7/07/2006 InRadio raising funds for digital service
by Mark Reilly, Minneapolis St. Paul Business Journal

InRadio Inc., a distributor of independent music, is raising capital as it prepares to launch a new digital service.

The Minneapolis company, launched by a former Utne magazine employee, has raised a little under half of an ongoing $1 million funding effort, according to officials and securities filings.

The funding comes as InRadio plans to start Imp, a digital-music distribution service that partners with magazines and other media to showcase local musicians. Imp would operate in five U.S. cities. InRadio would collect revenue via advertising, subscriptions and licenses for its branded software that plays digital music on PCs.

It's a significant expansion for InRadio, which until recently focused on distributing compilation CDs of independent bands and "sound artists."

CEO Dan Carroll launched the company in 2001. He had worked at Utne in the 1990s. "I wanted to create something that featured the best of independent music, the way Utne covered the indie press."

The company drew an investment stake from Lens Publishing, the owner of Utne, until Lens sold the magazine to Ogden Publications Inc. of Topeka, Kan., this spring. Lens allowed InRadio to use office space and its own fulfillment agency. "That let us start with 250,000 subscribers instead of zero," Carroll said.

Imp moves InRadio into the transmission of music via the Internet. The company deals in MP3 files rather than copy-protected audio files, such as those used by Apple Computer's iTunes. That gives it some flexibility in forming partnerships with artists and media outlets, Carroll said.

He thinks InRadio has an early lead in the market, as iTunes and similar services are focused more on mainstream music.

mreilly@bizjournals.com | (612) 288-2110