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Remixing a business Featured

12:58pm EDT May 31, 2002
It took Dave Bjornson about six months to realize that his employer, Audiomation, a recording studio on the North Side that at one time was considered one of the best in the region, wasn't going to make it with its existing business model.

The owners at that point, says Bjornson, who arrived Audiomation as a recording engineer, just weren't interested in going after anything beyond the typical fare of recording musicians. Bjornson seriously questioned how long the studio would be in business and how long he'd be able to hold onto his job there.

Owning a recording studio may seem like a bit of an adventure, spending all day with eccentric, edgy characters in creative overdrive, eating delivered pizza and working into the early morning hours to create a million-selling recording. The reality, it turns out, is quite a bit different.

A recent project at the studio gives a sense of the kind of work that the studios, renamed AAM Studios by the duo, is looking for these days. The Clarks, a popular Pittsburgh band that has enjoyed some national attention, were slated to record at there last month, but not for one of its CD releases.

The band has been recruited to do a recording for an upcoming ad campaign for Pittsburgh Brewing Co.'s I.C. Light brand. That kind of lucrative work usually slipped by Audiomation.

Comparing notes

It wasn't long after Patrick Boyle went to work at Audiomation that he and Bjornson began to stir up plans to launch a new studio or engineer a buyout of their employer. Both had been in the music business for years and understood what needed to be done to run a successful studio.

They agreed it wasn't happening at Audiomation.

"There's some misconception about what actually has to happen in a business like this to make it work," says Bjornson.

Some of those misconceptions led Audiomation, a studio that recorded a hit CD for Pittsburgh's Rusted Root, to a $60,000 loss in its last year of operation before Bjornson and Boyle acquired the business.

Limiting the business to recording bands was a low-margin proposition because all too often, as Bjornson puts it, "You're basically trying to pull money out of people who don't have it. We knew we were going to have to come up with some alternative revenue sources, people who have the ability to pay."

Boyle and Bjornson realized they would have to structure the business substantially differently to make it successful. They wanted to continue to do the kind of recording the studio had traditionally done, but knew they needed to create additional revenue streams and cut costs to reverse the money-losing trend and turn it into a profitable enterprise.

One potential source of income was voice-over work for commercials and other projects, jobs that Audiomation had referred to other studios. Another was location work, recording events outside the studio.

Advances in recording technology aimed at the home studio market have created a new dynamic for commercial studios. Musicians can now make relatively modest investments in recording gear and produce high-quality recordings in home studios.

Still, commercial studios can offer an even higher level of expertise and sophistication, adding the polish that will improve even the best home studio recording. But instead of finding ways to work with the growing cadre of musicians recording in home studios, such as renting equipment and offering post-production enhancements, for instance, Audiomation's owners, say Boyle and Bjornson, viewed them strictly as competitors.

Studio records, says Bjornson, revealed that equipment breakdowns often stretched sessions past their allotted time. The time wasn't charged to the client, but it made projects lag behind and tied up facilities and technician time that could have been put to work on other projects.

And even though clients weren't charged for the time, Boyle says delays and interruptions created frustration and made for a less than satisfying experience in the studio.

"It's their time and money, and they want a smooth experience," says Boyle.

So it was clear to the pair the business would have to be re-engineered if it were to succeed.

"It became very important for us, before we even signed on the dotted line, to formulate a different business from the ground up," says Bjornson.

Bjornson and Boyle sensed the previous owners were ready to get out and discussed buying the business. They spent weeks reading about formulating business plans, sought the advice of some of Boyle's family members who had successful business experience and got counseling from the Service Corps of Retired Executives.

The two put together a plan they believed would have the studio breaking even in 18 months, made an offer to Audiomation's owners and acquired the business in March 2000.

They cut expenses by paring staff. They put in place a rigorous equipment maintenance schedule to reduce the number of breakdowns, and they began identifying potential new revenue streams. They decided to go after work that Audiomation had turned down in the past, like voiceover work for ad agency clients.

They got an early break when they got the job -- through the Pittsburgh Film Office -- to mix the soundtrack of "The Temptations," the movie about the Motown vocal group that was filmed in Pittsburgh. They've recorded performances by the Pittsburgh Quantum Theater, a group that performs in urban spaces. And Boyle took the lead on producing a documentary film commissioned by the Westmoreland Museum of Art.

AAM Studios agreed to host a high school music class field trip to the studio, and afterward, Boyle and Bjornson began developing a program that would provide hands-on experience in the studio for students. The school's jazz band came to the studio and recorded music for a state competition, and took first place in the contest.

Boyle and Bjornson decided to create a curriculum that would allow students from a variety of interest areas to create a recording, applying their talents to contribute to the project. Student musicians would make the recording, while others could participate in the engineering. Others could create artwork and text for the CD jacket and participate in the duplication process. The final product could be sold to underwrite the costs.

The idea has blossomed, and AAM Studios this fall will begin to bring in high school classes to engage in recording projects. Boyle and Bjornson estimate that the venture could bring in an additional $60,000 to $100,000 in revenue for the business.

To cast a wider net for both clients and seasoned help in the studio, Bjornson teaches a class at Pitt in studio engineering, an elective that attracts students interested in recording technology and provides a source for interns at AAM Studios.

Boyle and Bjornson say the studio reached the break-even point after three months, well ahead of projections. Much of that success, they contend, came as a result of a realistic business plan and a commitment to serve their new class of clients as well as the more traditional base of bands and musicians who record at the studio.

Clients such as ad agencies and nonprofits weren't likely to be as forgiving as the musicians Audiomation had typically catered to, and a commitment to customer service, they realized, wasn't unlike what was expected in any other kind of business.

Says Bjornson: "Our target market was going to want things the day we said we were going to deliver." How to reach: AAM Studios, www.aamstudios.com