Apple iTunes“SpiralFrog.com, a service scheduled to open today, will let Web surfers download songs by U2, Timbaland, Amy Winehouse and other Universal Music Group artists free,” Joseph Menn reports for The Los Angeles Times. “The catch: Consumers have to wait 90 seconds for each track to download, and they must answer questions each month about their buying habits. In addition, the songs can’t be played on iPods or burned onto CDs as they can with 99-cent downloads from the dominant online music store, Apple Inc.’s iTunes.”

“The revenue from advertisers, which so far include Chevrolet and the U.S. Army, is to be split, with the labels and music publishers getting more than half of the total,” Menn reports. “The industry would prefer subscription services, but none of them has taken off despite efforts by major companies such as Yahoo Inc. and RealNetworks Inc. So the record labels are ranging further in pursuit of permanent downloads on terms that aren’t dictated by Apple Chief Executive Steve Jobs.”

MacDailyNews Take: Since nearly everything that Steve Jobs touches turns to gold, perhaps the music cartels would do well to take Jobs’ dictation. It would certainly be preferable to dreaming about unending subscriptions to which nobody in their right mind wants to shackle themselves or participating in “FailuresForSure” like this SpiralFrog debacle.

Menn continues, “Despite a deal with Universal, the world’s largest record label, the New York company’s survival is far from assured… It has burned through more than $10 million in funding and shed a number of its top managers trying to get off the ground.”

“Although the company stresses that it has sold Universal Music Group on the concept of revenue-sharing, the filing shows that SpiralFrog had to pay the record company $2 million as an advance against that revenue,” Menn reports. “Although Universal and the other labels declined to discuss SpiralFrog on the record, executives at two labels said they had serious doubts about the company’s prospects.”

“Among the drawbacks to SpiralFrog are the 90-second wait time that SpiralFrog founder and Chairman Joe Mohen said music-rights owners demanded; the absence thus far of music from the other three major record labels; required monthly visits to the site to keep the music playable; and mandatory survey questions on such topics as how often users attend concerts and whether they are more inclined to buy a band’s music if they agree with the group’s political statements,” Menn reports.

Menn reports, “Probably the biggest negatives are that the tracks can’t be burned onto blank CDs, and they can be transferred only to Windows-compatible mobile players and phones. That leaves out Apple’s market-leading iPod.”

Full article here.

Joe Mandese reports for MediaPost that Joe Mohen, chairman and founder of SpiralFrog, said the thing “is aimed at ‘people who have more time and less money.’ ‘And they’re used to getting it for free,'” said SpiralFrog’s new vice president of marketing and sales, George Hayes, former Universal McCann honcho.

Full article here.

[Thanks to MacDailyNews Reader “macdan2004” for the heads up.]

MacDailyNews Take: Just what advertisers love, people with no money who want things for free. Who wrote SpiralFrog’s business plan, a group of preschoolers at snack time? No wonder they’re having trouble getting the thing off the ground; it doesn’t even fly on paper.