Recording studios have a long tradition of opening new audio-related ventures such as record labels, music publishing companies and, in recent years, Internet-based businesses. Then there are the staple ancillary ventures, such as tape duplication (and more recently CD-R replication) and equipment rentals. And a few studios over the decades have been associated with equipment manufacturing ventures. To describe this phenomenon, David Porter of Music Annex, working with SPARS, came up with the slogan "Diversify or Die."
However, some facility owners have branched out into other segments of the business world, acknowledging the unpredictability of the audio industry in general, and spicing up their own lives in the process.
STOCK IN TRADEJosef Nuyens, president of The Castle Studios in Nashville, has always been realistic about the profitability in owning a studio. He likes to keep himself pretty diversified as a hedge against adversity. In addition to the suburban Nashville studio, which he has operated for 17 years, and an Internet-based music sales company, Nuyens and his father, Joseph, have also run a private, European-based mutual fund management company for the past ten years, as well as a real estate venture company in the Nashville area. With a five-year average return of 23% from the stock fund, Nuyens likes the sense of security that non-studio businesses provide, as well as the balance they give his business and personal life.
"[The stock] business is the exact opposite of the entertainment business, but that's part of what makes them all work together so well," he says. "On one hand, dealing in mutual funds has made our level of accountability to studio clients go up, I think-we tend to treat them with the same level of respect on a business level that we do our portfolio clients. On the other hand, being in show business gives us a kind of looseness that translates to our other businesses. We don't come off as stiff as some other shirt-and-tie types might."
It also gives Nuyens something else to think about other than the day-to-day tussle of the recording studio business. "Mostly, though, you get a sense of balance to things, and what you learn doing one business gives you some insights into how to deal with the others," he says. "And I like knowing that my own business interests are diversified," he adds. "Makes you sleep better at night." Next up for Nuyens Properties, the holding company for all ventures except the mutual fund? A pawn shop business.
CLOTHES MAKE THE STUDIOBarry Lopate likes music and clothes. For close to 20 years he worked parallel careers running an artist management company and a custom clothing boutique in the New York Metropolitan area. He learned about the studio business working with bands and realized, as have others, that owning his own studio could be more cost-effective than renting them. In 1996 he took over a 15,000-square-foot Livingston, N.J., warehouse, which he converted first into a rehearsal space for his lead act, the band Dresden, but which quickly evolved into a two-room recording studio named Troposphere. The facility has an SSL and a pair of Yamaha 02R digital consoles, and it caters not only to his own acts but to other area recording artists and producers.
Meanwhile, the clothing business, Chester Hill Clothiers, chugged along; Lopate was designing custom clothing for a range of artists and businessmen, including the clothing for 1996 presidential candidate Steven Forbes, whose manager wanted Lopate's clothing designs to downplay Forbes' wealthy background and instead portray the candidate as "someone who dressed himself at Macy's," says Lopate. But the twin career paths were wearing thin. "I was opening the clothing shop at 9 a.m. and closing it at 6, then running to the studio and staying there until 2 a.m.," he recalls. "I was fried."
Then it occurred to him that the disparity between the two businesses was not all that great. They were, he realized, downright similar. "Both clothing design and music are about making things that are highly personal by which you express yourself," he explains. Lopate closed the shop and moved the clothing design business into the recording studio. Customers of both sorts mingle in the huge media-equipped lobby, and it's increasingly common for one client to come for both clothing and music services. "More of my business now comes from the entertainment industry," he admits.
And don't think that the clothing side is any less high-tech than the studio: Lopate's designs are rendered on a computer program; design files are then sent by modem to a contractor in Paris who laser-cuts the material and hand-sews the garments, which are shipped back to Lopate within two weeks. "Both music and clothes are each powerful instruments," he says. "Why not combine them?" And of course, both businesses involve scrutinizing labels.
UP, UP AND AWAYLou Pearlman always wanted to be in the music business. As a teenager growing up in Flushing, Queens, N.Y., his band played the Long Island club circuit and occasionally got to open for major headline acts. The budding lead guitarist was also motivated by the success that his cousin and another Queens homeboy, Art Garfunkel, had been having with a writer/musician named Paul Simon.
But like most of those who pursue such dreams, Pearlman concluded after a few years that rock stardom would elude him. He reluctantly gave up the dream, went to college, got an accounting degree and pursued a law career before turning to another passion-aviation-by starting an air charter service. In the 1970s Pearlman saw some opportunities in charter aviation niches, such as the need by banks to get deposits from Long Island into Manhattan banks before a certain hour in the morning to gain a full day's interest on the money.
That ability to find small markets and serve them turned into what is essentially a private airline, Transcontinental Air, which now has more than 60 aircraft, from helicopters to a DC-10 to advertising blimps. During rock 'n' roll's heady days in the '70s and '80s, Transcontinental wound up transporting many of the major groups of the period. And it was one of those charters that gave Pearlman success beyond his wildest teenage dreams, not to mention an awfully nice recording studio.
"We were flying this group called New Kids on the Block," Pearlman recalls. "I had never heard of them, but someone from their organization told me how many records they had sold.
And I said to myself, 'I can do that.'" He proceeded to construct his own group of "kids," assembling, between 1992 and 1994, the Backstreet Boys, whose members were culled from scores of auditions in the Orlando, Fla., area, where Pearlman had set up Transcontinental Records. Launched in European markets on Jive Records in 1994, the adolescent heartthrobs have amassed 21 million in unit sales globally on just two albums, only one of which has been released in the U.S-it's sold 4 million units here and spawned the single "Everybody (Backstreet's Back)," which as of this writing remains on Billboard's Top 10 singles chart. Later, he did the same with 'N Sync, another group of teen idols who have found similar success.
It wasn't long before Pearlman realized that he could save considerable money and keep better control of the organization-which now has 11 acts in release or under development-by building his own studio complex. Transcontinental Studios opened officially in June of last year as a three-studio facility, featuring an 80-input SSL 9000J console with the first factory-installed 8-channel monitor matrix.
Pearlman says the synergy between the businesses is substantial. "We're flying people in the entertainment industry, so we leave studio brochures on the planes," he says. Transcontinental Studios also makes compilation tapes of its current and developing artists for in-flight listening, and Pearlman uses passenger comments as market research. "It's a captive audience-where they gonna go?" he laughs. But as with others who follow multiple career tracks, Pearlman also likes the diversity it adds to his personal life. "It really does help balance your life out," he says. "Every day is a different adventure."