Ad-Supported Music Service SpiralFrog’s Financials: Losses; Financing Needed; Plans

Ad-supported online music service SpiralFrog, one of 2006’s candidate’s for most-hyped new product, and still half-vaporware (it has launched a closed beta), has filed its detailed financial with SEC.

On the financial side, the company has already shelled millions to license materials from Universal Music Group, according insider reports. In the filing, the company warned that buy-in from other majors is hardly guaranteed. "In the event that we are unable to enter into agreements with most of the other major and independent record labels, it is unlikely that we will be able to attract and keep users to our site," the company stated. SpiralFrog did not mention heavy, upfront licensing costs frequently demanded by majors, though financial aspects remain daunting.

In the filing, the company disclosed losses of near $12 million over the two and one-half years, as well as significant costs ahead. "We anticipate that we will require up to approximately $18 million to fund our continued operations for the next twelve months," the group disclosed.

SEC Filing