The concept seems simple enough: users download as many songs as they want for free, but must return to the site and watch more ads if they want to keep the music playing. Like subscription services offered by Napster and Rhapsody, digital rights management technology controls the number of times users can listen to songs. Stop watching ads and the songs cease playing.

It doesn’t look as if there were enough people watching ads at SpiralFrog to offset the amount of money the service paid Universal Music Group and EMI; an amount often reported to be over $1 million to each label.  Furthermore, the service was never able to complete deals with Sony and Warner Music Group, thus leaving out two of the four major labels.

Add that to SpiralFrog’s ever-growing debt – reported to be $34 million, according to CNET – and it becomes a little easier to understand why the service ceased functioning on March 19.

When ad-supported music services began popping up two years ago, it was thought the revenue from advertising would supplant revenues lost to illicit file-sharing. However, there are more factors in play than just exchanging 30 seconds of your time in return for listening to your favorite tune.

Control, for instance. While many music fans don’t really think about it, the amount of control a person has over music often defines whether the person actually owns the music or is just listening to a preview.

That’s how radio works. Chances are you’ve been introduced to more than a few personal favorite songs through radio airplay. However, as a listener, you neither control when the songs are played, nor how often the tunes are aired. You want control? Buy the CD.

But subscription services and ad-supported “free” music sites operate on the pay-as-you-go plan where you get all the control you want, including how many times you can listen to a tune, in exchange for a monthly fee at subscription sites, or watching more ads at free music sites.

Either way, you’re not in complete control because the sites can shut off the music. Of course, that goes without saying if you miss a monthly payment or fail to keep up on your advertising viewing, but the length of time the music continues to play is also dependent on companies staying in business, and/or supporting the DRM.

For example, Microsoft accrued lots of bad press last year when it said it would no longer operate the DRM servers that allow songs purchased from MSN Music to continue playing. That is, until mounting bad publicity caused the company to rethink that decision.

In SpiralFrog’s case, users will only be able to play songs obtained from the service for the next 60 days.

But many record company executives are questioning whether ad-driven free sites like SpiralFrog are actually competing with music sales. When radio was the only source of ad-driven free music, radio stations were seen as promotional tools for the music industry. However, if someone can hear “Freebird” as many times as he or she wants, why buy the CD?

“There’s nothing left to promote … this way,” says a high-level music exec, according to CNET. “At what point do they stop promoting and start competing.”

To read the CNET article, click here.