How to make money, or how to make MORE money - with a "high end" studio

[Jules]

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[thethrillfactor]

You gotta be kidding right?

Make money in the high end studio?

How about sell it off to another fool?

Seriously though the only way for the High End studios to really make money and survive in the future is to begin to disenfranchise themselves from the smaller "ma and pa" places and make a true experience to make music again.

This may mean offering services that the smaller places can't.

Which for that to happen may mean banding together with the music,tv,film market and manufacturers to make things exclusively for them only.

Of course this may go into the area of collusion and people will scream foul, but it maybe the only chance to bring up the standards again.

[crispy]

Ha, Ha!

My brother came to stay with me over Xmas. He works for one of the Big 4 in London.

Apparently...they are in the process of aquiring a new building to move all of their different operations into AND....

...they're planning on building TWO studios into the complex!!!!

It's not to save money. Rather some (not so) bright spark realised that they could remove recording costs from the company's balance sheet & 'hide' it within operating costs therby fooling everyone into thinking that they've saved loads of money.

It also transpires they've already done this with staff costs by firing staff & replacing them with expensive agency temps which don't show up on the payroll headcount!!!

Nuts, plain nuts...

Crispy

[Jules]

WARNING!

Keep this ON topic!

How to make money, or how to make MORE money - with a "high end" studio

This aint no 'specualtion zone' for big studio 'haters'.

Keep on topic - or be suspended from this forum!

tutt

[crispy]

ooops! Sowwy!

[Dave Martin]

Well, that's a part of high end studios, Jules - actually any large business. Creative accounting has allowed more than one high end studio to stay open when it's not making money. Of course, it also allows bankrupcy auctions when these accounting practices come to light...

And to try and keep this post on topic, How many of you have found that depreciating gear over a period of years ends up being better than writing it off in the year of purchase (as US tax law allows).

[Jose Mrochek]

The only way for a high end studio to make money (in my opinion) is to have "high end people" from musicians, to producers, to engineers as part of their staff. Make some sort of contract with these people that doesn't allow them to freelance. Like in sports where you sign to this certain team for a season etc... I'm sure that the majority of clients don't care much about the studio, but at who is running the console. I'm sure this has worked in the past.. and I think it's more up to the engineers who demand a certain level of equipment to work in, rather than the "i'll will work anywhere, just pay me" type of approach. I'm sure will probably not happen, but I think is the only way to get high end places profitable again.

[Kestral]

POSTER SUSPENDED FOR COMMENTS DELETED

Jules
Site Admin

[thethrillfactor]

Originally posted by Jose Mrochek
The only way for a high end studio to make money (in my opinion) is to have "high end people" from musicians, to producers, to engineers as part of their staff. Make some sort of contract with these people that doesn't allow them to freelance. Like in sports where you sign to this certain team for a season etc... I'm sure that the majority of clients don't care much about the studio, but at who is running the console. I'm sure this has worked in the past.. and I think it's more up to the engineers who demand a certain level of equipment to work in, rather than the "i'll will work anywhere, just pay me" type of approach. I'm sure will probably not happen, but I think is the only way to get high end places profitable again.

The major studios already contract out work to frequent mix engineers(Skip Saylor and Soundtracks here in NYC).

But to restrict someone from freelancing is what started the whole freelancing business in the first place.

The studios were collecting all the money and credit on records in which the rewards were deserved 10 fold for the engineer.

On a sports team front, is a studio going to provide a contract to an engineer that will pay up to a million dollars guaranteed in which the top mixing engineer can get on his own?

And clients who know music and the business do care where there music is made.

Its the one saving grace the High-End studios still have.

[Bob Olhsson]

Location, location, location combined with an extraordinary staff and services combined with sufficient facilities for everybody involved to operate their various businesses as they record.

It really IS the luxury hotel business!

[thethrillfactor]

Originally posted by Dave Martin
And to try and keep this post on topic, How many of you have found that depreciating gear over a period of years ends up being better than writing it off in the year of purchase (as US tax law allows).

Dave,

Me and another studio owner were having this same discussion.

If we were in the late 80's to early 90's i would say the first.

But nowadays its hard to go around it and not do the second.

The problem in depreciation is the gear that's based on digital technology or trying to argue the point for a computer as a piece of gear and not office equipment(which is how the goverment sees it).

[thethrillfactor]

Originally posted by Bob Olhsson
Location, location, location combined with an extraordinary staff and services combined with sufficient facilities for everybody involved to operate their various businesses as they record.

It really IS the luxury hotel business!

Bob,

In today's economy where would the ideal location be?

Here in NYC(especially Manhattan) where the average price for a 1 bedroom apartment is $1500 a month, real estate is at a premium.

Almost every studio i know both Hi-End and in the middle is in jeopardy if they are under a lease.

To buy the land here in Manhattan unless you are Trump is unrealistic.

In the old days you could force a landlord into a new lease by explaining to him the high costs in the demolition of a studio.

Now they don't care.

[Jose Mrochek]

Originally posted by thethrillfactor


On a sports team front, is a studio going to provide a contract to an engineer that will pay up to a million dollars guaranteed in which the top mixing engineer can get on his own?

probably not.. I was just saying, that if certain facilities had engineers you would not be able to find anywhere else.. then that would drive people to those high end places.For example If I wanted Jules to produce my record, and he is ONLY available at the hit factory, then I would go the extra mile and book hit factory just because he was there. I know you got my point.. just wanted to get the point across that if I was in the position to afford a high end place, I would book it because I know I could not find better engineers no where else.

[bjornson]

Heres my recipe. No platinum records, no Grammys, just a solid business model that feeds the two owners, four employees and their families
1)Create a vision. Put integrity and fairness first
2)Position yourself at the top of your market
3)Learn what ROI means and insist that new capital investments make $ense
4)Insist on producing a better product with better service than your competitors
5)Build a staff of musicians (a "family") that have the same goals
6)Search out and exploit new revenue streams constantly
7)Review revenue vs. costs every week
8)Calculate breakeven point monthly down to the dollar
9)Identify reccuring problems that prevent hours from being billable
10)Follow up with every client and ask for (and react to) constructive criticism
11)As success slowly comes, live within your means and most importantly.......
12)******don't do dope*******

[pan60]

******don't do dope*******

[Jose Mrochek]

Originally posted by bjornson

5)Build a staff of musicians (a "family") that have the same goals

12)******don't do dope*******

yeah, I think you nailed it with these two

I had a teacher that used to say "a studio is a place where you put magical moments into tape" not recordings, or something like that. (not sure). I think it's more inpiring to work in a place where you feel like family. I bet some high end places lost the family vibe which caused them to loose business to. Back to Jules question, giving the family vibe to high end studios, will give them better business.

[thethrillfactor]

Originally posted by bjornson
Heres my recipe. No platinum records, no Grammys, just a solid business model that feeds the two owners, four employees and their families
1)Create a vision. Put integrity and fairness first
2)Position yourself at the top of your market
3)Learn what ROI means and insist that new capital investments make $ense
4)Insist on producing a better product with better service than your competitors
5)Build a staff of musicians (a "family") that have the same goals
6)Search out and exploit new revenue streams constantly
7)Review revenue vs. costs every week
8)Calculate breakeven point monthly down to the dollar
9)Identify reccuring problems that prevent hours from being billable
10)Follow up with every client and ask for (and react to) constructive criticism
11)As success slowly comes, live within your means and most importantly.......
12)******don't do dope*******

While the goals are noble, these have all been tried.

Right now there are just no more revenue streams to explore.

That is the main problem.

For years the hi end studios in order to survive started to diversify.

Which in turn watered down the end product to the buyer because the focus was no longer making great music but survival.

They adopted the all in one stop shop for making records.

But now the smaller studios are starting to eat those streams because they are starting to starve.

The so called business of music is at the cross roads.

[The Byre]

Well, I own a reasonable mid-sized studio ( www.the-byre.com ) and I can honestly say that most studios below a certain level make the classical mistake of being under-invested.

[Bob Olhsson]

Originally posted by thethrillfactor
Bob,

In today's economy where would the ideal location be?

Probably not New York (or LA) for very much longer! The reasons to record in New York have always been the musicians and convenience to the overall theatrical scene. Each top of the line studio going away reduces a location's desirability as a place to record because it's really about the community of people available. Real estate prices need to come down or else everybody needs to move. It's a very facts-of-life situation.

Originally posted by thethrillfactor
For years the hi end studios in order to survive started to diversify...
...
The so called business of music is at the cross roads.

When I began in the mid '60s the bread and butter of all studios and musicians was advertising and not records. The Record Plant was the first label-work oriented independent studio I ever heard of. Wally Heider followed on the west coast and many studios emulated both operations during the '70s and '80s. I think a very few "sound hotels" will probably survive but they will more likely have resort locations than urban ones.

We are indeed at a crossroads but the handwriting has been on the wall for 20 years when MIDI sequencing began to replace recorded performances especially in advertising, our former bread and butter.

Myself, I see the future as being in extraordinary musical performance because that will be something new to many younger people who view music as being mostly a bunch of hype. This WILL require studios rather than bedrooms. The question is "where will this new generation of performers be located?" The best answer I could see is the Nashville talent pool which is why we moved here 4 years ago.

[bjornson]

Originally posted by thethrillfactor
While the goals are noble, these have all been tried.

Right now there are just no more revenue streams to explore.

Gotta disagree...
Heres a short list of new revenue streams that will account for more than 20% of our gross income in 2005.
1) Took over all the creative for a 1/2 million sq. foot convention center. All the sound, lighting, projection and marketing piece development. Comes with built in clients one after the other.
Clients with MONEY!!! Looks to be about 150K this year alone.
2) Sound design for regional theatre. We did 8 shows for 3 different companies last year. Writing music,designing and hanging rigs etc.
Phones ringing off the hook already for next season.
3) Educational programs. We do a traveling studio thing in schools recording their ensembles. Did the first few for free then took out a $50.00 ad in the music educators sourcebook....
Blam!!! keeps a guy busy full time now.
4) Expanded remote services. Promoters know that we can provide a quality product for any touring artists that travel through. Our name is right on the services page of contracts for every large gig that happens in the city. Just by developing relationships with the right people and running our business with integrity.
5) Film work. We have a "Pittsburgh film office" that is the hub for all major motion picture work that happens here. From boom op to sound stage playback to ADR we get a piece of that action too.
6) Conversion of an old porn theatre back to a live performance venue. Consulting on the buildout, providing the ops, all with OPM.
We've done some great records this year too, but won't kid myself, this is Pittsburgh... I'm not going to run into Maria Carey at the local 7 eleven. For us its all about becoming a part of a larger creative community.

[drundall]

Originally posted by Bob Olhsson


Myself, I see the future as being in extraordinary musical performance because that will be something new to many younger people who view music as being mostly a bunch of hype.

This is an epic statement and something I've been pondering for the last couple of years.

[David Herbert]

Great topic, considering a possible expansion of my facility.
I am gathering that being in a secondary city, not NY or LA, is perhaps a better bet. Of course home studios are eating a lot of business out of the bottom everywhere...
Seems like Bjornsen is doing something right- look at the photo of Roy Thomas Baker in his studio. David

[Gideon]

Originally posted by thethrillfactor

Here in NYC(especially Manhattan) where the average price for a 1 bedroom apartment is $1500 a month, real estate is at a premium.

I think $1,500.00 is actually the average rent for a studio (0 bedroom) apartment (unless you factor in low-income housing).

I am convinced that the only way for a high-end recording studio to succeed (or maybe just survive) in Manhattan is for it to own its property and have enough extra rooms to generate a revenue stream from rent on unused space.

But right now the costs are simply prohibitive unless you win the lottery or a few of us pool our resources.

[bjornson]

Real estate prices are but one reason I decided to plant my seed in a 2nd (or 3rd!) tier market. Owning 6500 sq. feet in NYC wasn't gonna happen in my wildest dreams. We're in this for the long hall and I didn't want to be at the mercy of some cash crazed landlord. Owning the property was just another piece of the puzzle. I love working in NYC but at 40 I wanted my kids to grow up with a big ol' 12 acre yard/woods and have access to great museums/symphony/hospitals/schools etc. It's about achieving balance. The other is competition. Our card rate is $85.00/hr $65.00 for prepaid 10 hr blocks. And unless you come with really good game, we don't negotiate. We've priced ourselves 30% above the rest of the market on purpose. It eliminates the riff raff from the jump. We actually encourage low ballers to try other local facilities.

[bjornson]

I can't believe some of the oldtimers aren't chiming in with nuggets of wisdom.....
I was hoping for some real insights and ideas

[fasttraxx]

Originally posted by bjornson
Gotta disagree...
Heres a short list of new revenue streams that will account for more than 20% of our gross income in 2005.
1) Took over all the creative for a 1/2 million sq. foot convention center. All the sound, lighting, projection and marketing piece development. Comes with built in clients one after the other.
Clients with MONEY!!! Looks to be about 150K this year alone.
2) Sound design for regional theatre. We did 8 shows for 3 different companies last year. Writing music,designing and hanging rigs etc.
Phones ringing off the hook already for next season.
3) Educational programs. We do a traveling studio thing in schools recording their ensembles. Did the first few for free then took out a $50.00 ad in the music educators sourcebook....
Blam!!! keeps a guy busy full time now.
4) Expanded remote services. Promoters know that we can provide a quality product for any touring artists that travel through. Our name is right on the services page of contracts for every large gig that happens in the city. Just by developing relationships with the right people and running our business with integrity.
5) Film work. We have a "Pittsburgh film office" that is the hub for all major motion picture work that happens here. From boom op to sound stage playback to ADR we get a piece of that action too.
6) Conversion of an old porn theatre back to a live performance venue. Consulting on the buildout, providing the ops, all with OPM.
We've done some great records this year too, but won't kid myself, this is Pittsburgh... I'm not going to run into Maria Carey at the local 7 eleven. For us its all about becoming a part of a larger creative community.

How did you get into so many different types of services. Did you just dive in and try something new by networking into it? Could you give me some inside? I agree that you have to be creative. I read another message from you about being 40 and have children and want to give them a better life. I also am 40 and have a wife and a couple of children, so I can really realate to that. I also belive in your integrety. That's were it is for me. I must confess, here in Calif. I find myself constantly trying to keep ahead and try different ways to creat revenue. Whatever it takes to feed the family is my moto. So if you have some insight on an easier way to do that, I'm all ears.

[jon]

Keep on doing things well and over the long term invest the returns into real estate.

Another good idea that some studios here are doing is leasing neighboring industrial spaces, transforming them into acoustically decent empty studios with soffit-mounted mains, and then subleasing the spaces on a long-term, steady basis to producers, content companies, ad agencies, etc. The subleasing income is well over the original lease and every month brings a steady positive cash flow stream.

[Steffmo]

I've been in this for 25 plus years....so maybe I qualify as an old timer to some. I have a healthy upper mid business and this is how I see the next five years.

First let me comment on Bjornson's thoughts...very noble and idealistic. Also impractical. If you take the numbers that are required to start and upper end room to an accountant...the guy will run screaming from the room. The numbers simply make no sense. I'm not saying that you can't do it. But I AM saying that if it is done it will be on guts and passion, not business.

The worst investment in the world is an upper end console, unless you have the work lined up as a producer. Waiting for people to show up and book you is death.

The idea of having musicians is good, but it didn't save Muscle Shaols, and they had the best.

So what models might work. In NYC I would say Sear has a chance because he has things no one else has, that work in the tracking realm. Which means he is immume to the Pro Tools war....because his model assumes you TRACK there, and not necessarily mix there. The Avalon console....is a one off piece a lot of cool artists will want to check out, plus Walter is a legendary figure. PLUS....and perhaps most importantly....he owns the bulding.

Then there is Stratosphere.....wich works becoause those guys have record deals to service, and the hip factor so people want them to produce.

Which is the key word in my book....to Produce. I spent a great evening with Tony Bongiovi a few years ago discussing among other things his loss of the Power Station. He shared that TPS really never made money outside of spec and production deals that paid off. When he hit a dry spell, the bank gained the right to approve operations. They of course saw these deals as 'giving away time" and restricted it. Without that income stream, the studio failed.

To me even an upper end studio has to have some production and publishing interest. Perhaps even a label or distribution deal. Every minute that the studio sits unused, unless maintantence is going on is a waste. Any band that can sell 2000 CD off stage when touring is a potential project because 2000 CDs at full pop pays for the sessions and the CDs.

There isn't a lot of cash needed to do this. Some eager and talented interns help, and a willingness to forgo sleep is critical.

The activity and self promotion the records provide boost the studios visability and credibility, and the money often comes in when you need it. Additionally, people you supported when they needed the hand often come back after having some success. They certainly have here, and it helps tremendously.

As far as the studio itself is concerned, I think that we are on the verge of a new era of player, and audience interest in great players. the jam scene has created an incredible superstructure of fans and venues built underneath the old line record business. This year it will break out. The is a reason the Cream is touring next year....they know the market has swung back that way.

Point is.....have a great live room, with some isos. That can't really be recreated in a basement. and a vibe that encourages performance...loose, friendly. Good cue system is crucial, as is monitoring. Lighting and ambiance help as well.

One of the great things about this forum iis that it clearly advocates the high end preamp and mic school of recording. The big console is a studio killer. There will be a few in great mix rooms if you need one. Support them. But don't tie yourself to a big console unless you clearly have the established revenue streams to make it work.

Get quality known gear the good engineers are familiar with, with good patching for outside racks. Have different spaces folks can experiment with for cool sounds.

In short....make the process of recording and creating music fun again. The legwork is done in the production. And if the song and execution have the vibe, the mix can be done, in the box, out of the box, or on a great console..........it won't matter.

[thethrillfactor]

Originally posted by Steffmo
I've been in this for 25 plus years....so maybe I qualify as an old timer to some. I have a healthy upper mid business and this is how I see the next five years.



Which is the key word in my book....to Produce. I spent a great evening with Tony Bongiovi a few years ago discussing among other things his loss of the Power Station. He shared that TPS really never made money outside of spec and production deals that paid off. When he hit a dry spell, the bank gained the right to approve operations. They of course saw these deals as 'giving away time" and restricted it. Without that income stream, the studio failed.

Nice post old timer.

This also worked for John King over at Chung King.


Only problem in your idea is that if you are already paying a huge overhead per month($10k-15K in bills), having a bunch of maybe projects won't get the bills payed.


Also what worked great in the 80's at the big sound motels which people don't do anymore is true collaboration.

What i mean in true collaboaration is not some internet leak that Alecia keyes is doing a track with Usher and all the Paparazzi shows up at the studio. But in the old days you could be working with one artist in one room, i could be working with another, i hear something really cool coming out of your room, i ask you over with your people and you check my sh*t out and we see if we could so something right there. Just for fun, spontaneous.

In those days it wasn't like"well let me call my people and i will let you know in a month if the label says its ok" it was like"Man i love your ideas and vibe" are you doing something right now? Do you wanna try to do something? I got the studio all night long, lets have some fun and invent something new.

Or how about"I got the studio booked for a month, would you mind coming over and helping me on some ideas?"

By the way Jon's idea is actually what a lot of the sound motels do here in NYC. They book out their rooms to producers on a monthly basis. Even the inventory and storage rooms get turned into mini production rooms to pay the rent.

[thethrillfactor]

Originally posted by bjornson
I can't believe some of the oldtimers aren't chiming in with nuggets of wisdom.....
I was hoping for some real insights and ideas

My idea while risky and crazy is in acquistion.

Instead of pulling back when times a tough, push back and make changes.

My idea is to research the smaller/production/home studios in the area that have low overhead and high volume(clients) and to try to acquire them under a High end studio umbrella.

Basically, what i would offer them is to fill in the gaps where they are lacking in technical/equipment wise and association with a name with prestige and help with financial management.

What i get out of it is an agreed percentge of the profits and when some of the clients would want to do something bigger or if they get signed, they get sent over.

This would work vice versa if there are clients that can't afford the Higher End place, they would still get booked in one of the smaller studios in the chain.

Also the smaller places could be a traning ground for the future engineers in the bigger facility. This way they are brought up through the ranks with ideas on how things work.

Again its risky and needs some kinda capital for investment but in the end it could pay off.