New York MetroShocking news isn't always that much of a surprise. Case in point is the February closing of New York City's legendary Hit Factory, which toward the end 5/01/2005 8:00 AM Eastern
Shocking news isn't always that much of a surprise. Case in point is the February closing of New York City's legendary Hit Factory, which — toward the end of its amazing 30-plus-year history hosting the likes of Stevie Wonder, John Lennon, Bruce Springsteen, Madonna, Michael Jackson and all the other best of the best — seemed to be on permanent death watch.
Not a month seemed to go by in the past year without rumors circulating that Hit Factory had been deep-sixed to cash in on the valuable real estate under its six SSL rooms. Finally, in 2005, the gossip came true as founder Ed Germano's widow, Janice, sold the W. 54th Street complex for an eight-figure sum, with unconfirmed reports as high as $20 million and consolidated the family business to Hit Factory/Criteria in Miami. (Janice Germano did not return calls for comment.)
As owner of one of the few large-scale recording facilities still remaining in New York City, Dave Amlen of Sound on Sound (www.soundonsoundstudios.com) had been keeping tabs on the situation all along. “I thought there were other places that would have closed down first,” he observes. “The one thing they had that few others have was that they owned their own real estate and were immune somewhat to the cycles that plagued New York City real estate — but that's a bad thing if your real estate becomes worth more than your business.”
Kirk Imamura, president of Avatar (www.avatarstudios.net), agrees with Amlen that the Hit Factory closing was essentially a real estate story and took serious issue with national mainstream media reports that held it up as the death knell for large recording studios. “There's a shortage of housing here, and if you have nice real estate, you can sell it for a song and walk away happy,” he says. “But my point is you can still make an operation like this work. It just requires a bit more ingenuity and resourcefulness in addition to doing recording sessions. We're installing a mastering room, for example, and we have a label, 441 Records, so if something that's recorded here fits, we can put it out.
“The bottom line is you want to reduce the unproductive time by being sure the staff is competent and the equipment is reliable and working,” Imamura continues. “It's about economies of scale — we have a multiroom facility with a full-time maintenance staff that's on duty, not just on call. I'm not saying we have zero down time, but we definitely work toward minimizing down time.”
At Right Track (www.rttrk.com), another among New York City's circle of heavy-hitters, president and founder Simon Andrews looks at the big picture when diagnosing the challenges of Manhattan's large facilities. “The industry is in such a downturn,” states Andrews. “The industry needs to be able to control the illegal file sharing of music over the Internet. The statistical evidence is overwhelming: 4.5 million iPods sold in the 4th quarter of 2004, with each iPod holding an average of 5,000 songs. Each customer buys an average of 29 songs on Apple, and put on perhaps a few hundred of their own. That leaves 4,770 songs taken for free from the Internet. The makers of the hardware are enjoying a boon from the stealing of songs by the customers.
“Music consumption is higher than ever,” Andrews continues. “That can be proven by the performing rights society's collections and the amount of downloading going on. When the industry is able to get legal controls over Internet file sharing, we can expect a new golden age of music that's being sold at a profit. This money will flow through the chain again, which will then come down to all the professional studios.”
Besides the larger studios needing to dig in, an additional question is whether smaller, high-quality studios in the area can expect more sessions to trickle down to them or will they face an even tighter crunch themselves? “I suppose we get much of their business,” Will Schillinger, owner of Pilot Recording Studios (www.pilotrecording.com) says, reflecting on his Neve VR-60 — equipped facility's potential new positioning. “Pilot is in that mid-sized niche that seems to work in this economy. We have also built a substantial client base over the past 13 years. We seem to do very well as both a tracking and mixing facility. Much of our business is repeat business.
“The recording standards that have become acceptable in the industry have declined with the inception of home digital recording in the hands of the novice engineers — this along with the reduction of recording budgets eliminating the ability for these artists to otherwise record in professional facilities,” Schillinger continues. “I am confident that the need for real tracking rooms with great acoustics, microphones and real engineers will have resurgence. All I can really do is advertise, spread the word and hope for the best.”
The added built-in expense of doing business in Manhattan, with noticeably higher costs for things such as food and lodging, doesn't help New York City studios either when budget-conscious A&R people have to watch their dollars more closely than ever. “I haven't done any recording in New York City in 15 years,” says a senior VP of A&R at a large indie label, whose signings have so far accounted for 17 million units in sales worldwide, speaking on condition of anonymity. “I've always been less concerned about the studio's name and more about what we're going to get for our money. A lot of studios are like, ‘We're so-and-so,’ and they want at least 50 percent more than what I'd pay somewhere else. I just can't justify that. It's not worth it. I'm not saying it's anyone's fault: In the industry's fat-cat days, they'd charge high-end rates and the major labels would pay it. We're a large indie and we're probably a lot more frugal. I treat the budget like it's my own money.
“If I've got some amazing producer/engineer and he wants to do it in New York City and we've got the money, I'm not going to fight him on it,” the A&R executive says. “But very seldom do I have a major New York City studio reaching out to me. Other than small guys, I have had nobody call me up. If somebody called me up and said, ‘Come to our studio and we'll cut you this competitive deal with anything you can get anywhere,’ I might be inclined to do it.
“Another factor is New York City's cost of living is obviously a lot more expensive. If I can have a band in, say, Atlanta or Orlando or Memphis or even L.A., I can put them up in a corporate housing apartment for a month, but it might be for what you pay for a week in New York City. If I have $200,000 all in, I have to figure out what best serves the record. Usually, it's not in New York City.”
With the Hit Factory no longer in the mix, it will be interesting to see what happens next for everyone else who, consciously or unconsciously, thought of it as the biggest, baddest player in a big town. “It's a significant event, but it should not be taken out of context,” Andrews says. “If the real estate hadn't become worth what it is, Hit Factory would have kept going. It was busy, albeit at a lower rate, but it was still busy. As far as the future is concerned for New York City, I'm optimistic simply because professional recording will always be needed.”
“There's less competition, so I'm optimistic on that level,” Amlen adds candidly. “We don't have to play a competing rate game with somebody that doesn't exist, so there are two selfish reasons that it's a good thing for Sound on Sound. But from the standpoint of the bigger picture, a flagship facility that could be a draw to New York City, that's a bad thing because Hit Factory was a great facility with fantastic rooms and attention to detail. Having a facility that good here definitely raised the bar for everyone else. But, ultimately, I think New York City itself is more of a draw than the Hit Factory.”
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