By Beverly Keel

APRIL 17, 2000:  While country music's sales woes have been grandly publicized, the resulting industry cutbacks have taken a quiet, if devastating, toll on Nashville's recording studios. Several studios have been forced to go out of business, while others have managed to survive by changing the way they do business.

In the early '90s, country sales skyrocketed, and labels found themselves flush with profits, allowing them to sign more acts and to spend as much as $250,000 to $400,000 to make a record. The recording studios flourished and began what insiders dubbed "an arms race," splurging on $900,000 consoles to maintain their competitive edge.

But by the mid-'90s, studio business began to slow down as labels reduced both their rosters and their budgets (to $100,000-$150,000 per record). That belt-tightening continued at an increasing speed: As the decade ended, Nashville studios found their country business off by 10 to 20 percent, while the industry faced the double-whammy of flat sales and record-label consolidation. To make matters worse, advances in recording technology allowed producers and singers to record vocals in the studio and then record overdubs in their own homes.

"Since 1995, the studio business has been getting slower and slower every year," says 16 Grand co-owner Jake Niceley. "Then it really hit rock bottom when all of the major consolidation happened last year." Although the entire music industry has downsized, only Nashville has suffered, he says. "This isn't an industry-wide phenomenon. I know studios in New York, L.A., Miami, Austin, and Atlanta are steaming ahead. It's mostly the decline in country music that has hurt us.

"It's starting to come back a little bit," he adds. "I can get a sense that there's a little more local work going on."

The studios that are thriving have expanded their services beyond traditional recording sessions and have started attracting business from film and television companies and ad agencies. This is the case with 16 Grand, while Emerald Entertainment's approach has been to evolve into a full-service facility that does everything from recording and mastering to promoting an album. For instance, the studio's corporate sponsorship division helps acts form partnerships with tour sponsors and helps publishers find commercial outlets for their copyrights. Its broadcast division allows acts to do interviews with radio stations across the country via satellite.

Emerald also began aggressively marketing to labels and acts in Los Angeles, New York, and London, as well as to ad agencies, cable networks, and film studios. The push has resulted in recent work from Coca Cola, Gatorade, and CNN, among others. Emerald even ventured into law enforcement when it began providing audio clarity for 911 emergency tapes.

Emerald chairman Dale Moore admits that he's had to battle the country-bumpkin stigma when talking business with people who have never visited Nashville. "It's amazing to see the look on people's faces when they walk into our studios for the first time," he says. "We were the first studios to start recording digital in the country. Nashville has always been on the cutting edge, but people envision us sitting around in overalls on hay bales with a tape machine in the corner."

In November, Emerald began offering free studio time to acts who'd agree to purchase a minimum of 200 CDs for $6 each. The acts reorder CDs from Emerald, which retains ownership of the masters but will sell them back to the act for $6,000. Moore considers the arrangement a win-win situation because it provides valuable hands-on time for the company's interns and second engineers, while the acts receive a high-quality CD that they can sell for $10 to $15 at their shows. Emerald's only requirement is that the acts must prove they've developed a following and have a reasonable chance at selling albums. "There are some hard costs associated with this," Moore says. "If we break even on this, we are happy."

Moore says only 60 percent of Emerald's overall income comes from its studios, and 70 percent of that comes from recording country music. "It's been Emerald's saving grace that we've had the other divisions," he says. "By having other divisions and services, we were able to weather the storm where some of our competitors weren't. They were totally dependent upon studio time, and if no studio time sells, you go under."

While producers have insisted upon upgrading to the latest equipment, it seems that customers aren't willing to pay for it. Most of Nashville's studio rates are equivalent to or less than what they were in 1985. When times got rough, many studios sliced their rates by as much as half just to keep the rooms booked, figuring that half was better than nothing. Combined with increased costs for new, expensive equipment, the trend proved to be disastrous. Companies such as Masterfonics, East Iris, 16th Avenue, and the Music Mill either had to close up or were purchased by larger companies.

Despite these setbacks, the major studios are optimistic about the future and are enjoying high studio occupancy rates these days. "I really don't subscribe to the gloom-and-doom theory of the recording industry in Nashville," says Jennifer Rose, general manager of the Sound Kitchen. "I know that it's extremely competitive, but my philosophy is that you are in competition with yourself. Everybody has gear and studios that are great; everybody has good staffs and great microphones."

The Sound Kitchen's mission is to be a full-service facility, Rose explains. "It's important that our studios are technically perfect, but it's just as important that we make sure everybody's lunch is taken care of." The Sound Kitchen's 27,000-square-foot facility has six studios, all of which were booked 27 out of 29 days in February. "We have a very broad base that allows us to keep these rooms full," she adds. "When there's a downtrend in one genre, another is coming up, like Christian music. A lot of Christian clients will pick up the slack."

Ocean Way's business is about 60 to 70 percent country music, although it has seen an influx of film and commercial work, says studio manager Sharon Corbitt. "I'm booked solid now through June, running seven days a week," she says. Ocean Way has benefited from its ISDN capabilities, which allow music to be transmitted over phone lines. For instance, vocals can be recorded here and tracked with an orchestra recorded in L.A. Recently, Tracy Lawrence launched his live album at Ocean Way by performing in the studio and having it broadcast live over the Internet.

"Nashville is all about family and people working together," Corbitt says. "We always land face up. I honestly believe that Nashville is going to be OK."

That's a sentiment virtually all people interviewed for this article agree upon. "We are already seeing our label business picking up," Moore says. "The smoke is clearing a little bit. Once they decide who will be on their rosters, they'll go back into the studio and start cutting again."

• Nashville Scene's Industry Archives
• Beverly Keel Archives