|Title:||United States acoustic guitar, electric guitar, ukulele, and bass sales in unit volume percentages for 2009 and 2010|
Start of full article - but without data
SHIFTING PRODUCT MIX
Product Types By Unit Volume
Acoustic Guitars XX.X% Electric Guitars: XX.X% Ukes: XX.X% Basses X.X%
Acoustic Guitars XX.X% Electric Guitars XX% Ukes: XX.X% Basses X.X%
Guitar Average Retail Selling Price $XXX
Note: Table made from pie chart.
Reversing two years of steep declines, music products sales advanced X.X% in 2010 to $X.XX billion. Although still well below the peak levels set in 2005, the increase was enthusiastically received as a signal that the hard-hit economy was finally starting to mend. Results among the discrete product groups that make up the industry varied dramatically--sales of portable keyboards surged XX%, while the school music business was essentially unchanged, and the karaoke market suffered a X% decline--nevertheless, there was near universal agreement that the worst of the recession was over. Yet even with conditions improving, the aftershocks of the precipitous sales drop that began in late 2008 are still evident. Manufacturers and retailers at every level continue to operate with heightened caution. Having been largely taken by surprise by the suddenness and scale of the recent sales declines, most remain reluctant to make long-term capital plans, all continue to vigilantly manage inventory and expenses, and one of the most frequently asked questions is "will there be another downturn?" The speed of future expansion depends to a large degree on how quickly this caution gives way to confidence.
WHERE THE DOLLARS GO
Retail Sales Value By Major Product Groups In Millions Of Dollars
2010 2009 2008
Fretted Instruments And Related Products $X,XXX $X,XXX $X,XXX Pro Audio & Related Products $X,XXX $X,XXX $X,XXX Recording Products $XXX $XXX $XXX Print Music $XXX $XXX $XXX School Music Products $XXX $XXX $XXX Percussion $XXX $XXX $XXX Pianos $XXX $XXX $XXX General $XXX $XXX $XXX Electronic Music Products $XXX $XXX $XXX Portable Keyboards $XXX $XXX $XXX DJ Products $XXX $XX $XXX Organs $XX $XX $XXX Karaoke $XX $XX $XX
Note: Table made from bar graph.
TEN-YEAR INDUSTRY SALES TRAJECTORY
Retail Sales Value In Billions Of Dollars
2001 $X.X 2002 $X.X 2003 $X.X 2004 $X.X 2005 $X.X 2006 $X.X 2007 $X.X 2008 $X.X 2009 $X.X 2010 $X.X
Note: Table made from bar graph.
The data in this report reflects the value of shipments to retailers, rather than actual retail sell through. Consequently, we estimate that roughly half the X.X% increase was due to retailers restocking depleted inventory, with the other half reflecting improved sales activity at retail. This performance closely mirrors macro retail trends. The U.S. Department of Commerce reported that total retail sales advanced X.X% in 2010 thanks to modest improvements in consumer income and higher confidence levels. Data compiled by the Federal Reserve present a similar picture of an economy on the mend. Consumer finances continue to strengthen, with debt levels trending down and credit card and mortgage delinquencies shrinking, all of which bodes well for the industry's near term revenue. Changing technology and demographics play an equally important role in driving industry sales, and the picture there is mixed.
In the digital realm, the prices of memory and processing power continue to plummet. As recently as 2007, a X gigabyte memory card retailed for about SXX. Today, $XX might easily buy XX gigabytes of memory. The price of processing power has experienced similar declines. For the music products industry, these drops have fueled price deflation, while giving rise to entirely new product categories. Thanks to cheaper, more powerful components, today's $XXX keyboard has better capabilities than a five-year old unit that retailed for $X,XXX. The same dynamic holds true for recording products, tuners, electronic drums, effects devices, and everything else that contains a bit of silicon. This technology is unquestionably driving prices down.
Over the past decade, as the personal computer became the focal point of most recording systems, sales of dedicated "outboard" music hardware suffered. This trend continues and is taking new turns with the advent of tablets like the iPad, which are increasingly being used as control surfaces. Will this new technology fuel sales growth by providing consumers a reason to upgrade? Or will it compress sales by accelerating the deflation? Time will tell.
While digital priced goods are slated to decline in price, traditional instruments are poised for significant price increases in the near term. The prices of all metal commodities have surged as much as XX%) in the past XX months, and Asian labor prices are also on the rise. Taken together, these trends will mark the end of price declines in traditional instruments and audio gear. Scarcities of prime tone woods and increasingly restrictive regulations are also destined to be reflected in higher prices on fine guitars, violins, and pianos. Again, will rising prices boost top-line growth? Crimp unit sales? Some combination of both? Again, only time will tell.
The role of demographics is a bit more clear cut. The industry's largest customer group remains the XX-to-XX-year-old demographic. After increasing an average of X.X% a year between 2000 and 2009, the U.S. Census reported that the age group contracted by X.XX% in 2010, and will post similar declines for the next two years before turning up again. In actual terms, this represents a reduction of about XX,XXX potential customers--pretty insignificant, given that the age group numbers more than XX million. Nevertheless, the lack of expansion deprives the industry of a potent driver of growth.
The music products industry is something of a misnomer. It is really a collection of separate industries that are loosely tied together by the process of creating, amplifying, and recording music. In the following text, we detail the prime factors that have shaped the sales trajectory of each industry subgroup, and each product grouping has a different story.
Includes: acoustic and electric guitars, basses, ukuleles, amplifiers strings, and guitar-related effects.
THE RETAIL VALUE of guitars edged up X.X% in 2010, lagging the total music products market. Despite the comparatively tepid performance, the guitar remains the dominant musical instrument by any measure, posting unit sales of X.XX million with a retail value of $XXX.X million. The market was paced by acoustic guitars, which posted a X.X% increase in retail value to $XXX.X million. Electric guitar sales declined X.X% to $XXX.X million. The average selling price of guitars dropped X% to $XXX; however, the decline represented a shift in purchasing preferences rather than an actual decline in retail prices. Although high-end products (valued at over $X,XXX) fared reasonably well, value-conscious consumers gravitated towards lower-priced products, pushing the averages down. The $XXX to $X,XXX price points were particularly hard hit. The industry's top manufacturers accelerated this transition by introducing feature-packed products in the $XXX-$XXX range, designed to appeal to frugal customers.
The industry's relatively modest uptick appears to be the result of shifting musical tastes, and the lingering effects of the recession. Over the past XX years, growth in the guitar market was fueled by the entrance of new players and an increase in multiple guitar ownership. A 2010 Music Trades consumer survey found that purchasers of guitars valued at over $XXX on average owned X.X guitars. It would appear that the current economic climate has deterred owners from adding to their collection of guitars, thereby depressing sales. On a more encouraging note, the continued robust sales of low-priced instruments would indicate that the instrument continues to attract new players.
The stronger showing in acoustic guitars is most likely a reflection of changing musical tastes. In 2010, country music acts, armed with twanging acoustics, appeared on the Billboard Top XXX charts with nearly twice the frequency of rock and metal bands. One electric guitar maker who noted this disparity despaired, "we could use a guitar hero sometime soon."
Given that vintage instruments continue to command astronomical prices, and that the top-selling instrument styles have been on the market between XX and XX years, it's safe to say that the guitar market doesn't benefit from a "technology refresh" cycle. The same can't be said for amplifiers and effects. The economy, along with the changing musical styles, took a toll on the sale of high-end tube amps, and prompted a shift from large stacks to smaller (and less expensive) combos. Continued improvements in modeling technology also drove the transition away from tube amps to digital alternatives. Retailers report that a new generation of buyers is relatively oblivious to the distinctions between tubes and digital technology, and willingly gravitate towards the more versatile, higher-value modeling amps.
A continued flood of new models and comparatively low selling prices explain the strong showing in the guitar effects category. Multi-effects devices were up XX.X%, while stomp boxes posted an X.X % increase. Guitarists looking for a new sound, but unwilling or unable to buy a new guitar, were happy to buy a new effect. It would also appear that a player can never have too many effects. Retailers capitalized on this trend by boosting effects inventory and giving it prime in-store real estate. As one effects manufacturer observed, "The business is driven by the fact that the guitarist's idea of the 'perfect tone' changes every six months."
Guitar Unit Volume By Retail Price Point
2010 % 2009 % 2008 % Change Change Change
Up to $XXX XXX,XXX XX.X% XXX,XXX -X.X% XXX,XXX X.X%
$XXX to XXX,XXX -X.X% XXX,XXX -XX.X% XXX,XXX X.X% $XXX