Studios Caught In Label Crunch

In a market that has apparently deteriorated during the past year, a number of studios are complaining that labels are putting more downward pressure on rates than ever before.

What's more, some studios claim they are now pressured to reduce rates even after services have been rendered; in other cases, studios complain of delayed payments from the labels.

The issue was aired in heated fashion at the Jan. 29 meeting of the New York chapter of the Society of Professional Audio Recording Services (SPARS). Among the invitees were two New York-based A&R executives.

Doug Levine of Masterdisk, a New York mastering facility, described the current environment.

"What we get now that we've never had before is, after we finish a project, someone calls saying, 'That's over our budget.' They've already spent the time, it's right off a rate card, and now they want a break after the fact.

"Sometimes, it's implied that if we don't give the break, we may not see that client again," Levine continued. "I don't feel like I have a tremendous amount of leverage, and it's very uncomfortable getting and fielding those calls."

A show of hands indicated that at least half of the approximately 35 attendees of the Jan. 29 meeting have had similar experiences.

With commercial recording studios already losing business to inexpensive digital audio workstation-based recording, SPARS managing director Paul Gallo warned studio owners that they need to better articulate the value of a professional studio to record labels, their primary client base.

"We must carry the message to an industry that the most expensive recording is a bad recording," Gallo said.

As reported last week in Billboard, major and independent labels have been curbing studio time and limiting the number of tracks on many artists' albums, mainly to save money.

'INFURIATING' LABEL PRACTICES

But while studio owners and the two A&R executives in attendance made suggestions as to how they could improve their working relationship, for many in the former group the meeting became a forum for expressing pent-up frustration. Polite discussion yielded to anger and resignation as attendees complained about label practices.

Studio executives contacted by Billboard after the meeting reiterated the concerns.

"I'm finding that half of my day is spent calling and chasing down record and production companies," said Sound on Sound Recording's David Amlen, who attended the meeting.

"Everybody's screening their calls, they won't take calls," Amlen says. "It is so infuriating. They have made my life unpleasant professionally, because I'm the [expletive] that has to call and be persistent, and I don't like that."

At the meeting, Arista Associated Labels VP of A&R Larry Hamby and Virgin Records VP of A&R administration Michelle Ryang acknowledged the unfairness of theses types of situations, but they also cited the intense pressures they too must contend with and the complexities of large corporations.

"Because the record industry is in such a state in terms of cash flow, there are all sorts of things that happen above the label level for them to control cash flow," Ryang said. "This goes for everything from getting [artists] signed to checks getting cut. More and more people have to approve more and more things, and there are less and less people. That's not an excuse; it's a problem. But not getting paid—I can't speak to that."

Hamby recommended that studio owners fortify relationships with label personnel to maintain lines of communication.

"You do want to have an advocate at the label who's your friend and will help," he suggested. "I've wanted to return to places I've worked at before just because of the relationship. A personal relationship might help through this bureaucracy."

LACK OF ORGANIZATION

The SPARS meeting made clear that a contracting industry and smaller recording budgets have caused friction between studios and labels. But a changing A&R culture and production methodologies are seen as further damaging studio-label relations.

"In the old days, record companies owned studios," Ryang said in a subsequent interview. "Record companies had producers on staff, and record companies were in total control of every aspect. It was different."

Projects involving multiple producers are more common today, resulting in little to no organization or oversight, some studio personnel complained.

"When you have 10 producers working on a record and the level of organization is nonexistent, it's extremely difficult to get money upfront," said Robbie Norris, operations manager at Quad Recording, in response to a suggestion that studios demand a 50% deposit prior to sessions.

"So much time is wasted on lack of organization, from the record label all the way down to the artist, and the studios are being asked to make up the difference," Norris said. "It's impossible. We can't do it anymore."

Expanding on comments made at the SPARS meeting, Hamby told Billboard that today's labels put a "premium" on the talent-scout aspect of A&R, rather than the ability to manage the recording process.

"There are plenty of [A&R] people that know what they're doing," Hamby said. "But when somebody says to me that a project is in the studio and nobody's supervising it, it blows my mind. It makes no sense."

Gallo observed, "The lack of organization seems to be more and more rampant. Of course, you've had record labels moving, changing, being bought and sold. [Studios] have got to do something to supplement their lack of organization, [whether] that means paying attention to details of billing and other situations more so than you ever did before, or, as mentioned earlier, making sure there is somebody at that label that you have a personal relationship with."

The atmosphere at the New York SPARS meeting is being felt elsewhere.

"I think a lot of A&R people are just not in the loop," said Jane Scobie of Royaltone Studios in North Hollywood, Calif.

Scobie has not experienced as many rate and payment disputes as her New York counterparts but nonetheless criticized the labels' practices. "I don't think it's fair . . . especially when [labels] are asking us to give them cheaper deals. I think labels' attitude is, if they're going to crunch figures, the studio is the first place they go."

In Nashville, David Biondolillo of Sound Stage Studios concurs that there is significant pressure on rates. "We've gotten some e-mails and whatnot saying that labels will only pay so much, and anything over that they just won't pay for.

"Nashville is such a close-knit community that it tends not to get [contentious]," Biondolillo adds. "It's more a 'let's-work-this-out' kind of thing. But we're starting to see it, and it has been a bone of contention here. In this day and age, you suck it up. You take what you can get."

One consequence of allegedly long-overdue invoices will be significantly tougher credit policies, some SPARS members pledged.

Regardless, they fear, it may be too little, too late for some long-established studios.

"Unless there's a tsunami of business in the next six weeks," Norris said, "I think you're going to see historic amounts of people going away and never coming back."

Amlen agrees. "You're going to find a lot of people go this year. I think this will be the year that the weeds die."