Universal Music today announced SpiralFrog, a web-based community of music fans that will permit people to download and enjoy, free of charge, many music items in the Universal catalog. This is a great step forward for the music industry. Given a legitimate, high quality source of music at a price competitive with piracy - free - this has a real chance of attracting passionate and responsible fans.
So far, SpiralFrog is a Universal product, but in this announcement lies a great opportunity for Sony. Sony has both a rich music catalog as well as a media device business and Sony's addition to the SpiralFrog environment could result in an even more attractive solution. Additionally, enabling users to put their free music on Sony devices could help drive a dramatic resurgence in Sony's weak consumer electronics business.
Music catalogs grow much stronger as the catalog size grows - appealing to more users - and so two major music companies working together should present a solution that is more than twice as attractive as two independent solutions. Additionally, where SpiralFrog today lacks any portable devices, Sony could make this appealing for those who might otherwise consider an iPod.
This is, however, a time limited opportunity. By all accounts, Apple profits most from the sale of iPods, not the sale online music. If Apple develops a competing free offering and lures in other partners or builds a relationship with Universal enabling an advertising driven sales model for content on the iPod, then Sony could find themselves out in the cold.
For Sony's part, integrating a free, advertising driven content service with portable devices, especially the wi-fi equipped Mylo, could prove to be a transformation play in the growing connection between content, connectivity, and consumer electronics.
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