Recording

NASHVILLE SKYLINE

To recap our story so far: Nashville's studio community found itself caught up in the throes of a long-awaited consolidation. Emerald Re-cording, flexing 5/01/1999 8:00 AM Eastern

To recap our story so far: Nashville's studio community found itself caught up in the throes of a long-awaited consolidation. Emerald Re-cording, flexing some pent-up financial resources, bought Masterfonics out of bankruptcy; Seventeen Grand expanded by acquiring mid-sized facility Love Shack. And both facilities made it clear they were still hungry, which caused several other facilities around Music Row to spruce up the grounds and clear up their dance cards. Meanwhile, Sixteenth Avenue Sound quietly closed, as did October Studios and a few other supporting players. On other fronts, country record labels and music publishers were doing a similar dance, with Sony/Tree handing out pink slips to writers (who burn up a lot of studio time on demos). MCA Records-now owned by a Canadian liquor manufacturer-folded the Decca label, the first high-profile closing of this year (last year saw at least three other labels-including Almo Sounds and Rising Tide-close). Then there is the sub-plot in which Christian labels, whose business has been based till now in Nashville, balked at re-signing musicians union pension and welfare agreements, with murmurs that other cities have studios and musicians, too.

Cue the organ, break for a soap commercial.

Nashville remains in motion. It's a city where everyone seems to know everyone else's business, and the gin-soaked Greek Chorus chronicles and laments every new episode nightly down at the Sunset Grill-where schadenfreude is a cocktail as well as a concept. Everyone has an opinion as to what's going on and what the next plot twists might be, but unlike most soap operas, there's little in the way of consensus.

"I think what we'd been hoping for a long time is finally starting to happen," says Brett Blandon, manager at Ocean Way Nashville and one of the optimists. "The labels in L.A. and New York are starting to view Nash-ville as a kind of retreat, where their artists can make great records for competitive prices without the pressures of those cities." Blandon cites an increase in major-label pop, R&B and rap records being made in Nashville, as well as the realization by labels' country divisions that the pop market offers revenue possibilities that country's current tailspin doesn't. Blandon mentions the pop success and Grammy nominations of Faith Hill's "This Kiss," and producer Hugh Padgham's work with Kami Lyle in 1998 as examples of this trend. However, Blandon concedes, projects and producers like that may have been "a year too soon" for Nashville to appreciate what they can do for the studio base here. "There's a kind of maturity that's being forced upon Nashville at the moment," he continues. "We're in a zone in between the original good ol' boy way of doing things and the cutting edge. Nashville's finally becoming accepting of change, if for no other reason than it has to."

Josef Nuyens, owner of the Castle Studios, is less sanguine. "I don't think anything's going to really change in the end," he says, "at least not as far as studio revenues are concerned. My long-term prediction is that many of the studios that are growing by consolidation now are going to break apart five years down the line because they won't be able to carry the weight that the cost of these new acquisitions brings with them."

The same day we spoke, the Bloom-berg wire carried the news that insurance giants Aegon and Transamerica had merged, and the markets reacted positively based on the notion that insurance companies, which also operate under heavy profit margin pressures, can better withstand those pressures as larger entities. Does the same apply to recording studios? "No," says Nuyens, who also has an investment business. "Insurance companies are buying capital assets that they can put into mutual funds and make dividends on. Recording studios that buy other recording studios are buying devaluating assets, particularly if they're just buying equipment and not the real estate." Nuyens' response, aside from noting that the Castle's 35 acres continue to appreciate thanks to real estate development nearby, is to diversify; the studio recently created a joint co-publishing deal with Warner Chappell Music and is starting up an online music retailing operation called tappedinto.com. "You can keep your studio running, but you need other sources that can return profits faster to support it," he says.

Recording Arts owner Carl Tatz says that, while no one knows what's going to ultimately happen in Nashville, or even whether the downward trend has bottomed out yet, the future will revolve around rates. "There's a void out there right now in terms of figuring out what's going on," he says. "On the one hand, the consolidation trend is actually heartening because I see it as a way of controlling rates. On the other hand, the record label people I talk to tell me that they're looking at two years before things turn around. They see what's going on with the studios, and they're looking to get more bargains in terms of rates. I have one major producer coming in who never haggled on rates before, and this time he's asking for a rate reduction. Not a whole lot, but the fact that he's asking tells me something."

Tatz also expects more work to move into producer-owned studios, a complaint voiced by other studio owners and managers. But he also believes that many more traditional Nashville producers prefer to use conventional studios rather than spend the time needed to become familiar with operating their own digital equipment. "I'm curious about how all this will come out," he adds, "but in a way, I want to know but I don't want to know."

In fact, this is a script with no ending but with plenty of dangerous liaisons and the occasional pratfall for comedy relief. Meanwhile, Aunt Gertrude is lying in a ditch on the other side of town. And what of John's love for Mary? Stay tuned...