powerful alternative to the pirate sites. With SpiralFrog you know what you’re getting … there’s no threat of viruses, adware or spyware.” said Joe Mohen, chairman and founder of the service.

SpiralFrog opened with more than 770,000 songs and 3,500 music videos from numerous independent labels and Universal Music Group. In fact, last week SpiralFrog and INgrooves announced a licensing agreement to make INgrooves’ full catalog of audio and video files available on SpiralFrog. Nearly 100,000 songs and 2,000 videos from INgrooves and its distribution division, ONE Digital, are included in the agreement. The deal also enhances SpiralFrog’s offering of international music, with the inclusion of INgrooves’ iMusica catalog of 4,000 Brazilian albums.

The start seems good, but if we are to take into consideration the fact that iTunes has somewhere around 6 million songs, SpiralFrog should move faster. As a matter of fact, the site, which also boasts content from independent record labels, expects to have more than 2 million tracks over the next several months, Mohen said.

This doesn’t mean that if the songs are free they are not protected. There is a catch: users won't be allowed to burn songs to a CD. Users also will have to visit the SpiralFrog website once a month to watch more ads. Otherwise, digital locks on the music will make it inaccessible.
Indeed, the tunes can be transferred on a digital player (obvious all except the iPod) but the users are allowed to copy the songs to no more than two portable music players or compatible mobile phones at one time.

SpiralFrog itself is mostly browser-based, but requires you to download a 'download manager' which is about 1MB in size and you should provide information about your age, gender and ZIP code. The information is used to determine what kind of ads you will see while browsing through the music catalog. In order to keep their user busy SpiralFrog included in its site lots of reviews and info on the artists.

Still it remains to be seen if SpiralForg will became a real competitor for iTunes, especially since Apple started to offer DRMFree songs from EMI’s catalog.

For the moment SpiralFrog’s fame and survival depends on the quality of its services and the number of songs it will be capable to offer.