Mt. Hood Records is an unusual but sustainable business model for a record label. The company has been founded by Hillary MacQuilliams as an Oregon registered LLC. The business operates to promote several Portland based bands, all with the common element of improvisation.
Industry Analysis The retail record industry is dominated by a few large corporations. These corporations control over 87% of the CD sales in this country. 8% of the sales are controlled by Indie record labels, a less commercial version of the large corporations. The remaining 5% is a hodge podge of record labels. Most labels take the shot gun approach to sales. They sign up lots of different bands and hope a few make it big. On the bands that are a commercial success, there are huge windfalls of profit to be made by the record corporations. The Indie labels are similar, however, they are a bit more selective and do not always go for the most commercially viable bands.
Products and Services Mt. Hood Records is a Portland based record label for a select group of Portland based bands. Mt. Hood Records has adopted the business philosophy that for long term sustainable growth it will be more successful for the label to sign up just a few bands and promote them equally than to sign up a bunch and hope one is a commercial success, enough to float the rest of the bands. This approach is quite appealing to a few bands. It provides the bands with the intimate and specialized focus of the label. The bands recognizes that fact that this label will be working hard to promote just a few bands, and that they will not be lost in the shuffle.
The Business Model In order for this record label to succeed, a lot of sweat equity will be required will little to no revenue stream for the first year. For many businesses this is quite difficult to swallow. For Mt. Hood Records it helps that these realistic expectations have been established up front, and will not be an unwelcome future surprise. Additionally, the investors (friends and family) are aware of these parameters and have given their blessing. It will take a lot of work to pull this off, but with reasonable expectation up front and the right management to execute on the business model, it will happen.
Management Mt. Hood Records has been founded and will be run by Hillary MacQuilliams. Hillary is a veteran of the music industry. Immediately after college Hillary went on tour with her own band 180 South. To support this month-long regional tour, Hillary and the band started their own record label to release a studio CD for themselves. Hillary recognizes that this experience was not an earnest attempt to make a record label work. It was more of a novelty to have started a label and released their own CD.
After the tour the band broke up and Hillary enrolled into law school. At graduation, law jobs were extremely difficult to come by. After no luck in her job search, Hillary began to consider something in the music industry because of her passion for music. She began doing research and developed a business model that could, in the long term, be sustainable by developing a local, exclusive record label. This was the beginning of Mt. Hood Records.
To become the premier local music label, based on CD sales, within three years.
Sign at least five groups within the first three years.
Reach profitability within three years.
Mt. Hood Records exists as a locally based record label whose mission is to promote local music groups, increasing live appearances and record sales. Mt. Hood Records has been established to promote its bands and at the same time make a fair profit.
1.3 Keys to Success
Choose promising bands to promote.
Do not sign up too many bands, otherwise the effectiveness of promotion will be diluted.