Record Studios Face the Music

Back in the 1970s, it was not uncommon for a rock band making an album at the Village Recorder in West Los Angeles to be treated to free champagne and a catered meal at the start and finish of a recording session.

“We even used to pick up their hotel bills and rent-a-cars, which is totally out of the question now,” said studio manager Nick Smerigan.

Nowadays, the bands get cookies and soft drinks, and the cost is added directly to their bill, Smerigan said.

These are tough times for the recording studio business in Los Angeles. Beset by skyrocketing equipment costs, tighter budgets from record companies making fewer albums, the advent of computerized music and competition from hundreds of studios in the homes of rock stars and producers, professional studio operators say they are struggling for profitability in the 1980s.

“We used to average 22% net profit after taxes; now we average 10% if we’re lucky, and we’re happy to get that,” said Chris Stone, the founder and owner of the Record Plant, once a favorite of such 1970s superstars as the Eagles, Stevie Wonder, Chicago and Fleetwood Mac.

Dramatic Increase

“I have a masters in marketing from UCLA, and this business is all that they taught you to avoid,” Stone said. “It’s high risk, high cost of entry, high intrigue, ridiculous obsolescence--most of it planned--a totally fickle client base and an elasticity of demand that’s dead set against you. Anyone who goes into the recording studio business is crazy.”

Judging from the number of studios that have sprung up in recent years, there are a lot of crazy people in Los Angeles. According to Ellis Sorkin, owner of Studio Referral Service, there are 600 to 800 recording studios in the Los Angeles area.

“Of that number, only 125 to 175 are real solid professional studios,” said Sorkin, who started his referral business in 1980 in response to the confusing proliferation of studios. “Still, in 1979, there were probably about 50 to 60 professional studios in town, and in 1969 there were only 15.”

“I think Los Angeles is the recording capital of the world right now--at least there are more studios here than anywhere else on the planet,” said Paul Camarata, who runs Sunset Sound, the studio founded by his father, Tutti, in 1958--which makes it the oldest independently operated studio in the city. “I also think there’s more recording going on now than ever before; it’s just that it’s spread out over more studios.”

The glut of studios has forced down rates by as much as 30% from 10 years ago, studio operators say. At the same time, the cost of equipment has gone up 300% to 400%. The price of a state-of-the-art mixing console--the most expensive piece of equipment in a studio--has risen to as much as $500,000 from about $80,000 a decade ago.

“We used to get $205 an hour and now we get $145,” said Dee Robb, co-owner of Cherokee Recording Studio along with his brothers, Bruce and Joe, and their father, David. “We put a million dollars into the complex last year, and it hasn’t bought us a dollar in rates.”

What’s more, constant innovations in sound technology have produced what one veteran sound engineer calls “an equipment race.”

Blames Standardization

“Every week there’s something; I have to buy some new piece of equipment at a minimum once a month,” said Victor Levine, manager of Amigo Studios in Glendale. “Right now, our goal is to just break even and stay abreast of technology.”

“The problem is, people aren’t willing to pay for the equipment you have to buy in order to keep bringing them into your studio,” Village Recorder’s Smerigan said. “Price-wise, it’s very difficult to increase your room rate to offset the cost of the equipment.”

Dee Robb traces the current crunch to the mid-1970s, when electronics manufacturers revolutionized the business by starting to mass-produce and standardize professional recording equipment. “Before that, each studio had its own system custom built in-house, all tailor-designed for the individual operation.”

As a result of standardization, “a lot of people got into the business who normally wouldn’t have because you could literally go to the store and pick one of these and one of those and, boom, you had a studio,” he said.

“This is one of the few businesses where you can buy credibility if you have the money. The problem is that so many operations come on line backed by external funding. People want to get in for the glamour, and they walk in with wads of money, buy top-of-the-line equipment, cut rates down to where they’re losing money, then sell the studio to someone else who comes in and does the same thing. Most people in the studio business never make a profit, and we have to compete with this price structure. It’s unrealistic competition.”

A number of once successful big-name studios have gone out of business in recent years, including Shangri La in Malibu, once Elvis Presley’s beach house and later owned by the Band; Wally Heider Studios, which pioneered the remote recording of live concerts, and Gold Star Studios, perhaps the most famous of all, where legendary producer Phil Spector turned out a string of 21 hit records in the 1960s and 1970s using his “wall of sound” style.

“It became a button business rather than creative business,” said Stan Ross, who owned Gold Star with his partner, David Gold. “Everybody wanted to mix records with a computer. I said, ‘Hey, that’s my job; I’m a mixer. You want a computer, I got one here in my arm; it’s produced 100 hit records over the years.’ ”

More In-Home Studios

“It got to the point where we were putting all the money we made back into new gear. It became ulcer time, and we weren’t having fun doing it anymore,” said Ross, who sold the studio at Santa Monica Boulevard and Vine Street to a developer in 1984. It’s now a shopping complex.

“Everything has gone to electronics,” said Wally Heider, now retired. “You don’t have a 60-piece orchestra doing a movie score anymore; now it’s five guys with keyboards and maybe one live drummer doing the whole thing in a small room.”

Heider attributes much of the industry’s current problems to the hundreds of in-home studios that have sprung up in recent years. “Every rock star who gets a hit, the first thing his accountant says to him is, ‘Build one in your own home, keep the money and record whenever you roll out of bed.’ ”

Millions for Renovation

Although home studios rarely turn out finished, commercial-quality records, they compete against the larger professional operations by siphoning off recording time, which is really what a studio sells.

“They are taking the over-dub time--where they put on guitars, background vocals, add percussion and anything that colors the record,” said Village Recorder’s Smerigan. “That’s where we’re getting killed. It’s a matter of dollars and cents. Instead of coming here and paying our rates, the artists are working at home and billing the record company $500 a day for the use of their own room. I’ve actually lost (recording) projects to so-and-so’s house.”

“Every client I have has his own studio,” said Terry Williams, co-owner of Lion Share Studio, which was built 10 years ago by singer Kenny Rogers. Williams is not among those singing the blues, however. Although he admits that “it’s very tough going right now and profit margins are not substantial,” Williams claims that business is booming. “In the last eight years, we’ve had maybe 15 hours of down time,” he said.

“I really don’t know why we’ve been so successful; we don’t advertise,” Williams said. One thing Lion Share does is target a “very exclusive, upper-echelon clientele, only people with major record company contracts, like Barbra Streisand and Kenny Loggins,” he said.

Such customers are attracted not only by the recording equipment at Lion Share, which Williams describes as “at the cutting edge of technology,” but also the decor that features “wall-to-wall beveled mirrors, brass and marble--it’s pretty uptown,” according to Williams.

“Streisand enjoys being seen here,” he said. “We can accommodate entourages, managers, whatever. It’s a dance--the equipment is the same, and there are so many fine studios that you have to outdance the other guy.”

Charles Comelli, who manages the Capitol Recording Studio, owned by Capitol Records, sees good times ahead as well, as more and more artists begin to turn away from the novelty of home recording and synthesized music.

“We’ve had to salvage a lot of projects done at these home studios,” he said. “People who have no business being in this business have bought equipment and put themselves into a financial bind, and we’re having to redo entire projects for them.”

Demand for Privacy

Over the past 2 1/2 years, A&M; Records has poured an estimated $5 million to $10 million into renovating its recording studio on the site of the old Charlie Chaplin movie studio in Hollywood.

The result is the most elaborately outfitted and decorated studio in town--and, at $200 an hour, one of the most expensive. The studio, which has a full-time staff of 40, has been “booked solid” by such artists as Bruce Springsteen, Don Henley and the Irish rock group U2, according to a company spokesman.

A&M; Recording Studio is actually operated as a partnership between the record company and producer Jimmy Iovine and sound engineer Shelly Yakus, who have designed and directed the recent renovations. One innovation the two have developed is a transmitter that allows a record-in-progress to be broadcast from the studio to the radio of a car.

The idea, Yakus explains, is to allow the artist and producer to listen to the “mix” of a recording the same way that most potential customers will hear it for the first time--on the radio in a car stuck in traffic.

“The car will have a phone so the producer can call us at the studio and have us alter the sound the way he wants it,” Yakus said. The two men are shopping for the right car to outfit, said Iovine. “We’re thinking ’57 Chevy, the ultimate rock ‘n’ roll car.”

Mike Hoffman keeps his recording studio, Indigo Ranch, “booked three months in advance” by offering clients another kind of gimmick. Built in 1974 by Michael Pinder, one of the founding members of the Moody Blues, Indigo is situated on 68 acres in Malibu.

“Because of that, we attract a specific clientele--artists who like being out in nature, who demand privacy and don’t need a McDonald’s or liquor store within walking distance,” Hoffman said. Indigo clients have included such local Malibu residents as Olivia Newton-John, Neil Diamond and Neil Young, plus “a lot of groups from Europe and Japan,” Hoffman said.