January 22, 2007 4:12 PM PST
SpiralFrog loses CEO, other executives
- Related Stories
SpiralFrog inks music deal with UniversalAugust 29, 2006
Robin Kent, the former CEO of advertising agency Universal McCann Worldwide, was ousted the day after Christmas at the conclusion of a company board meeting, according to three former SpiralFrog executives who requested anonymity.
What ensued was a widening of the fracture in the company's leadership. Three directors with strong music-industry ties resigned almost immediately after Kent's departure, sources said. In the days following, more directors walked out as well at least six members of SpiralFrog's senior executive team, including the chief marketing, strategy and operating officers, sources said.
Reached by telephone at his home Monday night, Kent declined to comment.
A woman answering the phone number for SpiralFrog's New York headquarters on Monday said the company was no longer at that location and could not be reached by phone. She said the best way to reach SpiralFrog employees was via e-mail. Requests for interviews with several people still listed as employees on SpiralFrog's site were not returned.
The executive shuffle at SpiralFrog is a sudden change of fate for a company that generated a lot of attention last summer by announcing that songs at the online music store would be given away for free. While most music download sites make money by selling subscriptions or individual songs, SpiralFrog planned to sell advertisements that would be shown to users as they downloaded songs.
The privately held SpiralFrog wasn't the first to try this business model, but what was different about the start-up was that it could boast a powerhouse partner. The company said that when the music store launched--rollout was expected by the end of last year--customers would find songs from Universal Music Group, a label featuring artists such as Gwen Stefani and Eminem.
But December came and went without any such launch. Also missing were any follow-up announcements saying other top labels had signed on.
"I haven't seen anybody else sign on other than Universal," said Mike McGuire, an analyst with research firm Gartner. "One of the things you must have when you're challenging Apple or the other sites is that you've got to have all the content."
SpiralFrog, funded by two London-based banks, is going ahead with plans to launch the site sometime next month, according to the sources. Joe Mohen, SpiralFrog's founder, is now steering operations and has already replaced some of those executives who have left.
Steve Mayall, a music consultant and the first to write about Kent's departure, said he fears SpiralFrog's troubles will hurt other companies in the music sector relying on ad-supported business models. He said that despite SpiralFrog's notoriety, the company may not have had the strongest business model.
"(SpiralFrog's executive turmoil) suggests there are no legs to the idea of ad-supported music," said Mayall, who operates the blog Music Ally. "If the company that shouts the loudest can't make a go of it, then some might suspect the rest of the companies involved can't make a go of it either. That's not true. I believe there is great potential here."
Mayall said that Kent was supposed to appear with him at the MidemNet conference on Sunday, but Mayall was informed on Saturday that Kent was no longer with SpiralFrog.
2 commentsJoin the conversation! Add your comment