Starting a record label is risky business. But with the right mix of music, marketing, and manpower you can hear the sweet sound of success.
When C. Michael Brae entered the doors of Oakland’s Allen Temple Baptist Church in 1991, he didn’t expect to find an opportunity to own his own record label. But as chance would have it, that’s exactly what happened. “I played the organ on Sundays, but on this particular Sunday, a gospel artist named Grady Harris Jr. was playing,” remembers Brae. “We met after service and I noticed that he had left a cassette on top of the organ marked ‘Sounds of Soul Records’ so I asked him about it and he said that it was his label. He could see that I was intrigued so he invited me over to his apartment, but when I got there he said ‘this is my label.’ He just had a keyboard and all these 24 tracks. That’s it.”
Excited by the chance to exercise his business chops, Brae, a former investment banker, offered to partner with Harris. The two drew up a partnership agreement: Brae would get 50% of record sales and 25% of publishing. Using a small portion of his $20,000 in savings, Brae leased a 1,800-square-foot office in downtown Oakland, built a small recording studio inside, and through consignment began distributing the label’s sole artist–Grady Harris and Friends.
Delivering cassette tapes out of cardboard filing cabinets, Brae sold nearly 1,200 units in over 100 mom- and-pop stores throughout Oakland, San Francisco, San José, Sacramento, and Los Angeles. Still, Brae wanted more–more artists, more units, and more distribution. He realized quickly that he needed to go solo. “[Grady] was leaning more toward the production side and was focusing primarily on gospel music. I was leaning more toward the business, record label, and distribution side and wanted to focus on gospel, hip-hop, R&B, and everything else,” he says. Later that year, Brae created Hitman Records.
Today, atop the 41st floor of an upscale office building in San Francisco’s financial district, Hitman Records is home to nine artists, including Young Mike, Elijah Henry, and Damaris. Brae, 42, now works with distributors such as Kansas City’s Harvest Media Group and New York’s Sumthing Distribution to distribute music to more than 9,000 U.S. retail accounts. Tower Records, Virgin Mega, Best Buy, FYE, Sam Goody, Wal-Mart, and Target are just a few stores that stock the label’s tunes. Through its own distribution pipeline, Hitman Records also helps circulate the songs of over 30 other independent labels such as Roc Music, JazzyBoo Records, Tune Key Productions, and Jewel Thief Entertainment.
With nine employees, Brae’s company earned approximately $900,000 in revenues this year. He’s also working on a partnership with Audio Lunchbox, a Los Angeles-based digital download company that would put Hitman in charge of retail distribution for the company’s 5,000 labels. In addition, Brae is also crunching numbers for a new project with R&B’s Tony! Toni! Toné!
Brae is just one of many entrepreneurs reaping the benefits of