At the beginning of this year the only professional audiotape manufacturer left in the world closed its doors. Quantegy had outlasted all of its competitors — there was no more EMTEC/BASF, 3M/Scotch, AGFA — but the loss of the videotape and cassette markets to the optical disc and the lowering cost of digital storage created a situation where it was hard for this once-huge company to keep its doors open.
Cello Studios, located for six years in the space that had once been (United) Western Recorders (and later part of Ocean Way) at 6000 Sunset Boulevard in Los Angeles, closed January 28th. This historic place was supposedly the birthplace of more hit records than any other studio in the world.
The Hit Factory in New York City announced February 2nd that they would close by the end of the month as well. This seven-room facility had hosted clients like U2, Stevie Wonder and Wu-Tang Clan.
What's going on?
The cost of setting up a studio has dropped drastically due to digital recording technology. We saw this start with the ADAT in 1991 and the development of the affordable Mackie consoles. How many small studios suddenly showed up wielding this equipment? Many. After ADAT, the DAW slowly crept up from being a two-track editor or MIDI sequencer to a full-blown tracking and mixing platform. As digital storage mediums have gotten cheaper and computers become faster the whole system started to take over from analog as the new way to record for both professionals and hobbyists.
Studio rates have been lowering over the last few years. Rooms in "big time" studios that used to command $1200 are easily found for $500 or less these days. Clients that used to spend four months in a professional studio on big-budget major label releases are apt to build their own studios or only book basic tracking or mixing time instead of booking these places for long-term projects.
The business model of "We have the technology needed to make records — you don't" is gone. This model allowed many studios to charge whatever prices they could. Hell, most of the time they were billing record labels directly — labels that were making plenty of money on a handful of artists that sold multiple millions of records. The labels now blame illegal downloading (wasn't it home taping in the eighties?) on the loss of their former profits. I'll blame cable, DVD, videogames, home computers, overpriced concerts, sports events and many other entertainment choices on the diverting of the consumer's entertainment capital. Plus, the revenue of making us repurchase our LP collections on CD has finally dried up as well.
We can also blame the lack of quality music coming from the big labels — who wants another shit-ass Britney clone or petulant actress-turned-singer who can't sing? Not many adults do. Of course, the labels have been trying to get the older demographic to repurchase their CD collection now as SA-CD, DVD-Audio or even 5.1 mixes. I don't think it's gonna happen in a big way though, and it looks like the budgets for these have been dwindling in many cases.
Anyway, back to where I was. These studios made the classic business mistake in thinking that the business climate would never change. Even as a small studio owner I've seen a change. Calls from brand new bands wanting to do quick demos to get gigs and write-ups in the local calendars don't come in anymore. They invariably do these initial recordings with a buddy who has some sort of small DAW system in a home studio. That's fine for a small studio like mine though. I've learned to keep busy by offering quality drum and basics tracking sessions to tape/then dumped to Pro Tools, by mixing a lot of home-recorded sessions for release and by teaching recording workshops to classes made up entirely of home recordists.