Yet another major studio bites the dust

[drumzealot]

Originally Posted by Mike Caffrey

Certain things will sell because all it take is to let people know that it's available. In many cases advertising money comes to amplify sales - in other words, the cause and effect is backwards from what you're suggesting.

Marketing is simply getting the right product in front of the right people. I would imagine that the number of albums sold without a marketing campaign of some kind is relatively small, if not nonexistent. How do people buy something they are not aware of?
As far as which comes first, sales or ads, I’m not sure that sales of any size would be possible without advertising for any product be it a CD or diapers. Perhaps, on an extremely small scale, units will convert simply by word of mouth or some sort of organic network (e.g. at concerts).
I’d be very interested in an example of an album that sold say…over 100K copies that was not supported (as in preceded) by a marketing campaign. I hope you don’t read this as sarcasm. If such a thing exists, I would love to look into it more (I work at a marketing research firm).

[Mike Caffrey]

Originally Posted by drumzealot

Marketing is simply getting the right product in front of the right people. I would imagine that the number of albums sold without a marketing campaign of some kind is relatively small, if not nonexistent. How do people buy something they are not aware of?
As far as which comes first, sales or ads, I’m not sure that sales of any size would be possible without advertising for any product be it a CD or diapers. Perhaps, on an extremely small scale, units will convert simply by word of mouth or some sort of organic network (e.g. at concerts).
I’d be very interested in an example of an album that sold say…over 100K copies that was not supported (as in preceded) by a marketing campaign. I hope you don’t read this as sarcasm. If such a thing exists, I would love to look into it more (I work at a marketing research firm).

Historically there are two reasons that people have bought albums, they heard it an liked it radio/MTV/Napster and word of mouth. No one has ever bought an album from an new artist based on a magazine ad.

Now, blogs and websites like Pitchfork have far more influence on breaking bands than anything someone does at a label.

Songs placements in TV/movies as well.


None of that really falls under marketing and advertising.

[Mike Caffrey]

Originally Posted by synthoid

Right, I understand what you are saying, and it makes sense. I just think that it is difficult for record labels to pull this off.

I've been signed to two independent labels, and both of them write artist agreements that give them a cut of all revenue sources (publishing, live performance, you name it).

The problem is that a small record label doesn't have the staff to do all the stuff that needs doing: producing recordings and video; imaging and promoting the artists; producing and promoting and managing a live show. In particular, I have seen very few small labels that have the expertise and capacity to produce decent live shows. If they outsource stuff, their cut shrinks and at some point it doesn't amount to much. If responsibility is left to the artists for, say, developing and producing the live show, then it is hard for the label to demand a substantial cut.

In the old days, artists complained when a record label took a huge cut of recording revenue, even though the label had borne all the expense of producing the recordings. How much more will artists complain if labels try to take a big cut of live performance revenue when the artists have had to build their live show up on their own over the course of many years of hard work and expense?

Maybe major labels will be able to pull it off, I don't know. Certainly the model makes sense with a act that is manufactured out of whole cloth by the label, like Backstreet Boys or Spice Girls. But does it make sense for an independent label with the kind of artists that they typically sign? I am not so sure.

Not much insight left in the Amazon / Google analogies I think.

-synthoid

Are you saying that indies do have the money to work on a major scale?

That's kind of a given. The indie model has mainly been to have a niche and keep production costs down. In the indie model, the label is the brand - think Sub Pop - the label has the audience so the marketing, in the sense of dinding and knowing how to reach that niche audience has been done.

Majors can do it. Korn and Robbie Williams have 360 deals with their labels. Madonna has a 360, but it's with a venture capital company rather than a label. Hey, look at that, Madonna's innovating again!

Someone needs to get the Stones, U2 and Coldplay to change their deals to this approach, plus a couple of country artists and an hip hop artist and then it will start to become the norm.

Or someone has got to make a killing by giving their album away with discount coupons for something in it - a hip new jean, or half price/preferential seating for a summer tour and then make a killing, so that other bands and labels want to emulate that deal.

[jindrich]

MIke,
you keep thinking of Marketing as advertising alone, and that's not correct.
Marketing is a mix of the Product, Price, Placement and Promotion, and advertising is just part of the latter, along with PR, word of mouth and point of sale.

I think the records industry needs to revise all those 4 concepts and reinvent them from scratch. Turn the product into something valuable again, reduce prices, find new and better ways of distribution and promote in a new fashion.

Prices should be €9.95 for a CD, and turn it into an "impulse buy" product. You must then work the cost structure around that new price but it's doable, you can multiply sales by reducing prices and turn more profit in the end. To start in that direction, convince the EU parliament that records are a cultural item, and decrease its VAT to the reduced one, just like books, cause today they're treated with the max VAT like shampoo, a car or jewelry.

Then bring back music programs to TV, they're all gone. Instead of wasting billions in stupid avertising, buy an hour in prime time in major TV channels all around and produce slick music television for promoting bands (like it has been for decades), and bring them CLOSE to the public, "you can't love what you don't know". Create hype around music again. And those TV programs can even be profitable if done properly and have success.
Then post them in YouTube after they'be been broadcasted for people to see over and over.
Don't remove artists from youtube for some stupid copyright reason.
Remove all anticopy schemes than only serve to annoy the legal customer.

etc, etc.

[junior]

Again, jindrich, +1!

[drumzealot]

Originally Posted by Mike Caffrey

Historically there are two reasons that people have bought albums, they heard it an liked it radio/MTV/Napster and word of mouth. No one has ever bought an album from an new artist based on a magazine ad. Now, blogs and websites like Pitchfork have far more influence on breaking bands than anything someone does at a label. Songs placements in TV/movies as well. None of that really falls under marketing and advertising.

You are right about labels falling behind on how to market their product in today’s market, which is why sales have plummeted.
Actually, most of what you describe falls under marketing. The material that is played on those various media types (except for pre-litigation P2P networks) are chosen based on what they think will maintain or increase their audience size, which determines the price of their ad slots. Radio/MTV choose material that will maximize the value of their ad time. The methods used to choose that material is "marketing."
Now that P2P networks are somewhat regulated people are finding ways to get their product to the right audience on this relatively new media. The study i just did looked at what music people buy on the internet (either download or hardcopy). We found that when people searched for a specific artist they were exposed to ads for other artists in that genre. Sales of those other artists went up as a direct result of those ads.
As far as Pitchfork is concerned, you'll see these web pages are covered with ads. The selection and placement of those ads are all determined by algorithms designed to maximize sales. The home page contains a number of artist profiles. Pitchfork chooses those based on what they think will maximize traffic (making the ad spaces more valuable).
Even word-of-mouth has been infiltrated by marketers. Buzz marketing is the practice of placing a “fan” at a concert that goes around meeting people and telling them how much they love the band that is playing. I actually encountered one at a show. He started in on his pitch and I could tell there was something disingenuous about him so I called him out on it. He eventually admitted he was being paid to be there. But this type of buzz marketing proved too expensive so it is not widely used anymore. Now that blogs are popular, and more cost effective, they are full of buzz marketers.
The marketing of music in the future, I believe, will revolve around the artist-to-fan model on sites much like Pitchfork. Labels will either jump on the new model or get rid of their marketing and distribution all together and simply provide advances and front production costs. Some of the innovators of this new model are:
Top Spin Media (founded by Peter Gotcher)
Echotunes.com (owned by Ticketmaster)
Bandcamp.mu

[Mike Caffrey]

Originally Posted by jindrich

MIke,
you keep thinking of Marketing as advertising alone, and that's not correct.
Marketing is a mix of the Product, Price, Placement and Promotion, and advertising is just part of the latter, along with PR, word of mouth and point of sale.

I think the records industry needs to revise all those 4 concepts and reinvent them from scratch. Turn the product into something valuable again, reduce prices, find new and better ways of distribution and promote in a new fashion.

Prices should be €9.95 for a CD, and turn it into an "impulse buy" product. You must then work the cost structure around that new price but it's doable, you can multiply sales by reducing prices and turn more profit in the end. To start in that direction, convince the EU parliament that records are a cultural item, and decrease its VAT to the reduced one, just like books, cause today they're treated with the max VAT like shampoo, a car or jewelry.

Then bring back music programs to TV, they're all gone. Instead of wasting billions in stupid avertising, buy an hour in prime time in major TV channels all around and produce slick music television for promoting bands (like it has been for decades), and bring them CLOSE to the public, "you can't love what you don't know". Create hype around music again. And those TV programs can even be profitable if done properly and have success.
Then post them in YouTube after they'be been broadcasted for people to see over and over.
Don't remove artists from youtube for some stupid copyright reason.
Remove all anticopy schemes than only serve to annoy the legal customer.

etc, etc.

No, I don't think about marketing as advertising alone, I'm just writing about it that way. Partially because of the posts I'm responding to.

Marketing, if done even half right, goes way deeper than anything we've discussed here. And what marketing will involve will be unique to each artist, genre or even product.

[Mike Caffrey]

Originally Posted by drumzealot

You are right about labels falling behind on how to market their product in today’s market, which is why sales have plummeted.
Actually, most of what you describe falls under marketing. The material that is played on those various media types (except for pre-litigation P2P networks) are chosen based on what they think will maintain or increase their audience size, which determines the price of their ad slots. Radio/MTV choose material that will maximize the value of their ad time. The methods used to choose that material is "marketing."
Now that P2P networks are somewhat regulated people are finding ways to get their product to the right audience on this relatively new media. The study i just did looked at what music people buy on the internet (either download or hardcopy). We found that when people searched for a specific artist they were exposed to ads for other artists in that genre. Sales of those other artists went up as a direct result of those ads.
As far as Pitchfork is concerned, you'll see these web pages are covered with ads. The selection and placement of those ads are all determined by algorithms designed to maximize sales. The home page contains a number of artist profiles. Pitchfork chooses those based on what they think will maximize traffic (making the ad spaces more valuable).
Even word-of-mouth has been infiltrated by marketers. Buzz marketing is the practice of placing a “fan” at a concert that goes around meeting people and telling them how much they love the band that is playing. I actually encountered one at a show. He started in on his pitch and I could tell there was something disingenuous about him so I called him out on it. He eventually admitted he was being paid to be there. But this type of buzz marketing proved too expensive so it is not widely used anymore. Now that blogs are popular, and more cost effective, they are full of buzz marketers.
The marketing of music in the future, I believe, will revolve around the artist-to-fan model on sites much like Pitchfork. Labels will either jump on the new model or get rid of their marketing and distribution all together and simply provide advances and front production costs. Some of the innovators of this new model are:
Top Spin Media (founded by Peter Gotcher)
Echotunes.com (owned by Ticketmaster)
Bandcamp.mu

You've left out two important staples of effective music marking; cocaine and hookers.

[drumzealot]

Originally Posted by Mike Caffrey

You've left out two important staples of effective music marking; cocaine and hookers.

You've been to the same conventions as I?

[Reptil]

Originally Posted by jindrich

....snip......
Marketing is a mix of the Product, Price, Placement and Promotion, and advertising is just part of the latter, along with PR, word of mouth and point of sale.

I think the records industry needs to revise all those 4 concepts and reinvent them from scratch. Turn the product into something valuable again, reduce prices, find new and better ways of distribution and promote in a new fashion.

Prices should be €9.95 for a CD, and turn it into an "impulse buy" product. You must then work the cost structure around that new price but it's doable, you can multiply sales by reducing prices and turn more profit in the end. To start in that direction, convince the EU parliament that records are a cultural item, and decrease its VAT to the reduced one, just like books, cause today they're treated with the max VAT like shampoo, a car or jewelry.

Then bring back music programs to TV, they're all gone. Instead of wasting billions in stupid avertising, buy an hour in prime time in major TV channels all around and produce slick music television for promoting bands (like it has been for decades), and bring them CLOSE to the public, "you can't love what you don't know". Create hype around music again. And those TV programs can even be profitable if done properly and have success.
Then post them in YouTube after they'be been broadcasted for people to see over and over.
Don't remove artists from youtube for some stupid copyright reason.
Remove all anticopy schemes than only serve to annoy the legal customer.

etc, etc.

+2 thumbsup

[Jan Folkson]

Sad to see Olympic go. Decreasing budgets + increasing expenses = Teh Suck.

When the Music Business becomes more about the music the business will improve.

[Pearl.masters]

The tech at the studio I'm at now used to be the tech there, and told me a niceish story amidst the doom of the closeur. Apparently U2 were the ladt clients in and they somehow managed to find out the service history of all the staff, and ended up giving each member £600 x the amount of years they worked there! So generous considering some guy had worked there for 20+ years still the closeur is very sad and makes me feel priviliged working in a studio that's booked up for months.

[Mike Caffrey]

Wow. That was pretty nice of them.

[markbell]

While I understand all the reasons as detailed well on here, the bottom line is unfortunately large studios need to be run as ruthlessly as the record companies are, which means heavy cost cutting at every half opporunity

Its a sales driven market at the end of the day and for many many reasons now the sales are now non existent

No one loves the music more than me, im stupid enough to pay £100+ for an old vinyl 12" on a regular basis (although i do sell as well) so although it may sound obvious I want to ask why major studio owners /director (im an IT company director with a modest medium studio) do not groom there own talent.

Listening to the Centauri post and given now many studios have spare time slots, i would be very tempted to put together groups from contacts, give them studio time for free and sign a water tight contracted management deal. I know its hard work getting a contract for them with a major publisher, and the cost of actual marketing and production of a new label in this economic climate would be suicide (for the studio to do this as well), but the outlay for free studio time is minor and you may just create a gem.

I mean lets face it music now a days is dire at best (the majority) so whom is in a more educated position to produce the right stuff than the experienced studio itself.

Just a thought gents, i'd love to see the music coming through like it was mid 80's when I was in my teens!!

[vixapphire]

Originally Posted by gainreduction

This seems to go a little deeper....

EMI (who owns Olympic) was taken over by Terra Firma in september 2007. The deal was backed up by £2.6 billion from Citigroup, which by now is a loan undertaken by the US government as a consequence of the credit crash.

So I guess under those circumstances historical and emotional values are run over by the harsh reality that everything that is not showing major profit has to go.

BBC - 6 Music - EMI execs depart

Excellent. That means my prediction that the Capitol Building in Hollywood will be converted to loft condo's within 5 years is probably closer to reality than I thought.

Hell yeah I'm buying one of those when it happens. Hell yeah!

Sympathy for the record industry? Puh-leez. The recording industry is different (yes, it is), but the record companies made their own bed which they're now being buried in.

Creative destruction, and all that.

[Blast9]

I understand Olympic has now been saved at the last minute... Anyone confim this?

[vixapphire]

Originally Posted by jindrich

Desktop Publishing, Photography, 3D creation, Video Production and Video Post have all already suffered from this.
Technology advancements have put tools to the reach of Joe Consumer and many have jumped in and joined the "industry". The result? Prices for those services have fallen to the floor as much as quality has.

Open a magazine, see a local ad or watch certain tv channels and you'll see terrible layouts, bad scanning and photos with moire, amateur 3D and video footage with blown out blacks and whites and no dynamic range. All that was unheard of just a decade ago.



Nowadays, a $10k Apple hard+soft package totally blows away what you could do in a $1m video editing suite from just a few years ago. So everybody got one. Still, it's the pilot what matters as tools don't buy experience, skills or knowledge.

But bottom line still remains: DOES THE PUBLIC COMPLAIN?
Well then, producers won't either, and wil continue booking those a$$cheap services and professionals.


There's still demand for quality products (both in content and form), but such market is diminishing everyday. Audio and music is not an exception.

simple examples:
-How many of you have booked a pro photographer for the studio shots that go on the website and PR?
-Wasn't yout brother in law/nephew who did the website instead of a pro firm?
-Did you pay a pro designer for the CD's inlay?
etc, etc

All any of this line of carping says to me is that the value equation has shifted from scarcity of the tools to the speed and efficiency with which the technician can obtain a desired result.

The $10k rig everyone has now is a great example: Joe Schlub can achieve a great result with his bedroom rig. He may be a hobbyist who works at an accountancy as a day job, but he can get hyper-quality results if he wants to; it may take him several weekends to achieve this, however. So, for his church social events, he can be the man and have an outlet to see his hobby's fruition implemented. On the other hand, if he thinks he's going to get (or keep) gigs from the Leo Burnett agencies of the world, he's fooling himself.

In most cases, Joe isn't fooling himself; he's just having a fun noodle.

Music is no different. The tools are democratized, so more people have them. Those that take the time on their projects (provided they have some vision) with the manual in hand, should be able to achieve the same result as can anyone else with the same calibre of tools.

However, it may take substantially longer for them to achieve it. If that doesn't bother him, why should it bother us?

[vixapphire]

Originally Posted by jindrich

MIke,
you keep thinking of Marketing as advertising alone, and that's not correct.
Marketing is a mix of the Product, Price, Placement and Promotion, and advertising is just part of the latter, along with PR, word of mouth and point of sale.

I think the records industry needs to revise all those 4 concepts and reinvent them from scratch. Turn the product into something valuable again, reduce prices, find new and better ways of distribution and promote in a new fashion.

Prices should be €9.95 for a CD, and turn it into an "impulse buy" product. You must then work the cost structure around that new price but it's doable, you can multiply sales by reducing prices and turn more profit in the end. To start in that direction, convince the EU parliament that records are a cultural item, and decrease its VAT to the reduced one, just like books, cause today they're treated with the max VAT like shampoo, a car or jewelry.

Then bring back music programs to TV, they're all gone. Instead of wasting billions in stupid avertising, buy an hour in prime time in major TV channels all around and produce slick music television for promoting bands (like it has been for decades), and bring them CLOSE to the public, "you can't love what you don't know". Create hype around music again. And those TV programs can even be profitable if done properly and have success.
Then post them in YouTube after they'be been broadcasted for people to see over and over.
Don't remove artists from youtube for some stupid copyright reason.
Remove all anticopy schemes than only serve to annoy the legal customer.

etc, etc.

some great ideas there. i can't believe the VAT thing; wow.

[Umami Uni]

Well as a musician I do think its time for artists to step up their game in the songwriting process and such, of course this is why the Beatles we're so great- but my question is, with the labels working the way they do, is it even possible now adays for artists to have control over their final product?

Anyway studios will open and close, an artist will always need to record. Perhaps it's time for the engineer's and producer's that already have a nice stack of experience to cross over and start working with smaller bands in different settings besides perfectly tuned rooms;This of course being only possible if they aren't receiving the typical ridiculous amounts of money upfront ,and through points- all of which the artist probably won't make back.

[Daft]

Originally Posted by Mr_headphones

Perhaps it's time for the engineer's and producer's that already have a nice stack of experience to cross over and start working with smaller bands in different settings besides perfectly tuned rooms;This of course being only possible if they aren't receiving the typical ridiculous amounts of money upfront ,and through points- all of which the artist probably won't make back.

We've all been doing that for a few years, mate.

[Umami Uni]

Originally Posted by Daft

We've all been doing that for a few years, mate.

Oh I do agree, I've seen that bubble inflate and pop and indeed it does make things a lot more interesting. But I'd really like to see the "rick rubin's" start to really change things instead of adding more fuel to the fire.

[Rappinghood]

Originally Posted by MarkRB

Olypmic was owned by Virgin, who were bought by EMI years ago. And as everyone knows EMI are being absolutely ruthless in their "corporate streamlining" since Mr Hands and his clown army took over.

You can't really blame the accountants for selling a huge asset that is consistently losing money month after month.

We still need proper "Big Rooms". The ones like Olympic and Metropolis that aren't "quite" big enough for film scoring are pretty much doomed.
Metropolis are offering 30% off "All Services" in some perverse Christmas Sale.

I'm sure they know that once you lower your prices you will never, ever be able to put them back up. I give them 6 months max.

Mark my words.

Yeah from what I hear they're not doing wonderfully well, and although they're under new management who may be trying new things, the plain fact that they're dropping their prices for the first time in I can't remember how long (ie: never in living memory!) has to say something about how business is going there. Still, good rooms and I hope they don't go under.

Big studios have been struggling for a while in London and it always comes to a head if there's too much debt. When Sanctuary bought The Townhouse and subsequently became part of Universal, it all went wrong and Al Stone's attempt to carry it on ended up being little more than a nice gesture steeped in sentimentality.

Quoting from Pro Sound News "When Sanctuary’s fortunes imploded, Universal Music Group took over in June last year. Universal paid £45m but also took on £60m of debt to purchase Sanctuary."

That is a LOT of debt to try and make back through studio bookings - while I have no idea of numbers I imagine something similar applies to Olympic and EMI.

That said, it's not happy news about Olympic. I totally disagree with any posts on here saying that there's no need for medium-to-big studios with amazing pedigree and history when similar results can be obtained at home or wherever. Places like Olympic, Abbey Road & Mayfair are what makes London such a great place for people to record, and long may their kind remain. If going to studios as an exciting and necessary thing to do (whether it's for young bands or established artists) becomes redundant, we might as well all give up our jobs now and become street cleaners!

[ppatrick]

Originally Posted by allencollins

yeah abbey road is the center of the AE universe? not quite Everyone in audio knows professional mutiltrack recording was pioneered in the states by Les Paul. Secondly modern engineering and production was passed down from the states yet again from guys like Tom Dowd, Les Paul and even Phil Specter. Abbey was still 4track when critera was a year away from installing a 16track.

they were still 4track because of the rigorous testing that all gear received when it entered the building. they didn't move to using multitrack machines for so long because the quality of them was deemed unsatisfactory and work was undertaken to improve them. this is the same as the famous altecs/fairchilds. they were bought but not used in the studio for several months while the technical team modified them to the standard and practical means that the studio required. and as for abbey road being the center of the AE universe? of course not...............but it's not far away..........stereo anyone?

[Whitecat]

Originally Posted by Pearl.masters

The tech at the studio I'm at now used to be the tech there, and told me a niceish story amidst the doom of the closeur. Apparently U2 were the ladt clients in and they somehow managed to find out the service history of all the staff, and ended up giving each member £600 x the amount of years they worked there! So generous considering some guy had worked there for 20+ years still the closeur is very sad and makes me feel priviliged working in a studio that's booked up for months.

Looks like they might even be going one better than a Christmas bonus...

U2 to buy London studio? - Yahoo! News UK

[Claude G.]

Originally Posted by thethrillfactor

Why is this happening?

Mismanangement, over inflated costs, over inflated self importance and operating under debt.

Basically the same problem almost every corporation right now is dealing with. The music business has been stuck in this mode for so long that eventually eveyone will feel it. The major studios are no different. Everyone bought into the over budget records in the 80's & 90's that lots of studios got fat or thought they would. When the record companies started slowing down in their payments all of the leases for the million dollar consoles caught up. I mean somebody has to pay for this stuff. The smart studio owners that knew enough to own everything(no leases) and keep debt to an absolute minimum are the one's that are still around to this day. But they will even tell you that its a tough row right now.

Owning a major sound motel its a tough business. You have to not only compete with the joneses in terms of services, amenities and equipment, but blow away new potential clients as well. This involves investing a lot of money that you will probably never recoup.

hmmm...could it also be that they got too cocky? I dealt w/a few of the big companys and they were a bit snobbish and looked down on the small studio guys and the independant (not famous) artists...and now these small venues are the ones to survive....maybe the big boys should have been a bit more humble? They get no sympathy from me!