Converting CDs to Digital Format is Music to Entrepreneurs’ Ears

Jul. 29–TAMPA — Perhaps the biggest letdown to getting a brand new iPod or other music player is spending hours at night loading stacks of CDs into the gadget.

Now, a crop of inventive entrepreneurs have popped up to alleviate that tedious task and load your iPod with your entire music collection for a fee.

For between 50 cents and $2 a disc, these upstarts will pick up CDs, make the transfer and return the discs in handy binders via FedEx or UPS. Some will even give a free iPod in exchange for keeping CDs they can resell as used.

“My friends are shocked I got a free iPod. They want to touch it and make sure it’s real,” said Chuck Haile, of New York’s Brooklyn borough, who several months ago traded more than 650 CDs for a new iPod from a New York City company, iPodmeister.com. “I’ve probably turned on 20 to 30 of my friends to this.”

From a market that didn’t exist more than a year ago, some iPod loading companies have found enough demand to enlist dozens of freelance loaders in cities across the country, including Tampa.

Still a niche service, these upstarts hope to ride the massive wave of popularity for digital music players. Apple shipped more than 6.1 million iPods during the quarter ended June 25, up 616 percent from the same time last year. More than 22 million Americans now have iPods or other MP3 digital media players, according to the Pew Internet & American Life Project. The Yankee Group research firm has a higher estimate for iPod and other MP3 owners: 35.1 million.

Loading a single disc onto a computer can take five to 10 minutes, depending on a computer’s speed. With billions of discs now sitting on U.S. bookshelves and some audio fans holding thousands of discs in a collection, these start-ups are betting that a segment of consumers simply won’t sit long enough to load their own music.

“My initial reaction was, ‘Give me a break, how hopeless are you that you’d hire someone to load your iPod?,’ ” said Stephen Jacobs, a professor at the Rochester Institute of Technology who studies ways to make technology easier to use. “But if you’re a busy executive, music junkie or hassled mom with barely two spare minutes, and you really want to load your iPod and use it, why not?”

One company offering the service in Tampa is LoadPod.com, started in the Orlando area in May last year by Bill Palmer, a 28-year-old former elementary school teacher, as an offshoot of his main business running iPodGarage.com, a Web site that reviews new iPods and related gadgets.

LoadPod technicians will personally pick up CD collections and return them in a few days with the music loaded on iPods.

Prices start at $1.49 a disc for collections fewer than 100 discs and $1.19 for collections more than 500.

Palmer marketed LoadPod through Internet advertisements and soon Apple retail stores nationwide began sending customers his way.

Palmer now has more than 100 music loading technicians scattered across the country: six in New York, five in Los Angeles, three in Chicago and one in Tampa. The average contract is to load 200 CDs, though he’s seen contracts as big as 1,200 CDs.

When LoadPod started appearing in Apple Internet news chat rooms, job applicants flooded in, Palmer said. Most technicians are computer specialists or work-at-home technology consultants who already have several computers running at once and can burn CDs while working on other projects. (Technicians in Tampa declined to be interviewed because they didn’t want their full-time job employers knowing they loaded iPods as a side business.)

There’s something of a myth, Palmer said, that his technicians are only in the business to collect and copy music from customers. He prohibits that practice and mandates technicians delete music once the load is complete, or the company could run afoul of copyright laws.

Now just more than a year old, LoadPod is getting some competition.

Prices at IPodmeister.com vary, but the company recently lowered its prices to 70 cents a disc for most collections and 50 cents a disc for the largest collections. And it gives customers a free 20 gigabyte iPod loaded with their music in exchange for 300 CDs and a 60 gigabyte model for 600 CDs. The company then resells the discs as used.

A rival company in San Francisco called Awaken is taking a slightly different approach by focusing on classical music listeners.

Started in December, Awaken will send iPod owners a custom-designed FedEx package that holds 50 CDs stacked like pancakes outside their plastic jewel cases. At Awaken’s headquarters, technicians receive and clean the discs, then load music on iPods and return them again via FedEx.

Awaken prices range from $100 to convert a 100 disc collection to $285 for 300 discs.

“Many people are happy with average sound quality,” said Christopher Morace, founder of Awaken. “But classical music fans typically really want good sound quality, and they may have 10 different versions of the same symphony that need to be marked specially for that.”

Awaken is now processing about 90 loading projects a month, with CD collections ranging from 100 to a couple thousand, Morace said.

As a backup, the company copies a customer’s music on high-capacity DVDs that can often hold an entire music collection. To appeal to the environmentally minded, Awaken will also arrange to recycle empty jewel cases.

Awaken insures CDs during shipment through FedEx at $10 a disc.

When shipping to other loading services, most private package companies offer their own insurance if the package contents are declared.

Although the business model of loading iPods may seem simple, some companies have found executing it profitably may not be worth the hassle.

“We dabbled, but found that there’s not a very huge demand for this,” said Josh Loory, owner of The EditWorks, an Orlando-based company that primarily converts video from VHS tapes to DVDs. “We saw a write-up about this in MacWorld Magazine, and said “Hey, we can do that. We’ve got six Macs.”‘

Loory bought some radio and print advertisements, but found the profit was too small to justify the time involved. “We’re not turning people away if they walk in asking for it,” Loory said, “but even at $2 a disc, it’s a lot of work.”

—–

To see more of the Tampa Tribune — including its homes, jobs, cars and other classified listings — or to subscribe to the newspaper, go to http://www.tampatrib.com.

Copyright (c) 2005, Tampa Tribune, Fla.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

AAPL, FDX, UPS, RTRSY,