Who’s Making Money?

I might as well be direct in my first post: It’s tough out there, no question about it. The fact that Wall Street was up four (!) straight days last week made front-page news, but it doesn’t change the fact that people are being laid off across all economic sectors and travel and retail are hemorrhaging. Nobody knows this better than we in the media. The Rocky Mountain News closure was soon followed by the Seattle Post-Intelligencer (now online only). The Washington Post may be up for bid, and the rumors swirl about an employee buyback of my hometown San Francisco Chronicle. Like I said, it’s tough out there…
But I didn’t want to kick off “Things We Hear� with down news. There’s enough of that everywhere you turn. So I asked myself the obvious: Who’s making money?
Console makers, it turns out. Mid- to large-format. While I’m sure there are hundreds of 08-09 success and survival stories out there in the recording industry at large, recent news out of Solid State Logic, Fairlight, Euphonix and API tell us something about the state of console/control and the dynamics of emerging markets.
Phil Wagner, president of SSL, was up in the Bay Area a month or so back. His company was up 12% in 2008 and keeping it up in the first quarter. It wasn’t that long ago that SSL was pretty much a large-format console maker and Wagner was outfitting L.A. and points East with 9000 J and K Series boards. The industry changed (though there always seems to be a market for large consoles; just a shrinking one), and after a couple of years of hard times, Peter Gabriel and David Engelke purchased the company, Piers Plaskitt returned, and Wagner became head of U.S. operations. Since then, the company has entered the video and workflow markets, split off its channel strip, found homes for the C100, 200 and 300, struck dealer deals with Guitar Center Pro, released the popular AWS900 and combined it all in Duality, an analog/digital hybrid that has found a home in schools and top studios. Over breakfast, Phil told me about two new C200s that were about to go into two going into high-def trucks being built at the Sony facility in San Jose. One for the Latter Day Saints (who also purchased two C300s), the other for Mansion Media.
Over the past 25 years, Wagner has probably sold more big consoles to more big music studios than anyone else in the industry. He loves tradition, he loves music, he loves the 9000 at Record Plant. But of late he’s been telling all who will listen that the future of music is tied to picture. He’s even written about it. Not in a music video way, or even a concert DVD way. What’s new this time, he says, is that people are consuming music in different ways—sharing through Facebook, at their computers, straight to their phones . We talked about music piped into movie theaters, houses of worship, large-scale events. The demand is there for music and media, whether on a large scale or a small. Either way, production is tied to picture.

Fairlight
has always believed in sound tied to picture, though even they admit that they’ve had to reintroduce themselves to the U.S. market a few too many times and despite real investment in high technology and products that blaze, they’ve never really been able to crack the music market. They’ve done gangbusters in Asia, fueled by a longstanding relationship with leading Japanese broadcaster NHK, and done well in Europe with post and broadcast. Now they’re back in Hollywood and setting up a North America dealer network headed by Audio Agent. Business was up double digits in 2008.
I met up with CEO John Lancken and Xynergi evangelist (and two-time British Academy Award winner) Cliff Jones for a run-through of the new HD3D system, aimed at cinema, broadcast, post, gaming…you get the idea. We have videos up on mixonline.com about the high-def video recorder/player that comes with it, the 3D panner (customizable, but think 7.1 manipulation of sound sources, with top-center and top-rear, to give height), the 280 channels with independent effects. Lancken has long wanted an audio product to match the quantum leaps made in 3D video technology, and by combining the extreme processing speed of FPGA technology with the creative toolset for re-recording mixers, he may now have it. The video alone is worth the price of admission. The no-render-time speed is phenomenal. You’ll be seeing more of this.
Meanwhile, I haven’t had a formal sitdown with Euphonix since the AES show, but the company’s most recent release reported 2008 as their best year in the last 10, along with a move to new corporate HQ in Mountain View, Calif., the heart of Silicon Valley. Here’s a company that virtually invented the workstation controller with its hybrid CS3000 (I can remember them showing a CS3000, with a Fairlight MFX3 dropped in the center section; it even made a Mix cover at Waves in L.A.), but the business has never come easy. It appears that the System 5 and its EuCon architecture, a surge in broadcast sales, and the release of the Artist Series of controllers has brought a new dynamism to the company. More later.
And finally, API. A great company, standing at the head of the never-say-die analog contingent that brings life and soul to our little corner of high technology. They’ve put out a channel strip, continued to build large-format Visions (this year: U of Michigan, Middle Tennessee State University, commercial studio in Europe to be announced next week at MusikMesse) and hit a home run with the release of the 1608, certainly affordable to many an independent producer/engineer at $50k. Read our 1608 review.

The company doesn’t generally like to publicize how many 1608s have been sold, though I’m not entirely sure why. I talked briefly with head of sales Dan Zimbelman, me from the office and he at his Maryland restaurant/bar/inn, where he was inventing a new cocktail for the menu (Jameson’s whiskey, a wisp of sweet vermouth and the juice of a blood-red orange; he’s calling it The Pope’s Revenge). He has told me before that the first 20 were sold before manufacturing began, and the next 20 were presold while the first 20 were shipping. Now, he says, with a wink and a nod, they’re “approaching 100� sold. And they were used on recent projects by The Fray, the Killers and Maroon 5.
There’s a lot of reasons that console makers can grow in a rough economy, and conversely have a tough time when the bigger picture is solid. Dan Zimbelman summed it up nicely, saying that “consoles are at the center of everything we do, and when you buy one you want to stick with it. We can’t do upgrades every year; but we can offer them tremendous value for the money.�
Please feel free to comment and send along your success stories!

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