It’s hard to imagine an entertainment alliance more out of left field than this one.
Burbank-based CenterStaging Corp., which owns a massive sound stage and rehearsal studio campus near the Burbank airport, has teamed with Major League Baseball Inc. to promote Rehearsals.com.
The partners are marketing the site, which features performances and backstage looks at up-and-coming acts and A-list musical performers such as Christina Aguilera and the Pussycat Dolls who use the rehearsal studios to prep for concert tours. Initial access will be free to users; the revenue will come from sponsorships, pay features and merchandise sales.
“Every rock star wants to be an athlete and every athlete wants to be a rock star,” said Dinn Mann, editor in chief of MLB Advanced Media, which is Major League Baseball’s interactive media and Internet division.
“We wanted to expand beyond games played on the field and pair with established, like-minded brands that already do or can stand on their own,” Mann said. “We already have a platform that was large and already equipped to handle a lot of traffic, so these partnerships make sense.”
The Advanced Media division has less to do with bats and balls than Internet servers. The unit grew out of baseball’s sophisticated and successful Internet enterprise, which has been broadcasting games over the Internet since 2002. The partnership will allow CenterStaging access to MLB’s massive online infrastructure.
Major League Baseball’s foray into the world of rock music took off last year, when it partnered with Signatures Network, a major player in music marketing and licensing. With the deal, MLB agreed to handle Web site services including site administration and the sales of concert tickets, music and merchandise.
This year, MLB’s Advanced Media expects to generate as much as $40 million through non-baseball initiatives, the majority of which involves the Signature Network. Among the rock acts whose sites are run by Advanced Media are Bruce Springsteen, Elton John, Coldplay and the Beatles.
Rehearsals.com isn’t generating any money yet, but those who oversee the venture are confident that advertising, site and artist sponsorship, as well as eventual distribution through wireless and other new media outlets will generate cash very soon.
“The deal isn’t monetary right now; what we get is promotion and marketing power of Major League Baseball’s online fan base and 10 million visitors a day,” said Tommy Nast, CenterStaging’s executive vice president of business development.
Baseball also has a say in operating decisions and the acts on Rehearsals.com, and even a share in the back end, so when revenues do come in, its “considerable” investment will pay off through ticketing, sponsorship and advertising, e-commerce and paid content from the site or distributed to other media pipelines.
Pressure to expand
CenterStaging has grown from one rented building in 1990 to a huge campus that is home to 10 studios today.
The company signs its Rehearsals.com artists to agreements that are typically exclusive, but can vary depending on the act’s recognition level. “Emerging” or unsigned artists’ deals tend to be exclusive, while superstar-level acts may not be. All agreements give CenterStaging and the artists the rights to all the content.
The performers featured on the site aren’t directly compensated either, and they don’t get discount rental rates for agreeing to be filmed.
So how do you get artists to give away for free what they can charge for on tour? You pay them in promotion and exposure.
They get valuable exposure on the site (and any other distribution channels CenterStaging launches), use of all the footage and cross promotion from the facility through mlb.com and other negotiated channels such as local radio stations, television stations and the like.
Early this summer, for example, the New Cars held an open rehearsal session for a live audience. Those invited were fan club members and those who won access from a local radio station that publicized the rehearsal.
It’s not cheap. The shoots use eight to 12 high-definition cameras that each cost between $30,000 and $100,000 a day.
Part of the expense is due to the use of unmanned, robotic cameras run from control rooms outside the stages.
“Unmanned cameras give the artists a comfort level,” Nast said. “There aren’t a ton of other people there. There are no handhelds in their face. No jibs overhead. Within 10 minutes they forget the camera is on them so we can really capture natural rehearsal moments.”
Upgrading and wiring the studios with 50 hi-def cameras, control rooms and other technology a little more than a year ago was expensive, too. The project ran $14 million, which came from company founders and board members. That’s a huge expense for a small outfit traded over-the-counter with an $85 million market cap.
The company reported $5.7 million in revenues last year, and posted a net loss of $25.3 million in fiscal year 2006, a steep increase from the $6.5 million loss recorded the previous year. The steeper loss was due primarily to $7.2 million in debt conversion, $7.3 million in costs associated with the Rehearsals.com division; and $2.5 million from common stock shares issued to consultants for services.
Most weeks, seven of CenterStaging’s 10 studios are filled, and the month of October is booked to capacity, too, said Paul Schmidman, the company’s chief operating officer. To accommodate individual stage setup needs and all-hours rehearsal schedules, the company has 100 full-time employees and an equal number of freelance staffers who work in three shifts round-the-clock. CenterStaging’s expenditures on salaries and wages increased from $3.9 million for fiscal year 2005 to $6.6 million for fiscal year 2006, mostly due to the 22 percent increase in the number of employees to accommodate Rehearsals.com.
Lucrative parts
Christina Aguilera has been rehearsing there for the last month using two to three studios for her prep work with dancers and musicians and will be there for another month or so.
One lucrative part of the company’s business is equipment rental for the rehearsals guitars, pianos, drum sets and the like for acts that need a turnkey operation to practice, and most take advantage of the services.
That’s a good thing, because despite all its promise, the Rehearsals.com portion of the business hasn’t brought in any revenue yet and CenterStaging is already paying more staff to accommodate the editing and technical needs of the venture.
According to a March Securities and Exchange Commission filing, CenterStaging reported that “in order to continue to ramp up our rehearsals.com division in fiscal 2007, we will need additional financing, either from loans or the issuance of debt and equity securities.” Without the money, Reheasals.com could cease operation, the filing states.
Website shoots take place an average of three days a week, and Schmidman said the company hopes to expand that to five or six days a week within the next six months.
CenterStaging has already begun receiving submissions from musical acts interested in participating on the Rehearsals.com site, he said.
“At first it was hard to convince artists to participate, but when you explain to people that they will benefit from the exposure and walk off with a great finished product to use, it’s easier,” Nast said. “We are incurring the production expense; the labels and managers don’t.”
In anticipation of increased demand for the facilities, the company is planning to add a second sound stage and a studio soon, and plans to expand to Las Vegas, though executives declined comment on the capital outlay to undertake the work or a formal timeline.
Dave Broome, executive producer of “The Biggest Loser” and NBC’s new reality show “Star Tomorrow,” which uses CenterStaging’s facilities, said the full-service setup is what makes the operation so appealing. Based on his experience there, Broome is in the process of developing a reality series on CenterStaging and Rehearsals.com.
“There are great characters coming through there, but even more interesting is getting to see what it takes to get the band ready to tour,” Broome said.
