Commercial or producer owned studio?

[Anderson]

I had a discussion with a client yesterday who wants to build a new studio and we ended up talking very openly about the future of the recording studios in Europe.

His statement is that if your studio is equipped with top of the notch gear and all the « industry standards » like PT HD, a SSL or Neve, then there will always be some freelance SE or producer/label to rent it, and he plans to make some money this way. He thinks he can rent his studio enough days a month to break even, and the rest of the time use it to work on his own private projects. He is talking of a 1m€+ facility.

My point of view is that there will be less and less SE or producers out there to rent a studio, even for 500€ a day, since more and more of them already have at least a very decent setup at home. They may rent it to track drums and make a final mix, that’s it. I stated that IMHO we are more and more headed towards Producer Owned studios with the producer being the actual SE, or the studio having an in-house SE, and living of their productions, not of the studio. I tried to tell him that he should not count on renting his studio more than 3-5 days a month.

He stated that there were still very big commercial studios that were doing just fine nowadays. That purely commercial studios still had a future.

But If you look (at least in my region of the world) at the state of the market, you notice one thing : most of the commercial studios still standing are not making any profits and are owned by people with so much money, that they actually don’t have to care about making any profits or even loosing some money. I had many discussions with big studio owners telling me « I’m doing this for pleasure, I know I will get most of my money back selling the building in 10-15 years with the housing market always on a positive trend. I don’t have to care!»

What do you guys think of all that ?

[Shaman]

Same opinion here.
If he can afford his studio for his own projects - he should do it.

No chance of making profit with it as a rental place these days...

[Jose Mrochek]

Originally Posted by Anderson

His statement is that if your studio is equipped with top of the notch gear and all the « industry standards » like PT HD, a SSL or Neve, then there will always be some freelance SE or producer/label to rent it, and he plans to make some money this way.

I think the focus should be on the other side of the glass. You don't need a million dollar facility for mixing. But I would think that if you have the best TRACKING rooms in the city you will always have clients. I would suppose it works that way.

[Kenny Gioia]

The commercial studios that are already built and have the Neve/SSL paid for will be the last to die off. They just need to pay rent and maintain their gear.

Building a studio from the ground up and renting it out as a "sound hotel" is a ludicrous idea nowadays. Unless you already have the clientele in line for the next year.

The "built it and they will come" philosophy is just insane.

YMMV

[Jules]

There will be LOTS of engineers that will LIKE to use the studio.

But will they have clients that WANT to pay the engineer AND for the fancy studio...

Depends on the business 'climate' in his area - I dont see too many bands paying for time in a 1 Million $ studio - labels perhaps..

What is the label situation like in that area?

[kats]

Depends on your market:

It's probably the route it'll go. Since the studio mantra today is to cut overhead - the tracking room might have a place. If you can cut he cost of mics, pre's, and large room costs out of you business plan - you can operate really really lean & just pay for the tracking room when you need it.

On the tracking room side, you only have to be the best in your market. For eg, in my market, I can invest $250,000 in mics/pres/essentials, and acoustics and be untouchable. I can get 5000sq ft for $25,000 a year rent.

I can book the room as low as $2000/week and still make $50,000. Not bad, 25% return and at $2000/week (cheap) I would be booked solid. Everyone's happy. The amount you charge and have to invest depends on the market your in. The guys renting your facility can operate a nice 500sqft mixing room with 30k worth of equip and produce outstanding work.

[thethrillfactor]

Originally Posted by kats

Depends on your market:

The guys renting your facility can operate a nice 500sqft mixing room with 30k worth of equip and produce outstanding work.

For how much?

That sound like a personal studio to me.

[thethrillfactor]

Originally Posted by Anderson

What do you guys think of all that ?

Own the land first.

If he wants to throw his money away after, than more power to him.

If you build a super studio and its a monthly type rental than you will be screwed.

[Anderson]

Originally Posted by Jules

There will be LOTS of engineers that will LIKE to use the studio.

But will they have clients that WANT to pay the engineer AND for the fancy studio...

Depends on the business 'climate' in his area - I dont see too many bands paying for time in a 1 Million $ studio - labels perhaps..

What is the label situation like in that area?

The situation is not good, small labels, no money, small market. Belgium was a good destination early 90's because they were cheaper than France or Germany, but now that advantage is gone (except that I think they do have lots of great SE around here). And so is the will of the labels to take risks!

Even big Studios like ICP seem to be having not such a good time (rumors, nothing verified).

I don't know lots of musicians/producers today ready to pay 3000€ a week to record. I have tried to explain that to the client, but he does not get it. If you look at things his way, it's all very logical... but I'm afraid his vision is biased.

I agree that having a good tracking room is essential and could bring clients, but it's far from being cheap if you want something Pro (that really works) with a good look (important as well). For him I would say acoustics should cost him around 300k€ for the CR+LR. That's a lot of money!

It is a very complicated situation! It feels like the industry is at a crossing, and it's hard to tell which way to go.

[Jay Kahrs]

I think the only model that might work is a tracking room for about $500 a day but it's gotta be freelance friendly.

Find a warehouse or other huge unused space, build a couple of iso booths and a control room that's big enough to hold the crew. I'd refurb & install a B-level analog desk like an older MCI, Trident, Soundworkshop etc. and have tons of tie-lines for visting outboard gear or multi-tracks. Toss in a dozen or so cool compressors, EQ's and a handful of mics...just enough that you can track a record without compromises.

It doesn't need to be a million dollar place. It just needs to work at every level. Meaning decent isolation between rooms, no-booking funk ups, redundency at all levels, and most importantly...keep the gear working.

[kats]

Originally Posted by thethrillfactor

For how much?

That sound like a personal studio to me.

Not a studio, a mixing room. If they rent the studio for tracking, they don't need a personal studio. They do need a mixing room though, but at a substantially lower investment - especially if they are ITB guys with a few pieces of choice outboard.

Basically a band would be hiring the skill of a mixer, who in turn is able to pass on a big chunk of savings by having a relationship with a good tracking room who by virtue of the business model is able to provide services at a much lower fee.

A tracking room OTOH, would serve itself better by dealing directly with these lean studio "sattelites" rather than stepping on any toes by dealing directly with bands. The tracking room would be a "wholesaler" in effect selling to the "retailer" IE the mixing room.

So instead of having a dozen studios owning the same expensive mics and pre's competing with eachother, but who really only need to use that equipment 1 week a month - cut that expense from their budget and basically share the equipment with eachother at a reduced cost (by supporting a tracking room).

[Bob Olhsson]

"The best studio in town" will probably always do fine. The problem comes when it gets challenged in that status by somebody new with a lot of money.

The key to success is the staff. The key to profitability is having enough busy rooms that can share the staff and the overhead.

[cgarges]

As a freelancer, my first question to him would be, "What do you offer that other studios in the area don't already?" Take a look at the ones that are still around and the ones that aren't and try to see what the differences are. Building another place just like a bunch that already exist probably isn't a good idea, unless he's already so busy himself that he's doing it out of necessity.

Chris Garges
Charlotte, NC

[gainreduction]

Isn't the Galaxy studio in Belgium ? How could you compete with that ? Terrible idea... sounds to me like he just wants the place (for himself) sooo baaaad that he actually belives it's possible. Investing 1.000.000 euro would build a nice place but hey..., really..., if he's taking a loan like that from a bank (or does he have the money ???) the interest would be in the lines of 5000 euro a month !!! And you need to pay the loan back too... the place needs to be rented out every day, all year if you do the math and add all other expenses. If he has the cash, then fine, spend it and loose it, not my problem but if he's taking a loan do him a favour and talk him out of it.

The only way of doing it is having your own work finance your place and what costs may be involved running it. Then you can rent it out when you don't need it to earn some EXTRA money to spend on some nice rackfiller

[w2w]

You really have to be out of your mind to open a new studio & dump a large amount of money in it,hoping it will pay for itself these days, just being a new guy in the biz & on the street.The only exception being,you are a known Producer or Engineer & its your room,with projects & loyal clients,which as stated before,is becoming a trend.(M.Wagner for a perfect example).What I do see a market for is bigger rooms with analog consoles & nice outboard gear,taking advantage of the guy with 2 channels of Great River at home & his DAW & one nice mic,and all the other bands recording at home,and going after that big share & getting them to mix on the pro gear,gives them the final piece to the puzzle.They saved $$ on the tracking end & can get a more pro sounding record,and usually a more experienced set of ears.The next question is:"Well how do I get em to come in".I have a friend who did exactly that.Yes,he did drop his rates some,but as I kept telling him,would you rather be booked 4 days a month at X amount or 15 to 20 at XX amount and be working more,getting the word out & using the studio.He is now booked steady AND starting to make a little money,not a killing,but his place has people in it now,making records.
One very important factor,and thats where the"why am I doing this in the first place" comes in.If you are just running a business with nothing more than profit on your mind,GOOD LUCK!! If you are a musician,engineer,whatever, & LOVE doing this,and have your overhead somewhat in line,you will find a way.The more creative thinking owners are the ones finding new ways to bring in business.Is there one magic formula? Of course not.Who knows what the next trend will be.Anyway,before I got on this rant,my original thought,I just think its crazy & cringe when I read posts of people wanting to know what to spend thier 401K plans on, because they want to open a new super studio & get producers to come in & fill it up.More power to you,and who knows,to each his own......Take a good look before you jump in...

[DirkB]

Originally Posted by gainreduction

Isn't the Galaxy studio in Belgium ? How could you compete with that ? Terrible idea... sounds to me like he just wants the place (for himself) sooo baaaad that he actually belives it's possible. Investing 1.000.000 euro would build a nice place but hey..., really..., if he's taking a loan like that from a bank (or does he have the money ???) the interest would be in the lines of 5000 euro a month !!! And you need to pay the loan back too... the place needs to be rented out every day, all year if you do the math and add all other expenses. If he has the cash, then fine, spend it and loose it, not my problem but if he's taking a loan do him a favour and talk him out of it.

The only way of doing it is having your own work finance your place and what costs may be involved running it. Then you can rent it out when you don't need it to earn some EXTRA money to spend on some nice rackfiller

And there's also ICP in Brussel...

Very bad idea .

Greetings,
Dirk

[Lectra]

Please provide me with some of the stuff your friend is smokin' and tell him he's in the need for rehab... Big time !!!
In Belgium forget it..

Wish him luck
I'll start praying right now...

[audioboy6]

Originally Posted by Jay Kahrs

I think the only model that might work is a tracking room for about $500 a day but it's gotta be freelance friendly.

Find a warehouse or other huge unused space, build a couple of iso booths and a control room that's big enough to hold the crew. I'd refurb & install a B-level analog desk like an older MCI, Trident, Soundworkshop etc. and have tons of tie-lines for visting outboard gear or multi-tracks. Toss in a dozen or so cool compressors, EQ's and a handful of mics...just enough that you can track a record without compromises.

It doesn't need to be a million dollar place. It just needs to work at every level. Meaning decent isolation between rooms, no-booking funk ups, redundency at all levels, and most importantly...keep the gear working.

I think your right on this one. I can't see people spending much more than this these days. Even if you have all the best gear, The budgets just aren't there like they used to be.

[ink]

Have your potential studio-building client approach a bank or venture capitalists for a loan to fund his vision. This will provide valuable feedback about the soundness of his own plan; and what he might expect in return for investing his own 1 million Euro plus.

I learned much with this approach before abandoning good advice.

I’m building a less-than-million- Euro-plus studio that is still likely considered nice for my market. I started my still-to-be-finished “big commercial studio project” years ago, when it perhaps made a tiny bit more sense than it does now. Unfinished, it remains a project studio of sorts.

I’d have been easily broke by now were it not for sort of enjoying several years of DIY construction in every bit of free time, having a few great friends sharing the pain, as well as having donations of time and talent from curious onlookers and a few who simply pitied me. Also, I started with benefit of many items listed in this thread (Owning a piece of property with wildly escalating value, having great gear paid from the old days, and a profitable home studio with a few clients, etc.)

My plan has always included the question, “How do I keep this mess afloat with my own work?” which used to be a mix of studio management and recording. I believe today’s climate means my own work includes being a property manager/rental developer in a large portion of the building’s unused space instead of simply being a “studio guy”.

So, even if your client does pass the bank test or the venture capital test, he should clearly understand that building and/or running a commercial studio means some of the downtime he plans to use for his own productions will get spent running the construction, and then running the commercial facility… unless he is spending, or earning, enough to hire those functions out.

[Anderson]

Originally Posted by gainreduction

sounds to me like he just wants the place (for himself) sooo baaaad that he actually belives it's possible. Investing 1.000.000 euro would build a nice place but hey..., really..., if he's taking a loan like that from a bank (or does he have the money ???) the interest would be in the lines of 5000 euro a month !!! And you need to pay the loan back too... the place needs to be rented out every day, all year if you do the math and add all other expenses. If he has the cash, then fine, spend it and loose it, not my problem but if he's taking a loan do him a favour and talk him out of it.

From what I understood, he DOES have the money at hand, no bank loan whatsoever. So as you mention, he can spend it and loose it... I completely agree with you, but like I said he seems quite assured of his idea. And although he is a very nice guy, he seems to live on another planet where money is not a pb. I still think I cannot let him go ahead, this is a small suicide.

I'm going to try to make him change his mind (downgrade the whole project to make it as sustainable as it can be) without losing him as a client, which is not an easy task. I still would like the job, but I also want to be clear with him about where he is headed. He is also trying to do too many things at the same time (Music, post prod, TV post, 5.1, sound design... lots of stuffs to manage!)

Thank you all guys for the input, it makes it clearer for me to know other pros opinions.

Cheers!

Cheers!