© rainforest_harley

The ad-supported music service spiralfrog shut down this week, quietly and without warning...

"A source close to the company told CNET News that SpiralFrog has ceased operations and assets have been surrendered to creditors," writes CNET's Greg Sandoval. "To keep operations going last year, the company issued secured notes in order to borrow at least $9 million from several hedge funds and others."

"The New York-based company launched in 2006, and a year ago claimed to be the third-largest legal music download site in the U.S., behind iTunes and Rhapsody," writes DMW's Mark Hefflinger. "SpiralFrog downloads came locked with digital rights management (DRM) software, however, at a time when most services are transitioning to offering DRM-free MP3s. With only two majors signed on, its catalog also paled in comparison to other music services."

"SpiralFrog worked by providing music downloads for free to the public while bringing in revenue through ads," writes SlashGear's Brenda Stokes. "And while the drop in advertising surely took its toll, the DRM-protected music itself was likely a problem, as it could only be played on the computer with which you downloaded the files."

"Relatedly, another site that provided ad-supported free legal downloads that targeted students on college campuses, Ruckus, closed its doors last month," notes Idolator's Michaela Drapes.

"The demise of SpiralFrog doesn't mean ad-supported music doesn't work," contends Pollstar's Jay Smith. "It's still a matter of delivering to customers what they expect from any music site, such as gigantic music inventories coupled with a no-DRM policy and presented in a hassle-free turnkey environment. Otherwise, what's the point?"

More here from the Guardian ... more here from MediaPost ... more here from TechRadar ... more here from Techdirt ... more here from Digital Journal ... more here from Music Ally ... more here from Billboard ... and more here from Ars Technica.