Studio One Media Inc. (SOMD: OTC US) President and CEO Lawrence “Larry” Ryckman, talks with the Opportunist’s Managing Editor Leslie Stone about his company’s MyStudio and AfterMaster subsidiaries and how its patented technologies are transforming the music and entertainment industries.
Ever since “American Idol” debuted 10 years ago, TV viewers have been hooked on reality-show talent competitions. And year after year, each new season continues to draw thousands of hopefuls who vie for the chance to showcase their talent. Larry Ryckman, an award-winning entrepreneur and executive with notable achievements in the entertainment, high technology and sports industries, was watching “American Idol” about eight years ago when an idea hit him: why not create a stand-alone, state-of-the-art professional audio and video recording studio where prospective talent show contestants could audition? And thus the MyStudio concept was born.
Ryckman’s first entertainment company, QSound, which in the early ‘90s developed proprietary audio technologies for the music, film, TV and computer and video game industries, was such a success—Madonna, Michael Jackson and Sting, among others, used his patented technologies that he knew he was onto something that could transform reality-show talent competitions. “This was an amazing opportunity. ‘Idol’ kind of showed us that people like Kelly Clarkson could come off the couch, go to an audition and become a superstar,” he says.
Ryckman’s hunch all those years ago proved to be correct. Today, MyStudio is considered one of the most effective new technologies for identifying top talent. Studio One recently inked a deal with Warner Music Nashville to launch a MyStudio HD Recording Studio at Opry Mills Mall in Nashville, featuring Warner Music Nashville artist branding and music. And Simon Cowell hired MyStudio for his popular “The X Factor” TV show. “Two of this year’s Top 8 ‘The X Factor’ contestants came through MyStudio, although we accounted for a fraction of the overall auditions.” Ryckman says. “Simon Cowell is a big supporter of MyStudio and was the first to use MyStudio for music competition. And after the success of ‘The X Factor’ mobile Pepsi/MyStudio we built this year, we plan to build additional mobile studios for use nationwide.”
Opportunist: How long has MyStudio been around?
Ryckman: We launched in 2007 and have since raised over $20 million. We came charging out of the gate and our market cap quickly grew but then the Great Recession hit. We were ready to go with multiple studios and everything was great until September 2008, when the Dow dropped 777 points on the heels of the U.S. bank bailout and we fell off a cliff. We regrouped and continued to refine our technologies until the economy stabilized.
Opportunist: Do you have a music background? How did you get into the industry?
Ryckman: I had a couple of bands in high school—playing guitar, drums and vocals—and always loved music. [Laughs]
At 23 I became CEO of American Artists, a film and video company in Los Angeles, and that got me into the entertainment world. By 26, I was the founder and CEO of another entertainment audio tech company called QSound. We did a merger and took it to NASDAQ and raised over $30 million dollars. We became a stock market darling and reached close to a $500 million market cap, which was almost unheard of back then for a startup NASDAQ tech company. Bon Jovi and U2 were investors, and we were followed extensively in the mainstream media including Barron’s magazine and the Wall Street Journal. I retired at age 30 after that project and bought a professional sports team. I guess I’m somewhat of a serial entrepreneur and have been involved in a diverse number of companies, but I always seem to come back to entertainment and technology.
Opportunist: How does MyStudio work?
Ryckman: It lets a user, for a fee, record up to a five-minute personalized video with professional-quality backdrops, lighting and sound. We use Hollywood-style green screen technology and people can choose from more than 1,000 HD backgrounds—both static and dynamic—and literally thousands of licensed karaoke tracks from Sony, Universal, EMI Music Publishing and others. The lighting is custom programmed for each virtual background and the sound quality is derived from a specially engineered acoustic design and a proprietary audio signal sequencing process.
Opportunist: What is Simon Cowell really like?
Ryckman: He’s one of the nicest guys you’ll ever meet. On TV he comes across as being harsh, but it’s just because he is honest and an absolute perfectionist. In the board room he is 100 percent a gentleman. For our small company to get Simon Cowell to step up and say ‘I want to use this,’ still blows me away. Any involvement with ‘The X Factor,’ one of the most expensive TV shows out there, is a tremendous opportunity for us.
Opportunist: Who is the most interesting person you have met?
Ryckman: That’s a difficult question. I have known so many. I guess I would have to say Steve Jobs because he got booted out of Apple and came back and built one of the most successful companies in the world.
Opportunist: Is Studio One in a fund-raising mode?
Ryckman: As a junior company, we are always in a fund-raising mode. Our stock price is lower than we would like to see it, so we just haven’t wanted to raise much capital at these low prices. We are currently operating off a line of credit that our chairman Frank Perrotti has provided. We believe our near-term revenue prospects are strong, but we are going to continue to be in fund-raising mode until we are profitable.
Opportunist: What are your goals for the stock?
Ryckman: Our biggest challenge is that we really don’t have an audience [for the stock] yet. So, our focus right now is getting a wider audience for our stock and if we can get the earnings and the bottom line where we need to be, we expect we will see our stock climb higher. We have to show real revenues and real earnings in the next couple of quarters.
We aren’t out of the woods yet, though, and our products need to be made profitable after a long development stage—neither MyStudio nor AfterMaster is profitable yet—but our focus is on those two subsidiaries and the partnerships that we have.
Opportunist: Tell us about your experience owning the Calgary Stampeders.
Ryckman: It was fabulous. My staff and I built them into a very successful team and won the championship. I was born in Toronto and had moved to Calgary when the football team became available, so I bought it. That’s kind of how it happened. It was during the time when groups of guys were buying football teams and Wayne Gretzky [former professional ice hockey player] and [sports executive] Bruce McNall and [the late comedian] John Candy bought the Toronto Argonauts. Then I got my feet back into the entertainment business and went back to full-time work in 2006.
Opportunist: Which of your accomplishments makes you most proud?
Ryckman: It might sound crazy, but I cannot measure them like that because they are each so different. When I was a young CEO, I had the president of Nintendo write a $4 million in nonrefundable up-front payment for licensing of QSound. That project was really high profile during those days. That kind of thing just didn’t happen back then with start-ups.
Opportunist: We understand you entered a deal with Hard Rock International.
Ryckman: Yes, we are excited about that. Hard Rock is a multibillion-dollar company with 173 locations worldwide. Our first MyStudio just opened at the Hard Rock Café in Las Vegas and we have plans for at least four more locations. We expect our partnership with Hard Rock to generate new marketing, promotional and revenue opportunities in an environment completely different than the malls.
Opportunist: What exactly is AfterMaster?
Ryckman: It’s our biggest asset and we believe it will be the biggest revenue generator for us in the short term. It is an audio technology that was founded by the same group of us who founded the QSound audio technology over 20 years ago. My colleague Shelly Yakus has the distinction of engineering more platinum albums for more artists than anyone else. He is the most successful audio engineer ever. He developed a great new audio technology that lets you take any kind of audio and remaster it and make music significantly louder, fuller and clearer than any other technology in the world. It is truly a dramatic breakthrough in audio. AfterMaster lets us go back and remaster massive amounts of catalogs of music. There is a chip being developed that will make audio significantly clearer and better than regular audio. We have non-disclosure agreements with some of the world’s biggest companies and believe that we’re on the cusp of a significant roll-out.
We also just recently launched our online version of AfterMaster for independent artists through Guitar Centers nationally. We call it ProMasterHD and anyone can upload their music to our website, www.promasterHD.com, and have their music mastered with our amazing new technologies.
Opportunist: What do you enjoy most about your work?
Ryckman: The creative process and the people. Seeing the diverse videos being created at MyStudio and also being a part of making music sound better. That is what really gets me up in the morning. When somebody sings a song it’s a captured piece of history—it’s something that did not exist before. And it is so rewarding to watch ‘The X Factor’ and see our little girl Carly Rose Sonenclar and Emblem3, who walked into one of our studios, did an audition and are now on a national TV show. It gives me a real sense of pride in helping these people fulfill their dreams.
It’s also a privilege to be involved with such an amazing array of some of the top people in the entertainment industry who serve on my Advisory Board: music super-producers like Rodney ‘Darkchild’ Jerkins and Richard Perry, legendary songwriter Diane Warren, casting director Sheila Jaffe and music executive Jason Flom, etc.
Opportunist: Are any acquisitions in the works?
Ryckman: We have been approached several times, but the biggest problem is we have a small market cap. We aren’t currently looking at any acquisitions ourselves but there are always people who are circling around because of our IP. The company is very unique and very much an IP company with four patents now issued and several more pending. A really amazing team of people developed our technologies, which are now being recognized by some of the biggest names in the entertainment business.
Opportunist: What would you like to achieve in 2013 and beyond?
Ryckman: To build many more MyStudios—either stationary or mobile. We currently have seven. Capital has been prohibitive until very recently, but our new partnerships such as ‘The X Factor,’ Hard Rock and Warner can be real game-changers for us. We are also in a production agreement with Lionsgate [a leading global entertainment company] to create a prime time TV show based around MyStudio. And we expect to be starting auditions for Tyra Banks’ ‘America’s Next Top Model’ in the very near future. I also think it’s possible that AfterMaster can become a standard in the audio world for use in mastering music, motion picture and TV sound as well seeing our chip version of AfterMaster be incorporated into consumer hardware such as headphones and televisions, etc.
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in the Orlando area.
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