My indie band's self-produced CD cost us only $16K in 2001 (we were signed to a small label), but to be completely candid, we cut corners all over the place:
1) We dropped two tracks because the live lay down (which we used as the base for all overdubs and re-tracking) just didn't click. We recorded live over three days and we just got burnt out. If we had been signed to a major, I would have appreciated the ability to spend a whole day on each track until the vibe felt right.
2) Overdubs and re-tracking were done quickly and efficiently, but again, felt rushed in order to save money.
3) Multi-tracked vocals, guitars and percussion were sparse. We had played these songs for years (true for most "debut" albums) and it was hard to experiment in the studio without feeling we were going broke. Add a jangly 12 string playing double stops ping-ponging in stereo over the changes? Sounds great we'd tell the engineer, but we can't afford it.
4) Mixing (which took 50% of the total studio time) was painful. The permutations -- even considering the sparse tracks we had -- all begin to sound the same after a while. Ideally I'd like at least a week to mix each song: producing variations that we could collectively listen, get used to, and then debate.
So, although 500K sounds like a lot, I think the studio wants to rightfully allow the artist enough freedom to track, experiment, and mix without worrying about hitting their budget ceiling.
The studio and the band can want that but the numbers seem to suggest that it's unsustainable even at music buying's peak. I'd also ask that given that by and large it's not the studio's money (as it comes out of the advance) so is their view that significant?
I'm not saying that bands have to produce an album in three days but you could have had maybe six times the time you spent (which I'm guessing would have removed plenty of pressure and allowed a little time to experiment) and still be coming in at under a quarter of half million dollar figure which seems to be seen as reasonable. I'm guessing that If someone had said to you your budget is $100,000 you'd have been absolutely convinced you could do something that did the music justice.
The question isn't about what would be nice, we're talking about commercial realities so it's about it's about what is feasible. From the band's perspective (and it's ultimately them paying) the figures Albini and Love put forward suggest that $500,000 is a long way from it.
So, although 500K sounds like a lot, I think the studio wants to rightfully allow the artist enough freedom to track, experiment, and mix without worrying about hitting their budget ceiling.
Oh, shameless link to our CD: http://itunes.apple.com/us/album/future-perfect/id4478315