Two years ago, Craig Kelker got an iPod for Christmas. Although he’s a software programmer by trade, he had no interest in logging the man-hours required to transfer his mammoth collection of 350 CDs to MP3 files. “The ability to carry all of your music on you is pretty cool,” Kelker says. “I just didn’t have the time to make it happen.”

When Kelker started looking around for someone to transfer the music for him, the cheapest place he could find was charging $3 per CD. That was too much, he says, and in 2004 he founded Moondog Digital Inc., an Indianapolis based company that does the dirty work for a third of the cost.

If you’re leery of the price — 250 CDs will cost between $180 and $305 depending on the transfer rate — Kelker suggests you do a little math. He estimates you’d need to set aside 36 hours to convert 250 CDs.

“Forget that,” says Seattle resident David Carleton, who turned to Moondog Digital Inc. after he got tired of managing his collection of 356 CDs. Too many CDs made organizing, accessing and playing my music a hassle. Having them all digital will allow me to dump my CD player for a slim DVD player that plays MP3s, organize my music on my computer, record playlists as I see fit and load my iPod.”

Carleton’s tab was $384, which was a bargain to him. “Considering the amount of money I have invested in these CDs, the service is very valuable and the price extremely reasonable,” he says.

In its first year of business, Moondog Digital Inc. quadrupled in capacity and Kelker expects demand for his service to keep apace with booming iPod sales. By fourth quarter 2005, Apple Computer Inc. had sold 30 million of the gadgets and more than 600 million songs through iTunes to the mouth-watering digital music set. An estimated 7 million received them for Christmas — and a significant number will no doubt wonder how to get them loaded. “Our customers don’t want to know or they don’t have the time to create digital music files, and we’re happy to do it for them,” says Kelker, who can fit between 35 and 100 albums on each DVD.

December, January and February are by far the company’s busiest months because so many receive iPods for Christmas, and while the majority Moondog Digital Inc.’s business comes from both coasts, the middle the country is quickly catching on, too. “In Chicago, one out of every four people on the train is listening to an iPod,” says Kelker, who lived in the city until a year ago. iLounge, an independent reviewer of iPods and iPod accessories, recently gave Moondog Digital Inc. its “highly recommended” tag because of the company’s fair prices and no-frills approach. “When I designed the service, I asked, ‘What do people want?’” explains Kelker. “We’re not doing gratuitous packaging or products. We’re delivering a streamlined service and our customers appreciate that.”

There are currently only a handful of full-time companies in the United States competing with Moondog Digital Inc., and Kelker encourages consumers to research the hidden costs, such as shipping, insurance and quality of transfer level, before hiring anyone. “The first thing the company should ask is how you plan to listen to the converted files,” he says.

“If you’re going to listen to them on an iPod, a lower quality level (128 Kbps) will suffice because you’ll be using headphones. But if you’re a DJ and will be blasting the music on huge speakers, you need a higher quality level (320 Kbps) in order to produce the best sound quality possible.”

Bottom line: Moondog Digital Inc. doesn’t do anything you can’t do. The question is — do you want to? “I have effectively put all my CDs in usable storage that can easily jump to the next generation of technology,” Carleton says. “Remember when we went from cassettes to CDs? I must have thrown out several hundred cassettes and started over. That’s not the case with a service like Moondog.”