IMV35 : SpiralFrog's Ad-Supported, Legal Audio & Video Downloads

The following is a transcript for IMV35 : SpiralFrog's Ad-Supported, Legal Audio & Video Downloads. The original podcast is located here.

Announcer:

Welcome to the Internet Marketing Voodoo podcast, brought to you by MindComet. And, now, here’s your host, Paul Lewis.

Paul Lewis:

Welcome to Internet Marketing Voodoo. I’m your host, Paul Lewis and today’s topic is ad supported music downloads. Our guest is Lance Ford, chief sales and marketing officer of SpiralFrog. Lance, can you start off by telling us a little bit about yourself and what SpiralFrog is?

Lance Ford:

Yes, sure. I’ve grown up on the magazine publishing side actually, --the last eight years, you might have heard of Maxim magazine, we launched that, which was a big hit with the same demographic, actually we’re going after with SpiralFrog along with Stuff magazine and Blender, which was a music magazine, all of which still exist. I was approached by, actually, the CEO and my partner in this is Robin Kent, who’s chairman of Universal McCann, the ad agency. He had this very clever idea for free, legal music. He got the idea funded back in March and then suggested that I come and partner with him to create what we hope will be a huge music destination and a site that will be not only encyclopedic in music in terms of the information that we have, but the brilliant core competency of being able to download free and legal music. That’s what SpiralFrog is.

Paul Lewis:

Great. And what kind of music are listeners going to be able to find on SpiralFrog? What record labels are you working with?

Lance Ford:

We have signed deals with Universal Music Group, which is the largest label in the world as you might know, over thirty-two percent market share. We’ve signed most of the independents, who are very anxious to work with us, it’ll be great exposure for their bands and actually that’s a lot of the music that is downloaded more frequently anyway--to a lot of the independent labels. We actually have to clear label and publishing separately, it’s just the nature of the beast. And we have cleared publishing rights with EMI Worldwide and they are close to securing a deal with them on the label side as well. These talks are, quite frankly, complicated and quite advanced. We anticipate maybe sixty percent of all music available at launch, which could be as early as December but probably no later than January when the site would go live.

Paul Lewis:

Great. And what is the experience for the end consumer? When they go to the site and download music, tell us a little bit about how that works.

Lance Ford:

Go onto the site and you would probably be searching for music. You’d be discovering the site and the site’s all about discovering music so when you first come onto the site, probably what you’ll be doing is getting the lay of the land and realizing that there’s a lot of music inventory here and you need to figure out what you want or if you don’t know what you want, you’re gonna be searching the search function and this will be very sophisticated and allow you to search by anything from lyric, artist, to album, song. You’ll be turning pages probably doing that before you’ve even started to download a song; then once you do find a song, this’ll be the first time you’re on, you’ll click on that song to download and then you’ll be asked to register, just one time, and when you register and then it's a download client, you know, so it’s an application that you’ll now download onto your computer, and we will ask you for this information, everything from gender and age, zip code, maybe email or nickname or some way to communicate with you if we can, if you choose to allow us to.

Then what’ll happen is the song will start to download. It’s a ninety second download guaranteed every time, but we do need you to stay on the site while the song is downloading. And what will happen is while you are navigating your way through the site, hopefully being entertained by the editorial nature of SpiralFrog, the timeline will follow you around wherever you are, there’ll be what is called a download manager, it is an icon that’ll follow you around to let you know that the song has been downloaded. You’ll punch in a code and the song is now yours. And then you’ll probably be queuing up other songs and then hopefully what you’ll do is download the next one because you had such a good time doing that one. And you could play it right there if you wanted to or you could save it to wherever you choose to save it to.

Paul Lewis:

When you say you can save it, where you can choose to save it to, does that mean you can put it on your portable music device?

Lance Ford:

Yep. Absolutely.

Paul Lewis:

Can you also burn CDs? Will it be, still have some digital rights management going on in the background?

Lance Ford:

Yeah, there is digital rights management so you cannot burn it. The idea is that, the reason that we have this relationship with the labels and maybe this will make it a little clearer for everyone is the fact that we are trying to monetize stolen music. You know, there are billions and billions of songs that are stolen every year in America alone; I think the number last year was twenty billion and the record industry has been devastated by that. And they really have no solution to that, so one of the reasons that we exist is because the idea is to be able to use advertisers who try to chase this young demographic who they desperately want to reach; they will advertise on this site and then we will share that revenue with the record labels. That is the solution to monetizing the previously stolen music off of sites like LimeWire and before that Kazaa and originally Napster.

So the advertiser actually is the user’s friend. They’re the ones providing the free music in a very literal sense, so it kind of creates a new and very open relationship between the consumer and the advertiser, which we think is a very modern approach to this advertising model. In the past an advertiser might have been an interruption, now he’s a friend. It’s a very different sort of paradigm shift in that regard.

Paul Lewis:

Yeah. It’s definitely a novel approach. Tell me a little bit about from either the user or the advertiser perspective, where do the advertisements play? Is that while they’re on the site? How does that work and what are the details sort of behind that?

Lance Ford:

It’s fairly straightforward actually, you know. We’re not asking anyone to watch an ad, listen to an ad, do anything to get their free music. What we’re asking them to do is stay on the site. It’s gonna be a deep music site, you know, be involved with the site while the song is downloading and while each page is turned or a new image is refreshed, or new information is delivered, we will be serving advertising on those web pages. And the more advertising we serve and the more pages that are turned, the more revenue we can split with our partners and labels. And this advertising obviously can be targeted because we’ll have some information on the user and obviously advertising that is relevant to them. I mean relevant and contextual advertising, in all the research we’ve done, these teenagers and twenty-somethings are absolutely fine with it. They’ve grown up with it, but they say to us, “Just make sure it’s relevant to us. You know, and make it cool and interesting.” So we’re gonna try and do that.

Paul Lewis:

So you will be able to provide advertisers and marketers with some of the data; they’ll be able to segment their audience using your tools to make sure their advertisements are reaching their target audience.

Lance Ford:

Correct. I think that’s very key. We’ll be able to and it’s very key and we’re working with a lot of advertisers who love the idea of that. And we’ll literally become this creative switching between us and them and their brand groups to come up with something that we think will be really interesting. I mean a great advertisement online can be viral of course, and that’s key, you know. I mean that would be fantastic. If those communications started to get sent around between these users, I mean that’s a great way to truly integrate a brand with a user, with a customer, so we’re very keen on that.

Paul Lewis:

So you mentioned that you’re working with some advertisers now. Is this a select group of advertisers for the launch that you mention is coming in December or January?

Lance Ford:

We are in the process of talking to a lot of different advertisers. I mean I don’t necessarily want to get into names if that’s alright Paul, only because we’re in early and advanced stages with a number of people at the moment, you know. No deals have been signed yet, but I’d be happy to tell you when they are. I can tell you this, that there’s an awful lot of interest from everything from bottled water and carbonated drinks and energy drinks and automotive, fashion, you know, jeans manufacturers and all what one might consider to be obvious consumer brands that would be reaching the teenager and the twenty-something.

Paul Lewis:

And when you talk to those consumer brands, what comes up in the conversation that is probably the most compelling or some of the most compelling reasons why they want to look at sponsoring downloadable music as opposed to other digital advertising initiatives that reach that target audience?

Lance Ford:

I think the most compelling part is the fact that, and maybe it’s the most obvious part, and I think good ideas are often obvious ideas, no one denies the simple fact that music is the most powerful common denominator across girls and guys, across all socioeconomic lines. So there’s nothing more powerful than music among this demographic. You know, advertisers completely understand that, that is something that will continue. No one doubts the tenacity of that enthusiasm for the subject. So now the thing is these are a, you know, attention deficit group, but they’re very smart and savvy, they’ve been raised by baby-boomer parents that taught ‘em well about brands. And the difference between branding and bullshit.

So the question is now, how do you focus them? Because if you can focus them, then you can really start to build a relationship with them. We have not had that much difficulty convincing advertisers that music allows them to do that in a very cool, open way, but they know they live in the subject and they know they love the subject and they know they share the subject and they know that to some degree it defines their personalities. So bringing a site that can give them what they want, not only music information, but give them what they want in free and legal downloads is a compelling proposition to a lot of advertisers. They’re very interested to talk to us. Many who have contacted us before we even had a chance to contact them.

Paul Lewis:

It’s interesting, I’ve done some research on the company and read the comments that are being posted in blogs and other sources online and they seem to have a little different perspective, the way that they describe it is it’s forced advertising, and the way that you’ve really presented it is a lot more compelling from my viewpoint as well.

Lance Ford:

Yep.

Paul Lewis:

I mean it’s really about engaging the brand and they’re on the site and just spending time being engaged in SpiralFrog, being engaged with the brands that are advertising there, being engaged with the music and the record labels who are represented there. It’s creating the right soup of all those things that is a good experience for the consumer, a good experience for the advertisers, and ultimately a good experience for SpiralFrog and for it’s record and music partners.

Lance Ford:

Yes, a lot of the music fans that we’ve spoken to, the potential users, they’re all about the artists as you probably know. I mean there might be some irony to the fact that they steal music, but I don’t think they ever think about taking the money out of the artist’s pocket. This is putting money back in their pocket. And they’re all about the artist and I think that’s a great place for us to be. We’re music fans and we want to see the industry thrive. We want to see more concerts and we want to see more new music being put out so we can listen to it. You know I mean it’s probably America’s biggest export isn’t it? Probably one of them.

Paul Lewis:

Oh absolutely.

Lance Ford:

And it’s been severely debilitated, you know, and there’s nothing much they can do about it. You know we feel that we’re playing a fairly important role, companies like ours, and maybe others will follow, will play a very important role in being able to reinvigorate with this new business model.

Paul Lewis:

And you mentioned that you had been working with a lot of the large labels and some independents. What about individual artists? Is that something that’s planned for down the road?

Lance Ford:

I think potentially it could be. It really depends a lot I suppose on whether they are tied to a label or not. There could be opportunities with emerging talent that’s unsigned, maybe we could help get them signed, or maybe there’s something else we could do with them. Maybe we create a revenue source for them independently. So we don’t really know. I think it’s an interesting subject, and a lot depends on the shape and nature of the music business moving forward, whether the contracts that the artists sign with them are different in the future or whether there’s more of an entrepreneurial approach to breaking a new artist in the future. I think it could be a part of all those options.

Paul Lewis:

Great. It sounds like a very interesting development to a problem that’s been out there for quite a while with music piracy and really bringing it together and creating a new opportunity for, like we said, both the advertisers and the music labels.

Lance Ford:

Yeah. I do think everyone benefits. You hear those terms a lot, but I think in this case it does appear to benefit all three constituencies if you like. Advertiser, user, and label.

Paul Lewis:

Well, as we conclude here, obviously a large segment of our audience are brands and agencies looking from the marketing side. Are you kind of filled up for your launch at this point? When should people be taking a look at SpiralFrog to plan some of their media budget?

Lance Ford:

I wouldn’t say, I’d hate to say we’re filled up. We’re aggressively talking to our friends in the ad community. I mean we know a lot of people from our experiences; between Robin and I we know a number of people and I think we have a decent reputation so that’s good. So we’re talking to a lot of people who we know; we’d be very interested to chat with anyone who would like to talk about the launch and moving forward. We’re putting plans together that take into account the launch and also all of ’07, depending on how aggressive an advertiser wants to be. You know, we have some estimated traffic numbers that are quite impressive; we believe that this thing will spike free and legal music as there’s no barriers to this, gotta make sure we have enough bandwidth.

Paul Lewis:

Yeah, absolutely.

Lance Ford:

To accommodate it, which we’re thinking here and there. So yeah, we’d love to chat with advertisers if they could contact us at our, through email or phone, we’d love to talk to anyone who would like to know more.

Paul Lewis:

Great. Well Lance, thanks for being on the show today, we really appreciate it. This has been very insightful.

Lance Ford:

Hey Paul, thanks man and I appreciate all the support from you and from your listeners and I hope everyone has a good experience when they try out SpiralFrog.

Paul Lewis:

Thanks. Well if you have a question for Internet Marketing Voodoo, call us toll-free at 1-866-206-4461 or visit us on the web at www.internetmarketingvoodoo.com. If you’d like more information on SpiralFrog, please visit SpiralFrog.com. Thanks again.

Announcer:

For more information on this week's topic, visit http://www.InternetMarketingVoodoo.com. This podcast has been brought to you by MindComet, The Relationship Agency.

[End of Audio]

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SpiralFrog, music downloads, video, piracy, DRM