| Great question. I have a couple of experiences. In the 90's I worked for a studio in LA. Not the Record Plant or an other "Big Time=Big Ego" studio but one that was very busy and always booked. Between major corporate clients and record labels deciding when they would pay and having to pay employee's salary, lease payments, rent, etc. The two owners regularly had to forgo or delay their own paychecks. I would always blow my mind that some of the biggest ad agency's in the world and the big record labels would take upwards of 6 months to a year to pay. The studio decided to start charging interest on bills that were over three months out. One big agency told our accountant that "It is not our policy to pay interest or late fees" How can you run a business when your clients dictated how they are going to pay? These were very high paying commercial gigs and the studio didn't wan't to loose that revenue, but between that and the record work we did it really put the owners in a rough position.
Fast forward 10 years and I now have my own place. 95% of my work is mixing so my overhead is low compared to a 3000-7000 square foot building but I still have to pay all the usual stuff to stay in business. When it gets slow I go without a paycheck. I would bet that most owners are in the same boat.
I know a bunch of different studio owners who also make royalties because they are either also players or composers, so this helps them when things get tough. Do I make more money when things are busy than I did as just a freelance engineer? Yes by a large margin, and I usually take a large chunk of that a put it back into the company so that I have the tools to remain competetive and so that I can give my clients something they can't get at another studio. It is expensive, and I would love to be driving a new BMW but at least I am working doing what I love and what I am good at. ( so my clients tell me anyway)
Michael Greene |