Ask Hanson

Jeff Hanson, CEO of upstart independent Rock label Silent Majority Group, recently sat down with Cage Rattle to discuss the state of Rock music, its past, present, and future.

We felt a weekly column on Cage Rattle would be an ideal source of knowledge and education for any aspiring band, manager, or independent label entrepreneur.  Below is the first of what we hope to many Q&A sessions with Jeff.

Q - Do artists/labels even need to make full length CD’s with digital downloads/iTunes as the #2 retailer for music?

A - The answer is in the question, iTunes is number 2. Physical product still remains 80% - 90% of most record company sales and tangible products like CDs and t-shirts are staples that developing bands need to survive. But, digital downloads are simpler, faster, and most importantly much, much cheaper. Many consumers don’t know that retailers basically charge $2-$3 per CD just to rent rack space in a store, and can now be sent back at any time, with all the costs being placed on the distributor, making its way back to the artist. Digital distribution eliminates not only this fee, but the costs of manufacturing, packaging, shipping, etc. As the big box retailers continue to reduce shelf space available for music, in favor of bigger ticket items like TVs and Vacuum cleaners, the CD will go the way of vinyl and become a much more specialized product and music will probably find its way into big retailers via DVD’s and preloaded devices like phones and iPods only.

Q - Is Rock dead? Out sold 2 to 1 by Rap and Country - Why SMG?

A - Rock will never be dead because it has, does, and will reflect the emotional make up of mainstream kids. There will be ups, downs, and fads that represent trends of different segments of the population, but for rock to die, you’d have to prevent every aspiring musician from ever hearing and being influenced by, some of the greatest artists of all time, who happen to be rock artists. Every decade has spawned rock artists that influenced an entire generation, The Beatles, The Eagles, Queen, and U2, to name some of those that covered the 60’s, 70’s, 80’s, and 90’s. Who knows how history will treat Kid Rock, Metallica, Linkin Park, 3 Doors Down, Disturbed, Korn, Nickelback, etc, but I know that every kid has been touched by one of them. I don’t know that any other type of music can say that.

And as for SMG, I’ll bet that at least one of the artists that I helped bring to market like Creed, Sevendust, Tantric, Candlebox and Paramore will have touched just about every rock kid in the current generation and I’ve only been in this business for a little over ten years.

Q - In the year 2018 how will a record label operate and profit?

A - Labels, over the next few years, will have to become super-agents. They will shift their focus from actually doing the sales and distribution, to putting together the relationships, teams, and strategies that can help the artist’s brand ( not band )find new ways into people’s homes, like TIVO, Coke, Nike, etc. Itunes and Wal mart will digitally distribute the majority of music, eliminating the need for many “back room functions” that labels charge a premium for now. The profit model will change from 85%-15% in favor of the label, to 80%-20% in favor of the brand. The catch is that the 80% retained by the brand (band) will have to go to pay the new players in the game as mentioned above.

Q - What is your criteria for a band prior to signing them? What makes you take action?

A - Although I’m still a sucker for great young rock bands like Framing Hanley and Vayden, these days I’ve been utilizing my 50 / 50 model to entice bands that have a brand awareness in place, like Tantric and Candlebox. The reality is that there are numerous great bands out there that have the benefit of major labels having spent hundreds of thousands of dollars on them, but it’s not realistic for the majors to put money into a project that’s going to sell 100k records. However, it gives me a tremendous financial shortcut and I take care of the artist by giving them a much bigger piece of the pie. For me, one man’s junk is truly another man’s treasure

Q - What are the biggest mistakes you’ve made with SMG and how did you recover?

A - My biggest mistake was that it took my investors and I over a year and a million dollars to figure out the innermost nuances and how royally screwed the music business actually is. Ironically enough, I am recovering because I learned a lot in a short time and we only spent a year and a million dollars!

About Silent Majority Group

SMG’s roster includes Platinum recording artists Candlebox and Tantric, along with top emerging active, alternative, and mainstream rock acts to include: Framing Hanley, Course of Nature, Vayden, Fosterchild, Signum A.D, Woodale