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Summary:

While online music sites like Napster are still trying to figure out how to make money, San Francisco-based digital music startup IODA has been creating a pretty good businesses by finding a focus: Indie bands. IODA (stands for Independent Online Distribution Alliance) helps small independent music […]

While online music sites like Napster are still trying to figure out how to make money, San Francisco-based digital music startup IODA has been creating a pretty good businesses by finding a focus: Indie bands. IODA (stands for Independent Online Distribution Alliance) helps small independent music labels distribute music digitally, has raised no VC funding to date, and has been able to grow organically. Today IODA said it will buy London-based digital music company Uploader, in a broader plan for international expansion.

I met with IODA founder/CEO Kevin Arnold last year and he’s a true music hipster — he founded the music festival Noise Pop and is the kind of guy that says he’s driven by his love of the Indie music community. He learned the music business during a stint at Listen.com, before RealNetworks bought it, where he built the Rhapsody music service. This week he’s in Berlin, attending Popkomm where the company announced the Uploader acquisition.

IODA’s premise is that 20% of global music industry sales come from independent music. Targeting the indie niche the company seems to been able to find some success, while some more mainstream music peers are struggling. Last year Arnold told me the company was a “2.5 million to 3 million dollar company,” so it’s likely grown considerably since then.

Uploader is IODA’s first big international push. Uploader was founded in 2005 by a few longtime European independent music veterans, like Martin Goldschmidt, the man behind European label Cooking Vinyl. Uploader will be IODA’s European arm and will likely be the first step in a major international expansion. While the companies didn’t release the details of the deal, I would say that the Uploader deal was valued no more than $20 million given the size of other digital music deals this year.

The fact that a three-year-old startup that has never taken VC money, is buying an international firm means that the company is likely doing pretty well. IODA has some 600,000 tracks from more than 2,700 independent labels around the globe, and now with Uploader’s 150 labels representing 50,000+ tracks, they’ll have a lot more. The company distributes independent music to sites like iTunes, Napster, Rhapsody, (check out the full list here.)

  1. Not to mention he shares a name with the lead character of the coolest show ever, The Wonder Years.

    I actually hadn’t heard of this company before and love indie music. Great story, I’ll be following their news as they grow.

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