Hypothetical money situation [need advice from everyone]

Discussion in 'Mixing & Song Critique' started by Idezz, Apr 6, 2004.

  1. Idezz

    Idezz Guest


    Okay. Say someone owns a studio, and happens to not be making much money at the time, recording and producing. Sessions are few and far between. Say the owner is in debt, and any money he earns is already spent due to this.

    Say another producer/engineer/musician comes in and starts working at the studio, [not as an employee, but under the table]. The owner realises he's rad, and wants him to bring in his own clients, start making some money, and start a scene around the studio, get it happening again.

    1. Should the owner insist on making a 67 percent profit on the acts the other guy brings in, his leverage being that he owns the studio, and for whatever else a reason?
    2. Should the producer/engineer/musician get a profit of 60 percent, to make it worthwhile for himself, for bringing the studio business, [much] advertisement, and the like? 40 pecent to the owner for use of the studio, to supplement the owners income, and as a *huge* heartfelt thanks.

    any advice all around the board would be great.
  2. maintiger

    maintiger Well-Known Member

    Dec 3, 2003
    Whittier, California, USA
    I'd say that negotiations between the studio owner and the engineer are needed to come up with an amount fair to everybody-The studio owner has the last say as to how much he will pay but the engineer has the last say as to the clients he will bring- if they don't agree, no deal- let the engineer look for another studio if what the owner offers is not worth it to him-
  3. sdevino

    sdevino Active Member

    Mar 31, 2002
    Most "owners" would give the producer a fixed, reduced rate, and let the producer charge what ever they think they are worth. The owner is entitled to the steady business and cash flow opportunity. The producer is entitled to what ever extra his or her talent is worth to the market.

    If the producer were really being fair he or she would return a percentage to the owner for what ever is over the standard rate.

    Example: If my rate is $100/hr.
    I agree to let fuzz-eyed 2step world famous producer use the room for $70/hr as long as:
    a. the producer provides all the engineering labor
    b. payment is in advance for reasonable chunks
    c. the producer accepts financial liability for the gear that is broken due to misshandling.

    The producer can then make $30/hr at status quo pricing for the studio. The producer can choose to provide a discount as an incentive without impacting the owner. And the producer can make even more money if he or she can get $120 or $140 per hour for the room.

  4. slicraider

    slicraider Guest


    I am not sure why you would want to mix your finances in this way. As a producer/engineer I charge the artists for my services. I also at the same time have a few studios I feel help me to be my most creative. These studios know my clients are not working with much of a budget but represent far more than a one day booking so they in turn offer a rate that gets the session in while still feeling comfortable with the fee.

    Now if this guy is attracting a lot of work and bringing your books back in the black it would bode well to even tailor the room to his work habits. Maybe it's a piece of gear or maybe it's the 3 foot lava lamp but whatever keeps the money flowing is worth investing in.
  5. Thomas W. Bethel

    Thomas W. Bethel Distinguished Member

    Dec 12, 2001
    Oberlin, OH
    Home Page:
    I got a call the other day from a potential client. He told me he had some work to do and wanted me to charge him at the rate of $35.00 per hour for doing that work and that I would then give him back 45% of what I charged him. I thanked him for his time and told him very basically that this was not our normal rate for mastering and that I was not going to pay him 45% of our hourly rate he set for the privilege of working with him. I hung up. About 10 minutes later he called back and wanted to know when the sessions could be scheduled? I again informed him of our policies and hung up. About 20 minutes later he again called and told me that since it was our first time working together he would only request a 35% give back. I again reiterated our policies and pricing. He got somewhat upset and told me that he works this deal with a lot of recording studios in this area and has never gotten anyone to refuse his offer. He also told me that I would be losing out on "lots of business" since he would be bringing me not only his projects but ones from other musicians. I again thanked him for his time and hung up. I have not heard from him since. I am not sure what he though he was offering me but it was no "deal" from my standpoint

  6. maintiger

    maintiger Well-Known Member

    Dec 3, 2003
    Whittier, California, USA
    looks like he wanted to offer your mastering to his clients for $35 an hour and then get 45% from you for his time- who know, there are some real cooks out there!
  7. realdynamix

    realdynamix Well-Known Member

    Feb 23, 2001
    :?: I'm just wondering what that rate really is? The owner has overhead, maintenance, utilities, liability etc. When you think about and add in the deductible of operating an establishment the owner does have offsets in his favor.

    The under the table activity won't allow the indie producer to reap these benefits, unless it's 1099'd (self-employed) or he forms his own firm, and if his clients are in business they should benefit also.

    By the very nature of the non-existence of this exchange, the producer whiz guy and his clients will always be way ahead of the game. So why doesn't the indie negotiate a good bulk use rate, form a real indie company and book the time adding his specialty mark-up with his clients? If he is a great producer, his clients should not have a problem paying what he's worth, the studio keeps busy, and everyone is happy. Renegotiations can be done based on which way the pendulum swings.

    Just my point of view,

  8. cruisemates

    cruisemates Active Member

    Jan 28, 2004
    Home Page:
    As a business person now, and in the past both a studio owner and a free-lance engineer I have a few thoughts.

    As a business-owner, especially if the business is not doing that well, it is hard to say no to any income. Having the studio get "hot" would be a real boon to the studio owner and it would mean residual business at full rate just from word of mouth. An empty studio is a money loser because of overhead.

    If the producer is willing to do all the client handling and engineering, and if he is trustworthy and respectful of equipment, etc, then I would work with him. Part of the deal would be that he takes down-time (nights, Mondays, whatever). I worked for a studio that had a "producer's rate" and he did well with it.

    On the other hand, the guy in the original post sounds a little pushy. If every studio in town does his deal why is he so adamant when this owner refuses? He supposedly has other options. Some people will just be bad for your business and aren't worth dealing with.

    Finally, in the real world, outside of mega-buck record company recordings it is rare to find clients willing to pay full studio rate and a producer's fee on top of that. Just ain't that common cuz most bands are not independently wealthy.

    My answer? It depends on what this independent is like to work with. If he is trustworthy and low maintenance I would go for it, but if not there is a good chance he is more trouble than the reduced rate he is willing to pay. He might even stiff you in the end.
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