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Spin City

Now that these entrepreneurs have put a modern twist on the music industry, independent labels can stay in the game.

This story appears in the December 2007 issue of Entrepreneur. Subscribe »

At 18, Robb McDaniels worked as a disc jockey, spinning music in London nightclubs. Now 33, he's putting a spin on the entire music industry with the help of Adam Hiles, 34, and Matthew Burns, 37. Since 2002, the founders of INgrooves, a digital media distribution and publishing company in San Francisco, have been bringing independent music labels up to speed by focusing on distribution through modern channels like online stores, video games and ringtones, and offering marketing, promotion and sync licensing services in the digital world.

INgrooves' first hire was Napster's former director of new technology, who developed a highly flexible proprietary platform that automates the distribution and administration of content. McDaniels was then able to focus on INgrooves' primary mission: to efficiently respond to changes in the marketplace while keeping artists' costs down and revenue streams up. "We're in the service business, and we approach it as such," says McDaniels, who projects $6 million in sales this year. "That's one of the things the traditional industry lost sight of."