An Interview With Steve Hoffman

Every couple of years I call Steve up and do an interview about the music business in general, the things he is doing and things going on with the forum. This one was posted in April of 2005.

Doug: Steve, since we left off in late 2002, there seems to have been a shift in the music industry. DCC shut down and SACD and DVD-A were on the way, but now Audio Fidelity is putting out Gold red book CD's again. Was that your intention all along?

Steve: Well in reality, at the end of the old company, we (Marshall and I) thought that everyone was getting ready to go hi-rez and that nobody would want a gold CD anymore now that there was SACD. What I found, however, is that the major labels felt hi-rez was their domain so licensing became a major issue. And actually they didn't really know what they were going to do, so while they were figuring that out, they wouldn't license anything and that pretty much left us in the lurch.

Doug: But then somewhere along the line you decided to put out some vinyl. Did the record companies think you were crazy? After all, nobody listens to vinyl anymore! (tongue firmly planted in cheek)

Steve: I'm sure that's what they thought, but that's good because they let us license great music. Obviously CCR on vinyl is a boutique item, but there is a loyal following for that kind of thing. When the record companies don't care about something that makes it easy for us to get what we want that way.

Doug: What do you think has turned the tide towards vinyl and gold cd's and tube amplifiers? It's one thing to have a few people on the old DCC site, but you can't ignore 5000 people on your forum. Is it a generational thing?

Steve: Well that's a very good question Doug and I'm really not sure. I think its just word of mouth. I think a lot of people are old enough to remember when everything sounded pretty good and now that things aren't sounding that good anymore on CD and the ones that can remember are re-evaluating older stuff. They read someone's message on my forum about the magic sound of vacuum tubes and they have enough leisure time and enough money to go back and experiment. And then when they write about it on the forum and then someone who is a lot younger who has no memory of that great old sound at all says, "Gee, I want to hear this." So then they hear it and they like it and then they tell their friends. It's kind of like spreading the word one person at a time. My forum (www.stevehoffman.tv) is a place where you have record collectors and audiophiles and music lovers and computer folks all co-mingling. And they've all sort of banded together to really be aware of what sounds good and what sounds bad. And I know for a fact that most of the executives of the major labels check out the forum every Monday morning over coffee. So it's like, "Whoa! We have a voice." It's a small voice, but it is a voice.

Doug: What is their reaction to that voice? Do they call you and say they are surprised at something or that they didn't realize anyone noticed or cared or that something sounded so bad-- so they better go back and fix it. I guess what I'm trying to ask is just how much influence does the forum really have--whether that was your intention with the forum or not?

Steve: Well, there are really two factors involved in that. One is private influence and one is public. I know that many of the executives that I have spoken to secretly sympathize with the fact that compact discs these days sound so loud and so squashed and so crappy--they don't like that sound. But they can't do anything about it because all of their competitors have loud CDs and they're stuck. So publicly they say they have the best sounding loudest CDs out there, but privately some of them are lamenting it, but there's nothing they can do anything about it. Because if you have a CD carousel changer and all of your CDs aren't loud-- in the minds of the general public, something that isn't sound all loud all the time is defective.

Doug: I would compare that to the loudness wars on radio that has been going on for years. While of course the college stations that are playing classical music with hardly any processing sound much better fidelity wise-- the consultants tell the people running the commercial stations their station must be at least as loud as everyone else. Because if the public has to keep turning up the volume because-- fidelity or not-- your station is quieter-- they might stop listening. And since it all comes down to money-- whether the PD's or the record people think its good or not-- they have to do whatever makes them the money.

Steve: Right, that is true. But it is also true that there are always enough people--and there always have been people-- audiophiles-- "hi-fi nuts" as they used to call them in the old days-- There have always been enough people with enough of a disposable income to support the boutique record labels-- like Audio Fidelity or S&P records. There is a core of loyal consumers that have wonderful stereos and want quality product. And so even if CD's vanish and everything goes to downloading-- there are still people who want to hold the physical recording in their hand and look at it and read the liner notes and worship it in the dark. And this is nothing new. Even in the 1930s when you read old electronics magazines, there is always one large group of people who are striving for the best sound possible. So, those are our guys!

Doug: So, is the music industry currently on the same page? When CD players were initially being sold, most of them had digital outs-- and separate D/A converters were scarce. Then, the converters became popular and the players with digital outs became scarce. In addition, many record companies began mimicking Mobile Fidelity by selling Gold CD's. They stopped just as the public started craving them. For example, initially, you could not give away "Dreamboat Annie", but now it’s a premium item on Ebay. Has everything finally settled down? When you put out a "Minute By Minute" Doobie Brothers gold CD, will people buy it when it is new? Keeping up with the various trends of consumers must be frustrating for you. I bet you're asking yourself, "Where were all of these people 10 years ago?"

Steve: Yeah, but you also must understand the mentality of most collectors. If it's easily available-- you don't want it. Once it becomes scarce, that collector gene kicks in and "I just got to have that Blondie DCC Gold disc. I don't even like Blondie, but I've got to have it." It's a weird funny thing. So what I tried to explain recently on the forum is that our license for an album is usually for three years only. Now is your chance to get the Doobie Brothers "Minute By Minute" Gold CD for $19 list. If you don't- even if you don't love this album as much as you love Led Zeppelin-- grab it while you can, because its never going to be $19 again.

Doug: And unlike Walt Disney that likes to put things out "for a limited time" and then in five or ten years put it out again. You're talking like the guy at the close out sale-- "When they're gone-- they're gone."

Steve: Yes. Some of the licenses run for three years with an option to renew for two years. But still, even at five years, you turn around and it’s gone. Even at MoFi, these are limited licenses and once they are gone they are gone. And I can't impress on people enough that if they want their gold CD's at a reasonable price, buy them now while they are still in print.

Doug: Obviously when you're working on a project you are limited by the equipment you have at that moment. Over the years your skills have improved and the equipment has changed. Are there any glaring examples that if you could you would go back and fix-- whether to tweak more or back off and not tweak as much as you did at the time?

Steve: Well, two things. When I listen to the old stuff, I still like the way it sounds. In the case of the Creedence catalog actually this time around for Analogue Productions SACD's, LPs and 45s, instead of tweaking more, I've actually done less mastering on there than last time. I've let more of the tiny flaws in the original mixes hang out, mainly because these albums are available in so many other versions that have all been tweaked to death. I like hearing more of the actual master tape sound even though that sound is not exactly of an audiophile caliber. But to answer your question, the only songs that I cringe on are the songs that I remixed in the 1980’s. And when I hear one I think, "Geez why did I mix it that way? -- The guitar is not loud enough or there is not enough echo or compression-- it just lays there". So while others just love those old remixes I did, I just can't stand them.

Doug: How much time do you actually get to listen to music that doesn't involve work? Obviously that's what you do for a living, but I mean sitting either alone or with Karla and Michael and listening for pleasure.

Steve: About an hour of day of just listening and fiddling around.

Doug: Do you ever see the major labels coming back to where you are? With all of the consolidation where Rhino isn't what it used to be-- will the industry ever come back or are you and Sam and Analogue Productions now left with this nice niche of folks who enjoy things that aren't judged by how loud they are?

Steve: Well the way I see it, engineers like Bill Inglot and myself and Doug Sax and Shawn Britton over at MoFi and a few others are the last of a dying breed. We won't compromise our work ethic by squashing the hell out of something that wasn't meant to be squashed. Other than us, I don't think that anyone else is ever going to do that in the modern mastering world. Even on my forum when I read about some album I'm not really interested in, ( but I read about it anyway ) , they'll say, "Yeah, this new remaster is so great--it’s nice and loud now." And I think to myself, " Oh no, it’s nice and loud?" that's like the kiss of death to me. I don't think there will even be CD's in about five years-- Music is all going to be downloadable. And when that happens, it's totally out of our hands. Although small boutique labels will survive because of our inherent fan base, I think for the general public that have their IPods and those lo-fi little headphones will want LOUD and that will be enough for them . It’s sad, but it’s always been that way in one form or another. And there have always been audiophiles and an audiophile market and judging what I read on my forum, there are enough young people under the age of 28 who are into what us old geezers are into that the logic of hi-fi sound will survive.

Doug: Any details you can give me on the direction of the Audio Fidelity releases? Of course you can't be specific, but will we see more 70s or simply roll through the Warner Brother's catalog? Or is it like the old days of DCC where you try and figure out what people might like and hope that matches up with the list of things the record companies will license.

Steve: Mainly Gregorian chants and bagpipes in surround... Just kidding, but you know, that actually sounds interesting... No, the problem is there are so many factors it is hard to say. One, major labels are reluctant and hold their cards very close to their chest. We might ask for 30 titles and we might get five out of there. So it’s not so much what we want to do, but what they will let us do from the things that we want.

Doug: But you must have some criteria and some direction you are hoping for?

Steve: Mainly it's always rock and roll -- early 80s, 70s and 60s. That seems to sell the most.

Doug: Which is important since while you aren't trying to get rich, someone has to pay the bills.

Steve: Right. In the old days of eight years ago we would release "Eagles Greatest Hits" and sell so much that we could afford to release four gold jazz titles that would never make their money back-- loss leaders. But we can't do that anymore. Every title has to make money at this stage of the game so we can't do everything we want. I will say, however, the enthusiasm over the re-emergence of the 24 karat gold CD has been quite overwhelming. We're really inundated with letters and cards and phone calls and e-mails saying "Thank You, Thank You, Thank You, Thank You, Thank You!” So we know we're on the right track. Not everybody in the world likes the Doobie Brothers and not everybody in the world likes Deep Purple, but it’s a start. And when we can show the major labels that we are a source of income for THEM, I'll be able to tell you the direction we'll be going in. Right now it's just take what we can get of the good stuff and what we can't get, we'll just bide our time and wait until it becomes available. And at this moment we're just trying to get a catalog of some really good titles so then we can say, "OK, we made money for you-- now what are you going to do for us?" Maybe by then it will be time for "Soft Parade" by the Doors or some other titles like that. It’s an agonizingly slow process with licensing and legal contracts, advance royalties and we all have to be patient.

Doug: To further that thought, while you can't list every title and all of the specifics, can you give me an idea of what kind of money we're talking about. Is it $5 million to do the Doobie Brothers or $100,000? Because while it is easy to get on the forum and say, "Hey, why don't you put out a gold CD of this title", I don't think anyone, including myself, understands the complexity or the kind of money it takes.

Steve: Well it is complicated and it’s not only the money, but the majors want to investigate your bank accounts and how much money you have and what your business plan is. They won't license to just anybody. In general, it might vary from title to title depending on what the original artist’s contract is. If the artist makes a lot of money, an artist from the 70s or 80s, then it's going to cost us more. On the other hand, if an artist doesn't make that much money from one of those simple contracts from the 50's 0r 60s and the record company makes more money out of the deal it won't cost us as much.

Doug: Now I don't expect any specific titles, although I won't turn one down, but can you give me a range of cost?

Steve: Yeah. In 1994, it cost DCC $30,000 in advance for a title by Creedence. So we would pay Fantasy Records that amount of money and they would license us that title for three years. We would also have to pay publishing royalties plus all of the mastering and manufacturing costs, artwork costs.

Doug: And so the $30,000 was just so they would hand over the tape. You still had to incur all of those other costs.

Steve: Yes, it's called an advance against royalties. The record companies don't want to waste their time with anything less; why would they? They don't care if we sell five units or 5 million units. Initially they want an advance to guarantee a certain number of units will be sold. In one instance we licensed a jazz title and they wanted a guarantee of 5,000 units sold. So we had to pay them the artist’s royalties for those 5,000 units and we probably sold something like 2,000 units and that was it. We did it because we loved the music and the "big" titles were paying for it.

Doug: Has the demand for units sold ever been so high you turned down the licensing offer?

Steve: As I said, it isn't always about the money. Two things, the artist themselves don't want us to do it because they're working on a boxed set or something like that. The other thing that happens is we bring a great idea to them and they say, "Hey that IS a great idea. Why should we license that title to you when we can do it ourselves? We don't need you guys."

Doug: Of course that would be fine if they did it provided they hire you to do the mastering.

Steve: But they never do it the way audiophiles want them to do it and audiophiles are the only ones who will pay $30 for a top title. Most people are happy paying $12.98 and think even that is a lot of money. So to spend $20 or $30 on a title, that takes a special sort of person--a collector or a really big fan of that album and they want to hear a difference.

Doug: So I guess we won't be logging on to S&P Records website to download songs for 88 cents each anytime soon?

Steve: No. But as I've said many times now, it isn't all about money. The record companies have all been pretty good about money. They haven't gouged us. And I can't emphasize it enough-- The major record companies are not the enemy. They simply are not. There is just so much red tape with some artists that they can only do so much for us. You know in the old days of the music industry with Buddy Holly and even the Beatles, their contracts with the record companies were probably only four pages long at the most. Now contracts are hundreds of pages. Some record companies don't want to have to go through all of that just to license a title to us. Springsteen for example. The record company won't even entertain letting anyone remaster a title for a different label because the artist doesn't want to deal with it. And Sony Music doesn't want to deal with all of those lawyers and years of litigation. So some projects will never happen until some things change. That means you have to eliminate certain artists from the picture and don't even go there in your mind. And so you choose the best of what's left over. So what it really comes down to a lot of times the relationship between an artist and the major record company. It really doesn’t have anything to do with us or the desire of the record company to license something to us. It’s the artist versus the label with the royalties and all of those kinds of things. Just like in the movie business, etc.

Doug: Which leaves you guys in the middle with both the artist and the record label saying, "Look, we aren't talking to each other about this, so we certainly aren't going to be talking to you."

Steve: Exactly. But there are some artists who love our stuff. The Doors, for example, they loved our stuff so that was easy. They called up Elektra and said, "Hey, we want them to do this." So that was easy. Paul McCartney, that was easy because he liked our stuff so he said, "Do what you want." On the other hand you have some artists who say, "Wait a minute. I don't want you to release that. I don't like those old songs, I want to re-do all these songs because I don't like the way they sound anymore." And they won't agree to letting us have them until after they re-do them which of course we don't want them to do. So it doesn't always work. On the other hand there are artists that understand what we're trying to do but have their own issues with their record label. And when you factor all of that in it makes for a really long day.

Doug: Does Baby Michael appreciate what you do?

Steve: He loves the up tempo songs. He loves The Lovin' Spoonful for some strange reason. He rocks out to "Do You Believe In Magic".

Doug: Wait until you tell him he's hearing the wrong mixes.

Steve: That's right. "Wait until you hear these in mono sonny boy!"

Doug: Anything else you'd like to add?

Steve: I'd simply like to say "Thanks" to everyone for staying loyal all these years and hopefully we can release some great titles in the near future.

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 ©2005 Douglas P. Hess Jr.