Mt. Hood Records is an unusual, but viable business model for a record company. Hillary MacQuilliams founded the company as an Oregon LLC. The business promotes several Portland bands and all share a common element of improvisation.
Industry Analysis
A few large corporations are the dominant players in the retail record market. These corporations account for 87% in total CD sales. Indie labels account for 8% of CD sales. They are a less commercialized version of large corporations. The remaining 5 percent is controlled by a mixture of record label companies. Most labels follow a shotgun approach for sales. They sign up many different bands, hoping that one of them is successful. Record companies are able to make huge profits by signing up bands that are commercially successful. Indie labels work in a similar way, but are more selective and are not always open to commercially viable bands.
Products and Services
Mt. Hood Records is an independent record label based in Portland that caters to a select few Portland-based bands. Mt. Hood Records was founded on the belief that it will be more effective for long-term sustainable growth if the label only signs up a handful bands and promotes them equally than signing up a large number and hoping one of them is a commercial success. This approach is appealing to only a few bands. This allows the band to have a more personal and focused label. Bands are aware that the label will only promote a handful of bands and they won’t be forgotten in the shuffle.
The Model for Business
This record label will need a lot of hard work and little revenue for the first year to be successful. This can be quite hard for many businesses to accept. Mt. Hood Records has made it a point to set realistic expectations upfront and not have future surprises. Additionally, the investors (friends and family) are aware of these parameters and have given their blessing. This will require a lot of effort, but it is possible with reasonable expectations and the right management to execute the business model.
Management
Mt. Hood Records has been founded and will be run by Hillary MacQuilliams. Hillary is a veteran in the music industry. Hillary started her college career with 180 South, and went on tour immediately after. Hillary and her band formed their own record company to self-release a studio CD. Hillary knows that this was not an attempt to make a record company work. It was more of a novelty to have started a label and released their own CD.
Hillary enrolled in law school after the tour. It was very difficult to find law job opportunities after graduation. Hillary became frustrated with the lack of success in her job searches and decided to try her luck in the music business because of her passion. After doing extensive research, she developed a business plan that would be long-lasting by creating a local record label. Mt. Hood Records.
1.1 Objectives
- Within three years to become the leading local music label.
- At least five groups must be signed within the first three-years.
- Within three years, achieve profitability
1.2 Mission
Mt. Hood Records is a locally-based record label. Its mission is to promote local musicians, increase live appearances, record sales, and create awareness for them. Mt. Hood Records was established to promote the bands it represents and make a fair profit.
1.3 Keys to Success
- Promote promising bands.
- You should not sign up to too many bands.
- Have fun while working hard
