"How do you wind up with a million pounds in the music business?", runs the old joke. Answer? You start with two. That's certainly been the experience of many studio owners in the past decade or so, as the march of the private production suite has continued to lay waste what was once a thriving industry. It's easy to count the names no longer with us but, enjoyable as it can be to wallow in misery (especially when it isn't ours), it is possibly more instructive to realise there are people out there who have made a success of running recording studios and even one or two who have managed it in the centre of our great cities where, the doomsayers tell us, musicians no longer congregate like they used to and costs are prohibitive.

London's Sphere Studios is a fine case in point. Opened as recently as 2001, Sphere rapidly established itself as the trendy place to be - not in itself a small feat, but also one that several other studios have managed in the past, only to run out of puff by year two - and worse thereafter. And that is what Sphere didn't do. It quickly hit its stride and seems to have maintained it, with a client list that in 2004 alone included Elton John, Eric Clapton, Gary Moore, Razorlight, Duran Duran and Supergrass. Oh yes - and it is also by royal appointment to Queen.

No small part of that success must be down to its choice of MD, veteran British studio chief, Malcolm Atkin. When you set sail in a stormy sea, it helps to have at the helm someone who has been around the bay before and few are better qualified than he, having worked with Sir George Martin at Air for over 20 years and being director of the APRS Studio Group.

Sphere's location is the first unusual thing about the place - nestled down almost bunker-like, a low, flat entirely unostentatious building, slap-bang in the middle of a labyrinthine 1960s housing estate, just a few streets away from the south side of Battersea Bridge. It has to be admitted that, the first time you visit, Sphere isn't easy to find. But once you know your way, it does have the advantage of being gloriously anonymous and there's plenty of room to park. Superstars are unlikely to be hassled when they go to work at Sphere and if they really live up to the name, they can even get there via Battersea Heliport, which is just round the corner. Or, more probably, Clapham Junction station, which is a few streets away. Convenient, it most certainly is.

Settled in Malcolm Atkin's almost absurdly modest office, I began by asking him the inevitable "How on earth?" questions about how they found the building, followed by the even more important "Why on earth?" one, about why they thought they could make a top-flight commercial studio pay in this day and age. The "they" aspect will be explained later.

'After I parted company with Sir George Martin in 1999, I came across the people here, who had just bought this building and were putting a studio in it. They'd run into some trouble with planning consent and I came along originally as a consultant to help them through that process. I looked at the building and saw pretty quickly that, though what they were doing to it wasn't properly thought-through, the building itself was very good. So I spent six weeks with them making recommendations, wrote a report and went away for a month on a holiday. I travelled round the States, got back in the Autumn and they called me up and asked me if I'd like to come and work with them. So we sat down for anther three or four months, worked through the figures and it all stacked-up.'

So who are "these people"?

'They're not known in the music business, but they have a lot of passion for it and my partner in Sphere, Francesco Cameli, was the main driver behind that aspect.'

Francesco Cameli is an interesting character. Though still fairly young, he studied bass at Berkeley (apparently he is a very gifted player) and is now not only Malcolm Atkin's business partner in Sphere, but also the company's creative director, actively involved in the project as an engineer and Pro Tools operator. Indeed, it turns out that it was he who originally acquired the building, intending it to be his own private studio, before realising there was potential for more.

'The building was originally a laundry, which meant it was designed with incredibly good foundations. It had a water tower in the middle which held something like 40 tons of water which will give you some idea of what the foundations are capable of. This meant we could do a double shell structure, which is usually needed in an urban environment, but which in effect means you are building another concrete building inside an existing one. It's been extremely effective - it's very quiet here - but it does require a building with very good foundations to do it. Either that, or you have to demolish and start from scratch - including the foundations'

The acoustic design was undertaken by Andy Munro, 'With a lot of interference,' Mr Atkin adds with a laugh. That interference arose because the Sphere team had begun with a very clear idea of what they wanted to create - having gone through no fewer than nine different design plans before they were satisfied. Aside from a great live sound (a reputation they quickly won and are particularly proud of), this included a machine room central to the entire complex of three studios and satellite production suites.

'That was actually one of the main criteria and it had to be physically central to the building, not only because people have to be able to walk there easily, but also because some of the cable runs will only work over distances of 2-300 metres.'

The main reason behind the decision to opt for a central machine room was the realisation, as the studio was being planned, that we were on the brink of a revolution in the role of computers.

'It was pretty obvious, even in the year 2000, which way it was going, but the trouble with Pro Tools at that time, was that everybody was treating it like a tape machine, which meant putting it in a box and wheeling it about. But you wouldn't think of doing that to a computer - it's got tons of very delicate, high-speed connections in it and as a result of that Pro Tools had a reputation of being pretty unreliable. It seemed pretty obvious to me that you had to bolt it down in an air conditioned room and leave it there, which was what we did and which has paid dividends. We hit reliability with Pro Tools probably before most other people and it wasn't through rocket scene, it was because we weren't moving it around.'

The first big choice, having established the acoustics and machine room philosophy was the choice of desks. Francesco Cameli had already bought a Euphonix CS3000 for himself (it now lives in Studio 3) but how had they selected the other two?

'With a lot of angst. The Euphonix was a given, but the other two were the toughest decision. Obviously, I had everybody and his brother coming to me with a pitch and in the end I suppose the classic combination was inevitable. Once we'd made the decision that we were a commercial studio, then we couldn't afford the luxury of being idiosyncratic - you've got to go with what the market is saying to you and to my knowledge it was "record on a Neve - mix on an SSL". Funnily enough, at the time we started out we had in mind two SSLs, because Neve at the time had the VR machine, a very tired format, which had been out 17 or 20 years and which wasn't a particularly well thought-out system. But just as I was about to sign on the dotted line I got dragged out secretly and shown a Neve 88R and it was a no-brainer, one of the best decisions we've made here, a wonderful piece of kit - all the stuff a manufacturer would love you to say about it.' The original choice was maintained for Studio 2, meanwhile, an SSL J Series.

'The toughest choice was had to make was whether to go digital. Everybody thought we were going to do it and I did toy with the idea, but I'm glad I didn't. These old analogue consoles, certainly that 88R, I can see being a classic even though it's only five years old.'

The choice for the toy rack was also very much dictated by the market's favourites - that and budget. Mr Atkin admits he would have liked to have added a few valve antiques. But then again: 'That said, though I would love to have some, there is an issue with old pieces of equipment if you try to use them in a commercial studio - they can be too unreliable. You're asking an old age pensioner to work it's arse off and it can't. I've had this in the past with things like the valve 47. Every valve 47 sounds different and they're delicate. When we were using them, it usually meant we had to go out and rent another one because ours had failed, so in the end I was saying, "just tuck that microphone away - don't tell them we've got it". Here, we bought some modern, high quality valve mics like AKG C12 VRs and the Sony 800, which will give you the even-order harmonic distortion you're looking for and the compression, but which don't give you the reliability problems. Maybe I'm a grumpy old man, but I don't really think there are that many people out there who can really tell the difference between an old 47 and a properly made, modern valve mic, used in the right way.'

There follows a long and interesting discourse on the merits of respective valve microphones, which is illuminating for reasons both obvious and less so. The obvious is because Malcolm Atkin is a man with a lifetime's experience spent at the highest level of sound recording so he knows whereof he speaks. The less obvious, because it shows that he let his head rule his heart when deciding where to take the new venture.

So there they were, in 2001, all ready to roll with a gigantic investment in a troubled market. Wasn't it about the worst time to open a top drawer recording studio in the past few decades?

'It didn't look like that five years ago, when we started this,' he says, only a little ruefully. 'Studios were changing at that point, but I don't think anybody then would have seen what was about to happen. What I was looking at at the time, though, was that there's always room at the top. I wouldn't have wanted to do this unless I thought I was going to take on the best there is in this business and do it properly. There wasn't any point on building a mid-range studio.

'A lot of the black art has gone out of studios now, so a complex like this now has to look at itself and see how it can offer, to use a a phrase I came up with in one of our production meetings recently, "what we can't do at home". It doesn't have the slick marketing ring to it, but it's the truth. We have to look at all the things that you can't do with a Pro Tools rig, that you can't do at home - like record ten people in your bedroom, and you can't record strings, you can't get a great live drum sound, you can't do proper 5.1 mixing, you can't do masters. When you stop to think about it, there's a lot that you can't do at home, so that is what studios like Sphere have to concentrate on and we're finding it works that way. It does mean more film work, for example, but there's also a resurgence of band work, where people need a reasonable space, for example with Razorlight and Duran Duran, which were ongoing for weeks and weeks at a time.

'One important thing that a commercial studio can offer that production room can't is a deadline delivery, through being able to put people onto a job, some serious talent, when something needs to be finished, now, today.

'You never want to lose sight of the fact that we're in a fashion industry and the moment something becomes "the way of doing something" is the time it's about to change, which means as soon as you say live recording is dead - it's all about computers, someone comes out with a huge album which is obviously live recorded, with all the warts left in it and we love it because of that. We're starting to see that resurgence of live recorded bands now, which means that places like this will become more and more in demand, particularly where a job needs to be done within some kind of time limit.'

This raises the spectre of record companies, and their willingness (perhaps ability on some cases) to fund the sort of lengthy projects required to make traditional Rock albums. It turns out that, at this atmospheric level, record companies are not always the ones making the purchasing decision.

'Funnily enough, most of what we do is not driven by record companies, it's driven by artists' management and I presume what is happening is that budgets have already been set by that artist's manager and they are out there afterwards, selling that product to the record companies, so quite often now we're finding we are one stage removed from the record companies. Certainly, when you look at bands like Duran Duran and Queen, that's the way it works.'

So how do you sell a service like that?

'With any bespoke business like this, you can't do in your face direct marketing. It is by reputation - you're as good as your last job and it's not so much the record companies that you're marketing to as the record producers. They are the independent go-betweens and there's always been a slightly uneasy relationship anyway between studios and record companies. They pay our bills and yet quite often they didn't have much control over what the bill was going to be, or how the bill was being run-up. We do work closely with them, of course - you have to - but a lot is still down to the independent producer and that's a matter of who you know and who will trust you and I've been very flattered by some of the people who have come through the door since we opened.'

Another area of work is the film business which, despite constant predictions of its demise in this country, somehow struggles on. 'I'm not in the epicentre of it now, not having a large orchestral stage, but there are still movies being made in this country and that means there's film work around. Though the big orchestral stuff needs a big room, there's a lot of overdub, remix, preparatory and post work, all of which needs assembling - and assembling to deadlines, which calls for a very professional outlook to deliver.

'There's a wide variety of work we do these days. For example, we've just done a film called The Constant Gardener, with music by Alberto Iglesias, which stars Ralph Fiennes. We've just done a DVD with Will Young, Queen are coming in through the Summer, so, yes, there's a reasonable amount of work around.'

One of the reasons Sphere got off to such a start must have been the team assembled by Malcolm Atkin and his partners and the company's understanding that it is people who make a studio - not equipment.

'Marketing in this business is about one on one - it's about carefully targeting the people you want to talk to and building on your successes. It's like a web. I can remember how it started, with one of the first jobs we had, for Genesis, which was with Nick Davis, a very good friend. Then Nick introduced me to the Queen boys and the next thing you know, we're doing Queen.

'If I were to say to you "come and use my studio" you'd think, well he's just one of 20, but if one of your peer group says "go and use him, he's good", you pay attention. And it works the other way around, too, so the console manufacturers bring their prospective customers here, because they know people will listen to us more than the makers.

'It's also why we do as much press as we can. People like to read about what's going on and the same approach applies to our website, which we pay a lot of attention to. Simon Bohannon is in house constantly, looking after H2O, which covers all our broadband and IT needs, and he constantly keeps the website up to date. We try to get something new in there every week - it has to be at least 20 times a year and people remark on it. There's nothing worse than putting a website in your favourites and seeing it hasn't changed for weeks.'

Resurgence in the Rock market there may have been in the past year or two, but no one is likely to be able to build their entire business on it, these days. Which is why a shrewd operator like Malcolm Atkin has also made it his business (quite literally) to work on the film and DVD markets and that led to a recent development where Sphere has joined forces with DVD company Isonic, the two combined offering a one-stop shop for DVD work to clients. Tom Astor, formerly of Orinoco, and Ray Schulman (remember Gentle Giant?), established Isonic five years ago and have some prestigious credits under their belts, including work for Queen, Genesis and Phil Collins.

'We'd done several projects together and eventually decided it would be best to join forces. It's still two companies, and we're pitching it as "Isonic + Sphere = DVD". They do all the authoring, which is a bit of a black art, to make a package that people want to buy and we're handling the 5.1 mixing.

'We were finding that trying to promote 5.1 mixing on our own was just too specialist and that increasingly we were being told that we needed to offer a complete package. That's what Isonic were finding as well - they needed the studio side - so now we are able to offer a complete package. You bring us the raw footage and we'll do the whole thing, including all the research that is very important to put together a package. Particularly for a management company, being able to find a supplier who can offer you the entire process is very appealing.'

Another string to Sphere's bow has been the result of the early decision to offer production suites to producers who want a halfway house between a home studio and a full studio room. Last month we interviewed veteran producer Chris Kimsey, who is one of several major independents to found a home at Sphere.

'We've got six rooms here in addition to the main rooms and the decision came from realising it was the way the market was going. I'm a great believer of giving the customer what they want, rather than trying to tell them what's good for them, and I could see that if I had the right group of people with us, it would form a community. There is only so far you can take a production in a small facility - you are going to need a big room to finish it off and that has been how it has worked. We've got a pretty varied bunch, with Chris Kimsey, Pete Vitesse and the Duranies, who have their own room here. We also have Guy Farley, who's done a lot of movies and is a very busy man and Craig Dodd, who has another of our suites.

The attractions for a producer/writer are obvious. The reality of working at home, for all its attractions, says Mr Atkin, can be hard, with constant family interruptions and, as he delicately puts it: 'Some of the people you have to work with, you may not wish to bring into your domestic environment. But beyond that, this place is a community and there's a lot of hand-holding. People help each other out, they have technical services, reception, business contacts. They hire a bare, white room and equip it as they want - though that isn't quite as bare as it sounds. They are all acoustically treated and they are all wired into the central machine room. The way the studio is wired, we can bring the Pro Tools systems in their rooms straight up on the desks in the main studios - which is very elegant.

'But it's a changing business and the only way a commercial studio will survive is by keeping at least half a jump ahead. What we've seen is the consumers going backward to MP3, while the studios were going forward in terms of quality. The consumer has gone in a different direction to the product and something's got to give. Maybe the consumer is going to ask for something that we haven't foreseen? You always have to keep an eye on hat is happening.'

By keeping a tight, integrated team, watching for new openings and, perhaps above all, working hard on the human connections, which have always been the key to an individual studio's success, Malcolm Atkin has guided Sphere through some distinctly troubled waters in the recording business. As much as the quality of the music recorded by the facility, that's quite an achievement.

Ends.