L.A. Grapevineb>Record business bloodletting continues, and with it the collateral damage to the recording industry. But as you've probably noticed, rising from the ashes is a lot of pretty interesting stuff. 5/01/2004 8:00 AM Eastern
Record business bloodletting continues, and with it thecollateral damage to the recording industry. But as you've probablynoticed, rising from the ashes is a lot of pretty interesting stuff.Investors are looking toward the future, and even The WallStreet Journal has reported that aspects of the music industryare looking viable. This month, I checked in with three of LosAngeles' most respected and knowledgeable studio operators to find thatnot only are they coping, they're thinking that 2004 is off to a prettygood start. “Cautiously optimistic” is the phrase thatprobably best describes the feedback I got from studio owners KevinMills of Larrabee, Allen Sides of Ocean Way Recording and JeffGreenberg, president of The Village.
Known as a master dealmaker, Sides combines a canny business senseand survivor's instinct with a pair of golden ears. That's acombination that's kept him in the business for more than 25 years andmakes his opinions always worth listening to.
In 1999, Sides downsized his studio holdings by selling off the 6000Sunset portion of Ocean Way (three main rooms, which had been part ofBill Putnam's original United Western studios) for a very nice price.Now, he operates a total of six rooms: four at Ocean Way in Hollywoodand two at Record One in Sherman Oaks. Sides' other companies includeClassic Equipment Rentals, Ocean Way to Go (a rental service thatprovides full, long- or short-term studios tailored to individualclients' needs) and Ocean Way Sales, which outfits installations withequipment packages and wiring. And, of course, Sides is also a busyengineer who in the past few months has worked with such diverseartists as Polyphonic Spree and Burt Bacharach.
His take? “I would say that things are looking up. We've beenthrough a period — to some degree we're still going through it— where there were so many changes in label staffing that it wasdifficult for anyone to make a decision. I'm sorry for people who'velost their jobs, but you have to think that reducing the size of thecompanies as much as they've done is ultimately a plus. The amount ofrecords being made had been cut by a huge percentage from what it wasthree or four years ago. Consequently, the companies, which wererelying in a large part on catalog, along with a minimal amount of newartists, were overstaffed.
“Now, if you look at what Interscope has done with A&M andDreamworks, and Warner with its consolidated labels, there are variousdivisions with one central organization that handles overlapping areas.Previously, they were set up with a duplication of services that wasvery costly. The companies are becoming profitable again, and they'redoing it with smaller sales.”
Sides also points out the impact of anti-piracy measures.“It's true that getting people to stop downloading for free isvirtually impossible,” he admits. “But with the lawsuitsand the film companies — who have much deeper pockets than therecord business — jumping on the bandwagon, the uploaders arethinking twice about putting material up for others to download.There's no gain for them, so why should they put themselves at risk?All of the countermeasures are starting to have some effect.
“I have to say that for the last few months, business has beenvery good at Ocean Way. If things turn around, record companies are nowpositioned to produce as much, or more, revenue than they did in thepast with much lower overhead. Of course, they're taking advantage ofthe situation now with studios. It's been so hard for so long that theywere able to make ridiculous deals. Let's face it, a lot of studioswere basically giving away time. We've always been a bit of theexception to that, but it has made it more of a struggle.”
Mills agrees that 2004 is off to a positive start. For several yearsas one of the most successful Los Angeles studio owners in terms of thenumber of facilities and rooms, Mills has also positioned himself todeal with downturn economics. Just recently, he made a real estateplay, opting to sell the building on Santa Monica Boulevard in WestHollywood that housed, for more than 30 years, the two originalLarrabee Studios.
“Now that the reconstruction of Santa Monica Boulevard iscomplete and with real estate values way up, I wanted to diversify myassets,” he comments. “Obviously, not entirely — Istill have five rooms and the rental company [Gearworks]. It's nosecret that 2003, especially the end of the year, was very slow. Butthis year since January, we've been running five to seven rooms.Clients who were slow are all getting projects and working now. Itseems to be true a lot in town. I can see it on the rental companyside.
“We've been having very good months, and we've done some bigalbums: a lot of the OutKast record, Alicia Keys, Usher, J-Kwon. Ithink pop and R&B [records] are doing quite well. I do notice thatrock projects seem to have lower budgets, unless it's a really bigartist. We do both, but we've always been strong in pop and R&B andthat's helped us. The vintage Neve consoles at East [Larrabee North isall SSL] also help us with diversification, as, obviously, does therental company.
“But I've also restructured the company so that our expenselevel is much less than it used to be,” Mills continues.“I've sold some equipment, paid off some debt and refinancedother debt. I reorganized the way the company is run in terms of techsand runners. We're more streamlined now so that if things get a littleslow, we don't get killed. It's a different dynamic; there's not quiteas much pressure.
“So for the moment, things look good. I don't expect businesswill return to where it was a few years ago because of home studios,Pro Tools and a lot of other issues. But that doesn't mean one can'tmake a moderate living in this business. That's what I intend to keepdoing. I enjoy the business, and as long as I can make some money init, I will stay in it.”
Meanwhile on the West side, The Village, according to Greenberg,also had a strong opening for 2004. Greenberg, whose background is asan agent and promoter, is known for using those skills with greateffectiveness to generate and maximize business in a wide range ofareas, from pop, rock and R&B records to film scoring andadvertising. Location helps: The Village is situated in an area wheremany entertainers live, close to major film studios and the SantaMonica media district. It also helps that the complex has numeroussmall suites that can be rented out to musicians and composers. But thesum is more than the parts: The Village just plain has a buzz.
“There are two different mindsets in this business rightnow,” Greenberg states. “The minute you cross the line intodesperation and cynicism, you lose your attraction for those who mightwant to work with you. People are attracted to positive and creativeenergy. That's what we work on having here. We've got some of thegreatest artists around in residence: Jimmy Jam and Terry Lewis, RobbieRobertson, Keb' Mo'. It's very private for them if they want it thatway, but on the other hand, we've got a community of people who bumpinto each other in the hall and sometimes end up playing on eachother's records. It's a creative and economical alternative, theantithesis to the isolation of working at home alone.”
The Village has recently invested in a complete renovation of StudioA, its vintage Neve room, adding new wiring and an upgrade to the 8048console. The Pro Tools network has also been upgraded to HD Accel.“I think part of the reason we're doing well,” Greenbergsuggests, “is that we were one of the first studios to jump inand embrace Pro Tools. We got in early, and we have a greatrelationship with, and great support from, Digidesign.
“Another thing we do is get involved in the music community.We honestly feel it's our mission to actively seek out ways to counterall the negativity and gloom and doom. We sponsor music events, likeSouth by Southwest, and I'm the president of SPARS because I think it'simportant. Our current says it best: ‘MusicLives.’ Some studio owners are saying record companies don't wantto work with studios. In my opinion, record companies want to workwhere they get good results, where their artists are happy and wherewhat they hear is exciting.”
In conclusion, Greenberg points out something many have forgotten:“Using a good studio is a great investment. For a label, it mayactually be one of the best investments on the planet! Think of whatthey get for their dollar: a completely together, technicallybuttoned-up environment, where nonproductive down time is very rare.Thanks to our founder, Geordie Hormel, who has always believed in themarriage of art and technology, we've got the plug-ins and the originalgear, as well as the live echo chambers, the mics and the tech support.As a matter of fact, we have a lot of producers and artists workinghere who've come back out of their houses!”
Got L.A. news? E-mail MaureenDroney@aol.com.