INGROOVES UNIVERSAL
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But in an era where bands like indie duo Pomplamoose can sell 100,000 songs a year by releasing their albums straight to iTunes, without paying a cent to a middleman, why do thousands of artists flock to McDaniels? To simplify the process. Each retailer has its own formatting requirements, paperwork and sales reports; foreign countries all have different laws. With INgrooves, as with comparably sized rivals like the Orchard and IODA (which merged under Sony in the wake of INgrooves Fontana acquisition), one click of the button grants indie artists access to a system used by the worlds largest record labels. And many music retailers wont deal directly with musicians anyway.
ITunes isnt interested in forming relations with artists–there are just too many, explains Jack Conte of Pomplamoose, who says he was lucky to develop a special relationship with Apple (see box, p. 56). Obviously there are all kinds of management infrastructure problems with that kind of situation. Thats why they work with labels and distribution agencies like INgrooves.
Born in London to American parents and raised in and around New York City, McDaniels studied political science at Trinity College. He moved to San Francisco to take a job at insurer Marsh & McLennan. By age 27 he was in charge of development for the Western region, packaging and selling assets and credit risks to the likes of Enron and Global Crossing . I would go into the bathroom before meetings and just be like, What am I doing? This just doesnt feel right, he recalls.
An old hobby provided his escape route. McDaniels had tried his hand as a deejay during high school and wanted to do something in music. So he typed up a business plan for a new kind of music distributor to make sense of the digital era–linking content owners with retailers that sold into the newly Napster -less market. In 2002 he left his job; later that year an ex-director of human resources at Napster sold him a life insurance policy–and suggested he get in touch with a software engineer named David Kent.
I needed to build an enterprise software platform; I just didnt know how to do it, says McDaniels. So I met David. I told him what I wanted to do. He said a bunch of stuff I didnt understand, and I said, Great. Go build it.
Starting in 2003 with just an Excel spreadsheet and a thumb drive, Kent began laying the foundations of INgrooves. McDaniels leased a tiny room from a San Francisco architecture firm for $500 a month. After he couldnt make rent he forked over a small chunk of equity to his landlord. When Kent, a classically trained musician, asked for an electronic piano to use as a release during three-day coding binges, McDaniels redirected his entire marketing budget for three months to satisfy his CTO.