Peter Waterman puts his opinions on the line by saying exactly what he thinks of the music business, musicians and capitalism.

I don't know where to begin with Pete Waterman. He's a producer, entrepreneurial owner of a studio complex and two record companies, manager of artists, club Disc Jockey, and ex-journalist to boot — a man whose business is prospering in a fashion which is almost indecent when the rest of the industry is having such a hard time. At Pete's London premises there's no intercom system, he simply opens his office door and yells.

So how does he do it? How is he making so much money in a time of recession? His basic philosophy of 'if you don't like the way things are done, do it yourself' probably best explains it. There's not a lot he likes about the way things are done in this country's record business, and in the face of constant competition from the major record companies, Waterman having spotted his very own gap in the market, homed straight in on it and is hanging on tight.

Needless to say the majors would dearly love to have this niche for themselves but are not geared up to run it the way Pete does, so Pete continues to keep it to himself.

Music for Dancing

What is the niche? Dance music and disco music. Coming from a background as a Mecca Club DJ, who better equipped to know how this market operates and what it really wants? His authority was recognised when he started writing for magazines. At Record Business he ran a monthly column called Disco Doc which turned into something of an A&R feature, with Waterman listening to mixes and telling the dealers which ones to order.

Gradually the record companies started to ask his advice too until he moved into A&R and promotion full time. At Magnet records he was one of the very first people to remix a single putting it out as a 12" version. This he did out of sheer frustration as a DJ, to get what he wanted.

Whilst at Magnet he put out Peter Collin's first album; he was working as a television jingle producer at the time. The resulting partnership, formed in 1979/80 was called Loose End Productions. 'I found the bands and the songs and then Peter went into the studio with them and produced the records.' There followed a string of successful records with Matchbox, the Lambrettas, Piranhas, Alvin Stardust, Tracy Ullman, the Belle Stars, Musical Youth, the Tigers of Pang Tang and finally Nik Kershaw.

The partnership then split up as the two men felt the need to develop in different directions. 'I'm a pop record producer. I'm not interested in spending hours and hours on bands, and Peter wanted to spend more time. I demand a hit a week. A hit a day helps you work rest and play.' So he started producing heavy rock bands and we mutually agreed to go our separate ways. I wanted to make dance records and that is something that he can't do. Of course 'Pass the Duchy' was brilliant, but pop music changes and was becoming more dance orientated.'

A brief period in Los Angeles resulted, amongst other things, in the composition of Alison Moyet's 'Invisible'. Back to England and there followed work with Hazel Deane, Divine and Dead or Alive.

By now (1984) the empire's foundations were well and truly laid. Established in his own right as a record producer, having formed PWL (Peter Waterman Ltd), Waterman met musicians Matt Aitken and Mike Stock, with whom he formed a production partnership: Stock, Aitken and Waterman Productions. This team is now one of four in the company, the other three being Morrison and Washbourne, Phil Harding and (non-exclusive) Kenny Beck.

Overboard on Outboard

The studio facilities at Borough, near London Bridge, are there to serve these producers. The rooms are not hired out to anyone else, and in deference to the type of work which comes out of them, there is just about every piece of outboard gear you could care to mention. Initially there was the one studio with a small overdub room, SSL console, Studer and Otari machines, and Eastlake monitoring to go with the Eastlake room. By the time you read this, the second studio will be up and running with more or less identical technical facilities. And there is more on the way: a country house facility, a studio in the Virgin Islands. You wouldn't think he had robbed a bank; you'd think he'd robbed ten!

There are all sorts of other things going on in the building too. There are about 30 people here at the moment. It has grown more than I meant it to. I formed the record company because nobody liked my Princess record which went on to sell over two million — it was the biggest hit of the year in Germany.' Fair enough. Two record companies then: Supreme (which is black artists) and Sublime (which is 'outrageous, high energy records')!

Artists signed include Princess, the Three Degrees, Austin Howard, their first American signing Kenny Beck, Wanda De (a girl DJ), Rick Astley and, finally Lana Pellay — Our sex change, who has just had a huge club hit with 'Is That a Pistol in Your Pocket or Are You Just Pleased to See Me?' It takes all sorts.

A small insight into the buzz that Waterman gets out of the whole enterprise is provided when he relates an incident which happened at the very beginning. 'My very first record was out and I was walking down an alley way when two girls came towards me, and they were listening to Pick of the Pops on the radio. My song came on, and these two girls screamed, they literally screamed, and started to sing it at the tops of their voices. I felt like going up to them and saying 'I made that you know'. You rise, momentarily, in stature; it's nice to be proved right. With Nik's 'I won't Let the Sun go Down on Me', I was the only one who said that it would be a hit.'

"...I couldn't even tell you where the middle C is on the piano..."

That first hit was to make a poor man very rich, as they say. Back home in Coventry, his parents were a bit bemused by all the goings on. When, finally, an incredibly large royalties cheque arrived, his mother told him to 'give it back this minute'.

His outspoken dogmatism, I believe, may be partly put down to his Northerly origins. Being a rather more weedy Southerner myself it's all a bit overpowering! But there is no denying it gets results. His enthusiasm at times has an almost childlike quality in its genuineness and fervour. Another motto which I would ascribe would be 'Don't do anything by halves.' I'm thinking about the studios now, where the facilities match exactly the over-the-top working methods employed by its users. Unlike commercially available studio facilities you do not need to look to hire companies for outboard gear. Since the facility is not there to actually make a profit itself, they can afford to give it everything. The studio is paid for in record sales. This sideways approach is actually very logical and it's surprising that there are not many more companies being run the same way.

Even though Peter keeps saying he doesn't understand the equipment, he's not a musician and other similarly depreciating things, he manages to instill enormous confidence. 'I can spot a hit, that's all. The gold discs on the wall show that.' There are certainly plenty of those.

'We built the studio because we couldn't get the quality we required from commercial studios. It got to the stage where we were in a well known studio in town which, when we need to move out of there, we had to hire a pantechnicon to move all our effects and gear. It's ridiculous.'

A Working Class Environment

My investment over the past year has been £1½m and it has all come off record sales. We're the most technically advanced studios as far as toys are concerned. Our philosophy is different to other producers; we would rather have plain decor and 7 AMS units. We prefer working class decor to give us a working environment, because that is what we are doing here.'

Working class is a bit of an exaggeration, something which it must be said, the man is prone to do. He's simply trying to say that they pour money into equipment rather than surroundings. On the other hand he says. 'I want to get lasers in the control room; they're entitled to a bit of entertainment when they are paying all that money to use it.'

David Hawkins of Eastlake was consulted at great length over the acoustic design as well as providing the monitoring. In the new facility again, Eastlake's influence is more than evident. 'David has been more than incredible in the last year helping us. It has been unusual for him too because we didn't want any of the special Eastlake type finishes — just cosy and pleasant.

'We were the first to have the Publison Infernal machine. We have always had two Lexicons in both rooms. We have two REV1s, three REV7s and 9 AMSs. But when we make a record, every piece of outboard gear is used and sometimes even more is hired from our own hire company.

'We're not here to make a profit from the studio; it just has to pay its way. Other studios have to make a profit. Of course we have to pay the staff, the rent and equipment, but the profits come from the record sales... We don't do hourly rates; people hire the producer and pay for his day. We don't have lock out because with SSL you don't need it. At the moment we are doing two sessions a day seven days a week. My SSL must be the hardest working SSL in the world.

'This studio opened out of sheer frustration: the outboard gear hire charges were costing more than the studio time. It's ridiculous, the hire companies are getting the money the studios should be getting. So I thought: I would buy an SSL, as it would be brilliant for the way we work. Our basic livelihood comes from 12" records so the total recall facility comes into its own. We bought the SSL without a studio and asked them to put it in a flightcase. They thought I was crazy.'

Having all the effects handy allows for spontaneity. I don't particularly want to spend three days doing a mix because pop music has to be exciting, and if it takes you three days then you've missed something. When I do a 12" I like to play it and do what every club DJ wishes he could do. I'm looking for gimmicks on the mixes. My engineers know the way I work and if I shout for a triplet they will have it ready, purely because the facility is mine. If it were a commercial studio I couldn't have those luxuries. We have spent £500,000 on equipment in each studio. On a normal commercial basis that would be frightening.

The whole studio is fitted with a MIDI buss on the wall and everything is done off the SRC which is displayed on the console. Never buy a recording studio — you never finish buying the equipment!'

"The charts are full of useless artists."

Man or Machine?

So what of the records themselves? 'We do things on records which people don't understand. People have tried to copy Dead or Alive, but the whole effect depends on the totally pre-fabricated world of our studio. There are no real instruments and even when we do use guitar we use it through a Rockman with lots of effects into the desk. Any drummer will play Simmons pads triggering real drum sounds off an AMS. We don't need a studio because with this equipment we can build the Albert Hall.

'Trevor Horn is old fashioned; he still believes in human beings. Don't get me wrong; I love his sounds and some of the things he has done. It's just not the way we want to do it. Frankie was brilliant, but we had been doing it for six months.

'Because of the market we are in we have to listen to other people's stuff. With Musical Youth, a lot of the ideas I nicked from ABC's Lexicon of Love; 'Owner of a Lonely Heart' had the most sensational use of reverb, but at the end of the day, Trevor doesn't go right to the extreme. I go all the way and become totally technical.

'My partners Mike and Matt are really great musicians but there are hundreds of really great musicians coming out on records every week. Nobody is precious about their guitar anymore; they don't say they could play it better than what you're doing to it because they can't. It's rubbish to say that it lacks human feel. I don't know anyone who ever bought a record for human feel; they buy them because they can sing along; you can't hum a bass drum.'

What of the Stock, Aitken and Waterman partnership? Who does what and when? 'I am the non-musical one. My contribution to songs will be basic stories and lyrics. It is difficult to define our roles like that. Other than playing (I couldn't even tell you where the middle C is on the piano), I do ideas and arrangements (although that is unusual). I couldn't write a drum pattern for instance, but maybe I will hear a melody that they're playing wrongly and I will sing it the way I hear it should go. As a DJ you hear things differently, and they will bend their playing to keep me happy. I am the bully of the partnership; somebody has to make decisions and I am that somebody at the end of the day. If nobody agrees with me then we'll fight... I'll take things off that are too clever in order to create space for the drums to come through.'

Peter works with Phil Harding engineering, a partnership which has existed for many years and as Peter says, 'Phil knows exactly how to get me excited. If it excited me it will excite other DJs. I say make the bass drum go like this and they think I'm loony. I come up with ridiculous things that you could never possibly play. I'm like a kid in that respect and the guys pander to my whims like you do giving a child a lolly to get them to go away.

'Without a doubt we are successful because of the talent I work with. Mike and Matt are able to stand aside and take criticism from someone who can't play a note. I don't know how any of this equipment works; I feel terrible when these kids come in with their computers. I couldn't even tell you how to switch the Fairlight on.'

Remixing

The art of remixing is obviously Waterman's forte, a fact which he endorses with the information that he could make a living every week simply from remixing other people's stuff. However, matters are not as simple as at first they seem. In order to remix successfully a certain amount of research is required.

The second Princess offering did not succeed straight away and so Peter set off round the clubs on his own find out why.

'Say I'm Your No.1 was what we call a floater,' (roughly translated as a smoocher I think). 'But now people were into hip-hop funk go-go music, so the answer was to do a hip-hop version instead. It was a totally different record even though the vocal was the same.'

"Summer means dancing in the streets; in Winter everyone wants smoochy music so they can hug each other warm."

So impressed were George Michael and Elton John that they asked him to do the same for them.

'Theirs was a rock 12-bar, so I couldn't really do the same thing with it but we gave it new chords, made it more dance-like, rewrote the string lines in the Publison and put Elton's backing vocals into the Publison. We had two 24-track Sony digital machines and the only thing we kept of the original was the vocals. The chords aren't even the same and everything was done via machines. The drum patterns were rewritten with new drum sounds. Really, we have no reverence at all.'

For the time being Waterman has stopped doing remixes for other people because he feels he is giving away too many of his ideas which would be more profitably used on his own acts. If the people at PWL are becoming a little insular it is only the result of increasing frustration with the audio and record businesses.

Record Companies

'I've never walked into a record company in my life and had someone say that something was a hit. A&R people wanted us to remix 'Pass the Duchy'. As for Nik Kershaw, they told me there wasn't a hit on the album. I have spent so much time trying to get record companies to believe that kids like to buy exciting records. On the other hand with 'Spin Me Round', CBS didn't understand it, but I will say that when it charted they stuck with it for 17 weeks before it got to number one.

'I just know when a record is a hit. It must be exciting, though I don't necessarily want it to be clever. People buy records which move them. I'll just walk in and say 'It works' or 'It doesn't work, start again'. It doesn't matter who wrote it or who it is. At the end of the day it is the guy or girl singing the song because they represent the most emotional aspect of the song. The voice is always louder than any other instrument; I always thought that in 'Spin Me Round' the vocal should have been even louder. I know when I have got it right because I will play it all the time.'

One of the reasons Peter has met with so much opposition over the years is that dance music follows its own trends. It has its own market, quite independent of what the general charts may be up to, and it therefore requires different treatment, the market being aimed at is 14 to 20 year olds who simply want to dance.

'I'm going on the road soon with a bus and taking all our acts with me. We've got 10 dates in this country and then we're going off to the continent and America, you see we deal in minority music. As far as record companies are concerned, dance music is a pain in the arse because you are only as good as your next record. If it's no good then they won't play it. It's a fiercely competitive market and there are a hundred imports from all over the world every week to dance to. The disco records shops stock what they know they can sell. They have to pick the hits because they know their market is lost the minute it goes top 40 and the big shops take it up. So we do the remixes for the smaller shops, we have to look after them.

'You see, the major record companies can't do it. They don't understand. They couldn't go on the road like we are going to. They are used to talking £50,000 poster campaigns and looking at everything in the long term. We can't afford to hype records because we simply haven't got the resources, so we just have to be better. I don't mean hype in the sense of sending a little man round on a motor scooter to buy lots of copies of the records; I mean having the money to give the retailers the incentives to promote the record. So I must listen to what the street wants; I cannot dictate to the street.

What they Want

I have to go out three nights a week to keep in touch because this type of music changes all the time. In July it was floaters, November was a-go-go, and now it is all changing again. Next it will be funk, then Motown again. Punters on the street want credible dance records. It has also got to do with the weather. Summer means dancing in the streets while in Winter everyone wants smoochy music so they can hug each other warm.'

More than slightly miffed that at the BPI Awards ceremony they were not even nominated for Producer of the Year, he says it is simply because dance music is the poor relation. This year we're going to change the record industry for them. There is a generation of kids who want pop records again, not what the records companies tell them they want. The charts are full of useless artists.

'A major thing which must change is that the record companies must become like the film companies in that they should be like banks. They're not creative, but rather they're a means to put out talented people's work. They have got to give you a project, let you do it and then put it out. If it doesn't sell then they shouldn't employ you again. The A&R guys are in the wrong environment to be creative and there are not many in this town who understand what the recording studio is and what it can do, and as a result they just waste money and time. They'd be better off losing money that way than by sending producers and bands in and out of the studio.'

Peter was recently elected as a member of the APRS Producers Guild ('More by default than anything else I think!') and at the time had not actually attended a meeting. They will certainly know about it when he does!

'You have people producing records in this town for free; for 5%. Good grief! It's the typical wingeing British attitude. If you are not happy with A&R, do your own. Put your money where your mouth is; put your money into the industry instead of big houses and flash cars. It's no good complaining. Do it like me and you can laugh all the way to the bank.

'The thing is, nobody owes us a living. I feel very strongly about it. London has without a doubt the most talented people in the world, particularly on the engineering and technical side, and after all, every record but one made here last year, was a hit.'