'How's he going to manage both businesses? If he ends up spending 15 hours a day with this new venture, Tommy Boy Records will suffer -- and Sanctuary needs for Tommy Boy to stay healthy.'
Financier; chief executive officer of C.N.R. Enterprises Inc., in New York City, formerly bank lending officer specializing in the entertainment industry
Silverman is wise to try building on his industry experience. The transition from record making to a studio makes sense. It's not like he's going from making shoes to making women's apparel.
My main concern when I put my banker hat on is that he doesn't seem to have projected for the unexpected. His construction costs, for example, have run way over budget. The cost overruns forced him to seek additional short-term financing. But my sense is that short-term solutions won't work. He should be looking for long-term financing.
One area in which I think he's especially exposed is receivables. In my experience, 9 out of 10 people in this type of business don't understand the cash-conversion cycle. He can't just do his billing and expect to see a check in a couple of days. His numbers seem good, but to me they look like a best-case scenario. Why? Because even an established record company can drag you out for 30 to 60 days. I'm not sure that he can afford that. All he needs is one major company dragging him out for 90 days and he can be blown out the water. Two or three bad receivables a month can wipe out his entire net profit for the year.
I worry, too, how realistic Silverman's been about his own time commitments. I know he's going to have a good manager, but does he realize that Sanctuary is going to take a lot of time from his other venture anyway? Does he have the depth of management, at either Tommy Boy Records or Sanctuary, to back up his own divided attention? Before I lent him any money, I'd want to know how he planned to manage both businesses. If he ends up spending 15 hours a day with this new venture, Tommy Boy will suffer -- and Sanctuary needs for Tommy Boy to stay healthy.
Potential customer; 31-year-old New York City producer and musician
I don't doubt that Silverman's concept will have appeal for some people in the music industry. The prices seem very attractive -- around half of what we pay sometimes -- and he has a solid reputation for doing things right.
Personally, however, I have questions about whether it's the kind of place I'd want to work. Why? Because many of the things he's doing to make the place comfortable aren't high on my list -- and he's downplaying things that are important. When you're producing a record and you have your budget and your reputation on the line, you can't afford to take chances. I like to work in places that have 24-hour maintenance people, because there's about an 80% chance that something will go wrong. Things tend to break down around 3 a.m. Even if you can prove to me that it will only take 10 minutes to rouse an engineer with a beeper and get him in, it gives me confidence if the guy's there in the shop. Having somebody on the spot is worth a lot more to me than having fruits, flowers, and a shower. For that matter, so is having an SSL console.
As far as the environment Silverman is trying to create, my feeling is that when I go into a recording studio, I go to work. I sense that's the way a lot of people operate in New York. There's a lot of financial pressure in this business and, to be honest, I've never been in a situation where, after working for 14 hours, I wished there was a shower. My feeling is, let me out of here! At 4 a.m., I'll take a shower at home. I've been in this business a long time, and I can't remember ever thinking, "I wish the vibes were better."
If I were looking for a relaxed place to work, I'm not sure this would be the place. I'd be inclined to go out of town -- to upstate New York or to the Caribbean. For Barbra Streisand, it's probably important to be as comfortable as possible. But for the music we do -- and the hard-edged music that's being produced in New York City -- pressure is important. You don't want bed-and-breakfast hosts, you want people who are totally geared to making sure that you have all the equipment you need and that everything works.
Potential customer; partner in Done Properly Productions, a New York City production company that specializes in music remixing and production
It seems that Sanctuary is going to be very much in line with the way younger talent makes music today. Most established studios don't recognize that dance music and other electronic music made now is recorded much differently from other music. A lot of the younger producers in New York making hit records don't even read music. They rely heavily on polyphonic keyboards, drum machines, sequencers, and other things that are linked together through computers. Most of the work is done in the control room, and Silverman understands this and compensates for it.
Editing, for instance, has become an increasingly important part of making records. There's no reason to do editing in a regular studio and pay all that money. Usually, we're doing recording in one place and editing someplace else. I like the way they're going to have two separate editing rooms with lower rates. As for their choice of equipment, it doesn't bother me that they're not investing in the latest stuff. To me, it's better that they have things that are proven -- things that sound good.
Operator; general manager of Sunset Sound Recorders Inc., in Los Angeles
I have a lot of reservations about what Silverman is trying to do and how he's going about it.
He's right to put emphasis on service and staffing. And he's right to keep promotion expenses to a minimum. The best salespeople are your customers -- this industry is very close-knit.
His philosophy of equipment -- having less than the state of the art -- is fine if he can sell it to customers. But it's risky. A lot of people are becoming used to seeing things like SSL consoles when they walk into a studio. So other stuff, no matter how good it is, can be a turnoff.
Overall, I think Silverman is biting off more than he can chew. Rather than starting out with one room and then adding on if and when he's successful, he's trying to create a five-room studio business from the ground up. It's great if he can book his rooms 12 hours a day, seven days a week, but I think it's very unlikely -- at least in the first few months. This is a very competitive and volatile business, and he's heavily financed. This is a cash-flow business, not a bottom-line business, and his thin capitalization will hurt.
My feeling is that Sanctuary's projections are insanely profitable for a new studio in a competitive market.
Potential customer; independent producer/arranger for such artists as Chaka Khan, New Man, and Aretha Franklin
It's a gamble to open a place in New York that tries to be so different. Everyone has preset ideas about going in and working a certain way, and not many are thinking, "Oh, I have a kitchen? I have a bath?" A lot of people don't care about those things. Some people will, but I think they'll be at the upper end of the market, artists who plan to spend long periods of time in the studio.
Dance musicians are different. Most of them really want to get in and out of the studio quickly. That's just the way they work, the way they save money. The idea -- it's reflected in the music -- is to work quickly, make it happen without a lot of contemplation.
I'd make one particular recommendation: Tom Silverman probably has a lot of friends and prospective clients he could line up. He's got a good reputation. His record company, Tommy Boy, had one of the handful of million-selling singles last year. Despite all that, Silverman says he's not going to give the label special treatment. I don't see why he shouldn't. A Tommy Boy affiliation would be a strong selling point, make the place real. The connection would have commercial value. If a few hits come out of the place, and it picks up the Tommy Boy mystique, I think people will be attracted to working there.