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studio usage numbers

Discussion in 'Studio Lounge' started by jonno123, Jun 29, 2009.

  1. jonno123

    jonno123 Guest

    Hi, new to the forum. I've searched the first 10 pages and can't find the answer to a couple of questions.;

    1 - what % of occupancy does an average studio need to be booked to break even [eg genrally for hotels it is around 65%]

    2 - studio industy decline in useage % over the past 5/10 years.

    It just seems its much harder to find out figures about this industry that many others. I need this info as I'm looking into setting up a studio and want to do my research properly.

    many thanks for your help.

    J
     
  2. MadMax

    MadMax Well-Known Member

    J,

    With the wide range of investment dollars that is being put into studios, what your asking for is a seriously hard moving target to find, much less accurately hit.

    You really need to take your capital investment and amoratize it across what you and your accountant feel is appropriate. Then try to calculate your monthly on going operating expenses.

    That should essentially give your a close number for your hourly or daily rate. Once you have that, you can figure out what your target occupancy rate would be.
     
  3. jonno123

    jonno123 Guest

    thanks

    thanks for the reply Max,

    We have to do it that way anyway, i just wondered if there were any broad figures available that once we'd reached our own conclusions we could cross ref with.

    Like I said, in lots of other industries these figures are readily available,

    Cheers

    J
     
  4. MadMax

    MadMax Well-Known Member

    Yeah... I hear ya. I looked for the same thing... and still look every now and then... but to no avail.

    I think AES or one of the wings may have those, but I'm pretty sure those will only be accurate for the majors. Once you get to the indy level, there no hard associations that are doing any stats or reporting.

    It would be nice to know what the averages are, for sure. But I seriously doubt that they'll ever be accurate, even if they were available... again, because so many "studios" aren't really studios operating on a full time basis and are either hobbyist or are privately owned/operated for the owner and "friends".
     
  5. Thomas W. Bethel

    Thomas W. Bethel Well-Known Member

    The short answer is "it depends"

    There is no magic number.

    You have to add up all your expenses on one side of the ledger and all your income on the other side and figure out how many hours per week at a given hourly fee you need to book in order to break even and then you need to figure out how many additional hours you need to make a profit.

    I assume you are doing a business plan.

    When I started into business I did what I am suggesting you do. The first year I had to make a lot of changes in my plan due to the fact that I was not booked as much as I estimated I would be. Unless you have a built in client base you are going to have to get clients to come to your studio and pay you to do their recording and that is not easy in this economy and with more and more people deciding to go it on their own and do their own recording.

    The job I worked before starting my own studio provided me with many leads and potential clients so I was already booked for a number of jobs before I ever opened my doors. That was good for me and for my bottom line.

    When I started 14 years ago I was the only professional mastering studio in this geographical area. Today many recording studios offer "mastering" as part of their services and there are more and more on line mastering places that offer their services to the general public for rates that I cannot compete with. I have continued to diversify and we now do more video production than we do audio mastering. We are now doing audio and video recording of concerts, audio and video restoration and transfers, audio mastering, radio production, commercial production and voice over recordings. I have four students working for me now which is something I never foresaw when I started this business. Lots of things have changed in the 14 years and we start our 15th year July 1.

    I would suggest that you look hard at the market you are in and find out what other studios are doing and then either try to fill a niche that no one else is filling or give better service for a more reasonable rate than other studios or plan from the beginning to be able to diversify as the clients needs change.

    My mentor gave me some good advice early on. Here it is...Stay lean, don't invest heavily in technology that will be changing or obsolete by the time you pay it off. Worry more about the content of what you are doing than the media you are doing it on. If something is not working or becomes a money losing area of your business stop doing it and find something else that will make you money. Always be ahead of the pack when it come to new ideas and technology but don't get yourself in to a position where the technology is more important than the clients you serve. Always remember that people are coming to you for what you can do and not for how much equipment you have laying about. Most clients assume you have enough equipment to get the job done and really don't want to know how much you have spent in equipment or that you have the latest <insert name of expensive audio equipment>. What they really care about is getting their project done on time and on budget and making sure it will sound good.

    Best of luck! Let us know how things are progressing....
     
  6. RemyRAD

    RemyRAD Guest

    I've never made back my initial investment in my CROW (control room on wheels). However, after nearly 20 years, I am reinventing my truck & my business concepts. I'm not a studio and I'm not just for live recordings. I'm actually installing high-speed numerous 10-bay DVD/CD duplicators where the Ampex MM 1200 used to reside. So my CROW (creative replication on wheels) can actually serve the same or two different functions. Also thinking about putting in a Chroma Green Screen into the combo room to do stupid Chroma-Key, pitch corrected, karaoke. I'm putting a generator on board so that I can be completely self-contained. 5 kW to 6.5 kW should do me just fine. It's insanity. Its passion. It's love for the arts and art for your love. You do it because you have to do it. So if at first you don't succeed? Just keep trying the same dumb thing over and over again. You'll never learn will you? Will you! Of course not. You're not supposed to.

    As the CROW flies
    Ms. Remy Ann David
     
  7. Genereaux

    Genereaux Active Member

    I don't know if you should knock yourself out trying to find this number. The hotel industry is huge lumbering beast with a history long enough to give plenty of time to invent such arbitrary nonsense to distract investors and swamp bookkeepers with 'busy work'.
    Percentage is relevant, but think about it; does 65% REALLY do the same thing to a just built 500 room Ritz-Carlton as it would for an 80 room, 20 year old Best Western?

    Your own numbers will prove FAR more useful to you and the studios longevity.
    Starting with the hardest of expenses and working to the softest will determine the monthly 'nut'. After factoring in rent, utilities, payroll, marketing, coffee creamer etc and breaking down your gear investment- THAT number is the only one to be concerned with.

    This number may prove more useful, but only after you've specified the question. Are you doing commercials? Mastering? Video Post? Rehearsals?
    Studios are all trying evolve to broaden their services to compensate for the decline in usage, so that percentage needs to be specific to studios offering similar services to yours. Quite simply, if you're a commercial house, then a 70%(random made-up number) drop in band tracking rooms over 5 years is irrelevant to you.
    Let alone, variances from market to market.

    In short, these numbers may work well to fluff out the business plan, but aside from that would provide you with little 'real' or usable information.

    But if you REALLY have to have them, you may need to resort to identifying the studios closest to your model (read: competition) and asking them.


    sean
     
  8. Thomas W. Bethel

    Thomas W. Bethel Well-Known Member

    And most studios are NOT going to give you THEIR numbers. No one wants others to know how their business is going in real numbers unless they are a publicly-traded company and have to publish an annual report. The surveys that you are asking about don't publish the names and the exact figures of a particular business but instead give percentages of lots of businesses.

    FWIW and YMMV
     
  9. Genereaux

    Genereaux Active Member

    ^^EXACTLY^^
     

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