NASHVILLE SKYLINE

Feb 1, 1999 12:00 PM, Dan Daley

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Mix Regional

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Nashville remains in the throes of a long-forecasted consolidation, which began with the announcement that Emerald Recording was in negotiations to purchase the assets of Masterfonics (which entered Chapter 11 bankruptcy protection in January 1998). That deal, which included debts listed on record totaling $2.9 million, including $1.5 million to a single bank, was expected to have been completed by the December 15 deadline imposed by the federal bankruptcy court. The acquisition would make the merged facility the largest such entity in Nashville, and one of the largest in the Southeast. Masterfonics has four studios, including the 5,500-square-foot The Tracking Room and former owner Glenn Meadows' mastering room, which will remain online. (Meadows, according to published reports, will have the opportunity to purchase up to 24% of the merged facility's stock over time; he remains as director of the studio's mastering operations.) Emerald has three studios, including a broadcast studio, at its Music Row location.

Meanwhile, Seventeen Grand Recording completed its purchase of the main studio at Love Shack Studios in mid-December. This was not a distress sale, inside sources emphasized. Rather, Love Shack owner Vern Dant wanted to cut back on his involvement in studio operations in order to focus on songwriting. The move gives Seventeen Grand, which now has two studios at its location on 17th Avenue with Neve VR and Euphonix CS3000 consoles, a less expensive overdub room that should keep more of projects' time and revenues within the studio. The sale included all of the equipment and the operating name, but did not include the real estate. Current studio manager Grant Fowler will remain in his position. Seventeen Grand co-owner Dave Cline says that there will be some changes to the equipment package, including the addition of some new digital processors, mic pre/EQs, microphones and new amps for the main monitors. The studio's headphone system also will be upgraded in mid-February with the addition of Formula Sound's active headphone mixing system.

All of the mergers and acquisitions on the table make business sense. In each case, it gives both the pursuer and the target new capabilities and services. In the case of Masterfonics, it presents Emerald owner Dale Moore with a very cost-effective way to expand his studio after waiting out much of the technological arms race that Nashville has experienced over the past three years, as several large facilities have come online.

However, while the mergers have been garnering the attention, other trends have been ongoing, the most notable of which is how studios have been developing ancillary revenue streams at a time when studio rental rates are under pressure. Several have made some of the more obvious moves, such as starting in-house music production companies and adding one-off services such as CD-R burning. But others have moved in ways that are more complex.

Emerald was one of the first to implement the service when they put in a radio broadcast division two years ago. Starting with artist radio tours via ISDN lines, the division has expanded, now accounting for a double-digit percentage of the facility's revenues, doing regular programming for Wal-Mart and other companies. General manager Milan Bogdan says Emerald is also considering adding video to the list of ancillary services. "This was definitely a response to the rate environment here that's been causing this consolidation," he says. "We had to take some of our eggs out of the music recording environment."

When mastering studio MasterMix opened its new facility last autumn, owner Hank Williams added Master-Vision, a DVD authoring service, in partnership with two other principals, Tracy Martinson and Mike Poston. Master-Vision was expected to bring in significant new revenue to the studios, particularly in light of a nonexclusive arrangement between Williams and his partners in the new venture and the BMG-owned Sonopress replication plant in Weaver-ville, N.C., which called for MasterVision to handle all of Sonopress's DVD authoring work.

Another move is in progress at Starstruck Studios. When the two-room/twin-SSL 9000 J facility opened two years ago, it made provisions for a small broadcast space in the rear of the building-to send satellite feeds of artist interviews to various broadcast outlets. Starting this month, Starstruck will embark on a significant expansion of that service, building three shooting areas complete with a television-grade lighting grid and a cyclorama backdrop. The service, Starstruck Broadcasting, will continue to use the same Mackie 32-bus console it had dedicated to the original broadcast operations, as well as an Otari timecode DAT and Tannoy 6.5 Limpet powered monitors. It also will continue using a fiber-optic feed supplied by Vyvx over Bell South lines, routing signals either to satellite feeds or directly to end users, which is how it has been supplying segments to infotainment TV tabloid Access Hollywood in Burbank, Calif.

Robert De La Garza, VP of Starstruck Studios and Broadcasting, stresses that the further development of the broadcast operations is in no way related to the fortunes of the recording studios, and he says that both the studios and the broadcast operations are doing well. However, Starstruck, like all of the other major new facilities that have opened in Nashville since 1995, has adjusted its rate structure to accommodate current realities.

Generating revenue from ancillary services has become a priority at Nashville studios. It is looked upon by some as the only way to stay afloat at a time when economic pressure continues to mount, as evidenced by the consolidation and facility shaking-out sweeping Nashville.






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