Should Recording Studios Advertise Their Rates? (And How Much Should They Charge?)

Adding Machine, Liscence via Creative CommonsOne of the most common questions I get from new studio owners is whether or not they should advertise their rates on their websites.

I’ve visited, worked at, and written about a lot of recording studios over the years and there seems to be no standard answer to this question. But in this issue of Scientist, I wanted to see if I could find one.

While I was at it, I also wanted to crunch the numbers to see if we could figure out how much studios should charge based on current market conditions. That’s popular question #2.

Should We Print Our Rates?

I’m of two minds about this question. My own preference as a consumer of studio time is “yes” – With a few “buts”.

When I’m shopping for a new space to bring a client to, I like to see rates printed on websites because it’s handy when I’m helping a client create potential budgets for a project.

Seeing a published rate also tells me that the studio owners have come to respect themselves and value what they have to offer. It says: “We know what we’re worth, and we know we can get it.” To me, that’s a good sign. It also telegraphs “We’re open for business. This is not a part-time clubhouse.

At least, these are the thoughts that go through my head when it comes to fairly average, mid-priced studios that are open to bookings from the public at large. I know that no studio likes to think of itself as “fairly average”, but let’s face it: Most are. That’s just math.

In cases when I see no rates published on a website, it can mean one of two things:

A) If I haven’t heard much buzz about the studio, I am led to imagine that the owners are instead thinking “OhEmGee, I sure hope we can get some clients!!! I wonder what they’ll be willing to pay!!

B) On the other hand, if I have heard a lot of buzz about the space, I’m inclined to imagine that the unlisted price will be a bit on the high side of things. That’s not necessarily a deal-breaker, but it’s good to know.

At least, those are my gut instincts, formed over a decade of working in studios for money. But are they right?

What are the norms?

To try and answer this question, we narrowed things down to take a closer look at all the recording rooms that have appeared in my Brooklyn Studio Tour series on SonicScoop.

I understand that Brooklyn is not representative of the entire world, but it is among the most varied and cosmopolitan places on planet earth. We may have developed an unfortunate reputation for being a bunch of homogenized plaid-wearers, but the truth is you’re likely to find more people here working on more genres of music, and at more divergent price points than perhaps anywhere else in the world.

Thanks to this, the studios in this series offer a good sample size of some of the best and busiest recording rooms across a multitude of price points and musical styles. And isolating this list to a single geographic area serves to create a stable point of comparison for other locations.

So what did we find? Out of the 29 studios in the series so far, 16 of them had publicly printed rates – a total of 55%.

At first glance, that might seem about as random as a coin flip. But if you look a bit closer, interesting trends emerge. Here’s the most notable one:

With few exceptions, the rates at the 13 studios that didn’t print their prices tended to be more expensive than the median, and the rates at the 16 studios that did print their rates tended to be more affordable than the median. That pretty much confirmed my hunch.

There were other related trends as well:

1. The studios that did not publish their rates tended to have client lists with more names that would be widely recognized by the average music fan.

2. The rooms with listed (and usually lower) rates had less wiggle room and did more short-term bookings of a few days at a time, and the ones with the unlisted (and usually higher) rates sometimes had a bit more pricing flexibility and did more long-term bookings, sometimes a few weeks at a time.

3. The studios with published rates tended to be owned and staffed by younger engineers. The average owner’s age at the studios with printed rates was easily under 40, and at studios with unprinted rates it was easily over 40. Whether this is due to generational preferences regarding transparency, or to economic factors, is up for debate. The real answer is probably “a bit of both.”

4. Although both groups worked on a large volume of self-financed productions, the studios with unprinted rates tended to do a higher percentage of work that was backed by labels, film studios, and other media firms.

What do they mean?

It makes a lot of sense: If your primary asset is affordability, lead with it. If your primary asset is track record, lead with that instead. And if your primary asset is gear, then I’m sorry, but you are screwed. I have never, ever, been in a truly busy recording studio where the primary asset was gear. Ever.

At any rate, people who are more interested in the face value of their dollar will look at price tags first, and shop based on those numbers and their current resources. Meanwhile, people who are interested in adding value to their project will look at past work first, and then figure out how much things cost and how to come up with the resources.

Both these options are equally valid for different people with different goals. If you want to build volume and clientele, then printing an attractive rate can be a great benefit. If the volume of business is already there, and you’re most interested in preserving reputation and perception of value, then forgoing the public rate card is a pretty common option.

But choose wisely. Because pretending to be in one camp when you’re really in the other will only work against you.

What we can’t judge

There was one factor however, that seemed to have little correlation to price or whether it was listed: busyness.

Part of that might have something to do with bias: For my articles, I tried to focus only on spaces that were known to be doing a healthy business and working on some interesting records. I’m proud to say that not a single one of them has gone out of business in the three years that I’ve been adding entries to it. Some of them have even upgraded, or expanded, or increased their rates.

But I’ll also admit that I was slightly more likely to include a particularly breathtaking or historic studio in the tour, even if it was a little less busy than the average for the series. Because of that bias, the “busyness” factor in this sample of studios may have tilted ever-so-slightly in the favor of the studios that had publicly listed their rates and therefore fell onto the more affordable side of the spectrum. But I wouldn’t read into that too far.

In my experience, you are likely to find the least busy studios at both extremes: The bottom-dollar Craigslist trolls on one end and the super-high-end mysterious megastudios that seem to land about one session every year on the other.

What are the average rates anyway?

At the studios that did list their prices with an engineer, the numbers ranged from a low of $400/day to a high of $825/day. The median price was $600/day, but a healthy number of busy little workshops brought the average price down a little bit lower, to $581.25. The most common prices found were $400, $600, and $650/day. Those figures popped up 3 times each.

As far as the studios with unlisted prices went, their base rates tended to be well above the high of $825/day we saw among studios with listed prices, with a few exceptions. At some of these places, you might expect to pay around $1,000 or $1500/day. And some studios in the Brooklyn and greater NYC area still command – and often get – $2,000 or even $3,000 daily.

When you’re getting a good value at these upper price ranges, the biggest factors are experience, taste, ears, connections, room and gear. And in that order.

I hope all of this talk of money isn’t too crass for some of you. But we’ve got to address it sometime, so we can put it to bed and just focus on doing great work.

Is your area different?

Logic suggests that Manhattan rates should be higher than Brooklyn rates, which should be higher than rates in Queens, which should be higher than rates in Philadelphia, which should be higher than rates in Kentucky. But a cursory look across different cities suggests that the averages might not vary quite as much as you’d expect. What varies instead is how much space and how many amenities you may get for the same dollar.

This is especially the case if you take some of the mega-priced Manhattan and L.A. studios out of the equation.

In Brooklyn, we saw a lot of busy music-focused studios charging anywhere from $500 to $800+/day. There were a few small rooms that focused on affordability that could be had for around $400 or $450/day. And the elite rooms, staffed by engineers whose work you’ve probably heard and enjoyed many times before, started closer to the $1,000+ range.

Most studio markets look a lot like that. In Chicago, if you take a look at a couple of spaces like Steve Albini’s Electrical Audio or John McEntire’s Soma Music Studios, you’ll find advertised rates that range from $500 – $800/day with an engineer, depending on the size of the room.

Those are some of the top music studios in the area, and stunning, classic records have been made in both. They’re cool, they’re busy, and they’re within reach for a lot of musicians who have sustainable careers. If they are a bit bigger or nicer than some comparably priced studios in Brooklyn or San Francisco, it’s not by a lot.

And remember, you won’t be getting Albini or McEntire to work on your session at those rates. If you factor in the rates for one of those “big name” producers and engineers, you’re likely to find that the overall costs are comparable to what you might pay for equivalent experience in much of Brooklyn or San Francisco.

If you look at much smaller markets like Philadelphia or Portland, you’re looking at rates that are maybe 10% or 20% lower. Maybe. Studio time that costs $600 with an engineer in Brooklyn or San Francisco might cost $500 in one of those markets. And instead of studio time that’s worth paying for bottoming out at a low around $400, it might be more like $350/day.

You might expect that the really great deals are hiding out in the boondocks, far from major metropolitan areas. There’s definitely some truth to that, but remember that well-equipped studios in these areas do a comparatively lower volume of projects. In turn, they can’t necessarily afford to offer rock-bottom prices and hope to keep their lights on unless they are supported by an inheritance or other outside income. What they can do is offer a whole lot more studio for rates similar to what you’d expect to pay at the midrange in a city.

Cheaper markets seem to allow more luxury and trappings for your buck. But they don’t necessarily reduce the minimum amount of buck you’re going to need by any huge amount.

How much should you charge?

Figuring out your rates is easy. If you are just starting up a new studio business, make a tally of all your expenses, both your tax-deductible commercial expenses, and the basic monthly salary you’ll need to pay yourself to stay alive. We’re talking rent, food, laundry, utilities, phone, average maintenance fees, health and studio insurance, long-term savings – everything.

Then, charge more than that.

Courtesy of Flickr User 401(k) 2013

"MATH!" Ta-da.

Okay, okay, fine, you want a real breakdown? Here goes:

Pick a rate that would exceed this combined total of personal and business expenses by at least 10% if you were only booked half the time. That’s 3.5 days out of every week, or 15 days a month for 140-150 billable hours a month.

If you think I’m setting the bar too low for you, then you’d be amazed by the number of recording studios that fail to consistently hit that target. This set of goal posts is actually a very aggressive and optimistic one. It is only advisable to those people for whom 60 and 70 hour workweeks sound like a dream come true.

A more traditional and conservative method is to choose a rate that would reach your “break even point” if you are billing just 25 hours a week, or 100 hours a month. By these more traditional measures, a very successful studio is one that manages to land an average of 40 hours of billing a week or more.

The reality is that in a business like this one, only the best of the best are actually going to work every day on production projects. And even they take a lot of breaks for career development and strategic recharging – as well as for lean times, which happen to even the best of businesses.

(If any of this sounds lazy and wasteful to you, then you’ve clearly never had a “real job”. At least studio people spend most of their working days “actually working”. If you happen to have a 9-5 office job, tell me: where are you reading this? Not at home? Thank you. I rest my case.)

Anyway, if you are able to reach 50% of “capacity” using my aggressive and optimistic figures, then a studio that books at very humble $450/day could afford to pay combined personal and commercial expenses of about $73,000/year with some built-in room for growth and upgrades.

This may sound like a ton of money to anyone who’s never run a business or earned a middle class salary before, but trust me, it’s not. If you draw up a realistic budget, you’ll find this is just enough to maintain an almost-but-not-quite-middle-class salary in a metropolitan area, as well as a small-but-serviceable studio with some potential for expansion in the future.

If you use the more traditional and conservative approach, a studio billing at $450/day would want to be responsible for supporting no more than $54,000/year in combined personal and commercial expenses. That could mean a comfortable living in Portland, Philadelphia or Houston, or the brink of poverty in New York or San Francisco or LA.

If you’re trying to break into a major market, your best bet for budgeting may be to go aggressive or go home. If you’re in a smaller market be realistic about your bookings potential, and be conservative in your budgeting. If you’re out in the boondocks, be very conservative about the amount of clients you’re likely to attract.

Raising rates:

Once you’re consistently booked to about 90% of your capacity and you are able to regularly reinvest some income into your business, then you can think about raising your rates or expanding your capabilities. You might also want to think about bringing in freelance engineers to either increase you to full capacity, or to help lighten your own personal workload.

If you’re ambitious, then lightening your load can allow you to focus more energy on long-term career development and to bagging bigger and more satisfying projects. If you’re more interested in enjoying the simple pleasures of life and family and sanity, then lightening your load with the help of freelancers can allow you to do just that.

In either case, enlisting outside help will allow you some of those “strategic breaks” we mentioned. Trust me, they’re useful. The rest of the world calls them “vacations.” To many musicians, they’re a novel concept.

If you’re struggling

If you’re having trouble getting booked to 50% capacity, then lower your advertised rates by 10%, or whatever your buffer is. If you still have trouble getting to 50% capacity, offer first-time clients deals that would lower those rates even further.

Also realize that you’re going to have to start doing a lot of things very differently. At this point, it’s not about rates, and I heartily recommend the George Costanza Strategy: Do the exact opposite of everything you would normally do.

But honestly, if you don’t have enough built-in clientele to hit the ground running at or close to 50% of your capacity, then your should not be opening a studio. Period. The studio world does not operate on an “if-you-build-it-they-will-come” basis.

If you’re independently wealthy, you don’t care about sustainability, and you just want to have somewhere cool to throw your money and your time, then rest assured that owning a studio is not as cool as it once was. In case you haven’t noticed, there are a jillion of them out there, and an unfortunate number are empty because they weren’t built on the backs of actual work.

If you want to do something new and different and sexy, try investing in music and humans and initiatives that will make media more profitable and more meaningful to people again. That’s where the opportunities and the exciting new frontiers are. Remember: recording studios are merely an offshoot of that great energy, and of the profitable new developments in those fields.

Justin Colletti is a producer/engineer, a journalist and a college professor. He records, mixes, masters, writes, and always sets aside some time to edit Trust Me, I’m a Scientist.

This entry was posted in All Stories, Featured Stories, Industry Trends, January 2013, Most Popular, Studio Tour. Bookmark the permalink. Both comments and trackbacks are currently closed.
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