In Part One of “Incomplete Data,” published in the September issue, I introduced a problem that, I believe, our industry has not addressed. That is, we do not know the true sales of the industry. I don’t think we have even a close idea, because all the industry stats minimize or ignore “non-MI” companies that sell cheap instruments of questionable quality; all the sales, resales, yard sales and online sales of used goods (despite some attention to high-profile companies like Reverb); and the additional input of gray market and counterfeit goods that contaminate the consumer scene.
“But those aren’t real sales,” one correspondent told me. Oh, yes, they are. They represent customers buying music products, and you have to assume they are making music with them. (Well, I suppose many of the vintage guitars might just be in glass cases so they don’t get drool on them, but, in the main….)
My point is that these under-documented sales still involve music consumers, and we have no idea how many dollars they represent. Some consider these “losses” to the industry. I, however, like to think of them as potential sales we need to capture.
In the October issue, I digressed a bit, while also illustrating another example of incomplete data: We aren’t just missing the information on sales; we’re clueless about the actual number of people playing. Further, based on polls over the years, many more people want to play than are playing. It could be as much as 70 percent of the population, if all barriers to entry were removed.
Despite the fact that our awareness of this “shadow market” is largely hearsay, I don’t think anyone involved daily in the MI business believes that all players purchase music products “in channel,” or that used gear is just a speck on the charts. (Reverb’s estimate of more than $220 million in used goods this year—that number alone makes its used division one of the largest “stores” in the industry—should put that fallacy to rest.)
I also noted the recurrent reports of the “death of retail.” Although I don’t believe it across the board, it’s impossible to ignore the fact that traditional retailers are in trouble. For example, Credit Suisse recently reported that Sears’ declining sales have caused a severe cash-flow crunch…enough that it speculated the entire Sears/Kmart chain might collapse by year’s end. In the event of anchor store closings, the report estimates it would cause as many as 200 malls to close their doors across the country. Hold on to your dominoes, folks….
But, I’ve also said that the music products industry, although not immune, has strengths and advantages that might allow it to emerge well positioned for The New Normal.
What can we—retailers and manufacturers alike—do to pivot to the next phase?
Let me first state that some of our industry niches might be less affected by the upheaval. I don’t know, for example, that the high-end audio guys or the computer music companies are worried about used sales or the untapped hobbyist market. They don’t sweat over school music levies, either. That’s OK, but it does illustrate how fragmented our industry is: The audio, piano, school music, combo and print segments of our industry generally work to their own ends, only marginally engaging at points of mutual interest. I think we need to be a little more altruistic to thrive. A “devil take the hindmost” attitude might allow individual companies to survive, but it doesn’t bode well for the health of the industry.
So, for those who would be thrivers rather than mere survivors, let’s agree on a couple of points.
- The more people who play music—in any genre, at any level—the better we all are.
- We need to be “hands on” in communicating the excitement, benefits and sheer joy that making music can provide.
Sounds pretty simple, right? Nevertheless, too many of us never seem to believe number one, and number two is farmed out whenever possible. I’ve spent the last 20-plus years in print and in person railing against this lack of inclusion and initiative. So, I won’t carp about it (much) here. Rather, let’s talk about what those of us who believe the above statements—retailers and suppliers alike—need to do to monetize the potential of a nation of music makers.
I believe we need to combine the efforts of retailers, manufacturers, NAMM and any like-minded individuals in education, entertainment and government to coordinate and control the following three tasks: Market Presence, Customer Acquisition and Customer Retention. Those tasks, if well executed, can ensure a growing population of music makers, flowing in to buy our collective products and staying with music long term, even for a lifetime, while also influencing others to join in on the fun and beneficial lifestyle activity.
No, we haven’t done all this before. What has been missing most has been the coordination and pervasiveness of the effort. We’ve also regularly shortchanged our market presence, focusing primarily on school-age kids through college-age youths, effectively reinforcing the perception that adults are excluded. We’ve hitched acquisition to outside entities—from the Beatles to band directors and beyond—who have no vested interest in our success. Finally, we have made no concerted retention effort. Rather, “Bring ’em in, sell ’em and move on” has been the game plan of too many for too long. So, bear with me and read my take on the tasks above.
Market Presence: “Product placement” of music making has actually been improving over the last few years. I’ve been tracking incidents of music activity in ads, movies and television for a while now…everything from subtle (a guitar leaning against a wall in a scene) to integral (a character who appears playing an instrument) to primary (coverage of Drum Corps International on Fuse). The incidents are increasing, which lends credibility to the Gallup survey result that says seven out of 10 people wish they could learn an instrument. Designers, set decorators and writers tap into the pulse of the public. Much of that presence, then, might be the zeitgeist of the moment: a reaction from the societal mind, rather than as a result of our savvy marketing. Yet, the good news is that (it would seem) society is actually ready to hear our message.
Now, we need to increase that presence and move from simply portraying the idea of music making to building an awareness of the brands, products and businesses that make that activity possible. Today’s formula of running ads via algorithm might not be the best approach, because we want to attract the people who can be inspired to play, not just the people who search for guitars or clarinets on Google. Again, we can’t let other people—or bots—decide whom we target.
Customer Acquisition: This is a tough one, because most of us aren’t aware of how much we’re missing when it comes to adding new music makers to our family. First, let’s focus on the school market, because it’s one of the most broken of our customer-acquisition strategies.
We talk steadily about the preservation of music in our schools, and NAMM has been at the forefront of the lobbying effort. However, I wish NAMM would also expend significant effort on helping colleges educate better directors—perhaps, in part, by offering industry mentors to lecture or give seminars. The current crop of directors I see is so focused on “music as competition” that many turn away legions of students in the name of “balanced instrumentation.” Or, they shoehorn them into disappointing—and often doomed—instrument choices that do not serve the student’s interest. Just as damaging on the retail side, there is often no option for kids whose parents can’t pass a stringent credit check and who, therefore, can’t get a rental. That virtually redlines entire school systems in some areas.
This hurts our industry, folks. We need to foster maximum participation and find ways to serve the dispossessed, because school resources are stretched thin even when there is an effective teaching staff. The potential long-term loss in revenue is staggering. I’m seeing scores of kids every fall who never get in the door in my little market corner. Extrapolating, there have to be hundreds in the Cleveland OH area, thousands in Ohio and hundreds of thousands nationwide. Every year. Millions over a 10-year (or fewer) span. And that’s just the ones who don’t start. Add in the ones discouraged by poor teachers and imagine the losses—not just in one year but, rather, over each child’s school career (if not a lifetime), compounded annually. All of this, without a single program losing funding.
So, we need to be active in recruiting customers without relying on schools. The market is ripe for it, too. Right now, our two biggest growth areas in student population are age nine and under (16 percent) and adults (22 percent). Those two age brackets are completely separate from school music. They already represent almost 40 percent of our students. The six-year-old student and his family know us for years before ever meeting a band director, and the adult is there out of pure desire, not because mom is forcing the issue.
Yet, when I tell many industry people those figures, they look at me like I just confirmed a belief in UFOs, or they tell me I live in some utopian bubble that’s divorced from the real world. Nope. I’ve been seeing this develop for more than two decades. It’s not a blip in the stats. If it doesn’t seem obvious, it’s a trend missed while we wear our industry blinders. I believe those music makers can ensure our future.
Customer Retention: This is the real key. No one but us can do the job. Certainly, band directors don’t depend on students continuing to play after graduation; moreover, in a time when enrollment is good, modest attrition simply means less work. Thus, customer retention is best done in the store and in person. The relationship is what makes it happen.
That speaks directly to the “death of retail” issues, too. The one seemingly safe style of store is one that immerses the customer in an experience, whether that’s technology, sports and outdoor activities, motorcycling, etc. What’s more experiential than music? Making it…learning about it…listening to it…. If we can provide a great experience (notice I didn’t say, “a great shopping experience”), we can keep people coming in and playing. If they do that, we’ll have plenty of opportunities to sell goods and services. If they stop playing—or if they play, but stop coming in—then we lose…perhaps forever. Even the most active school player gets out of school. Programs do lose funding. Players without a venue can drift away. We have to fill the gap and keep them playing.
“Community Music” of some sort has been tried when school programs flounder. In those times, creative dealers have stepped in to preserve both music and the market. I think we need more community programs regardless of whether the school systems are strong. Just as we have soccer leagues, dance programs and, lately, a growing number of maker/technology academies separate from (but not competing with) school programs, we need more non-school music programs. However, we need them for all ages, styles and instruments. And, if they aren’t run by the dealer, the dealer should have significant sweat equity in them, rather than just skimming sales off the attendees. The relationship should be one where both parties feel they’re getting a real benefit.
We have a history of innovation when faced with disruption. We pivoted when radio killed the player piano. We weathered the transition to talking pictures that put theater orchestras out of work. We created the school music market ourselves to fill the void. We managed to keep our doors open during World War II even though new instruments couldn’t be made. We served additional markets when Elvis and the Beatles made rock ‘n’ roll pervasive. Through all those disruptions and every one since, we’ve come up with new ways to help people make music.
As I’ve said, we’re at a crossroads. If your business is doing great, you might not feel the need to change. However, I believe there is more business in the wings…enough almost to double our size. With that large of an increase, perhaps we can simply do our jobs well and prosper, rather than attempting to throttle the competition to gain a larger slice of a small pie.
Of course, if you don’t like newbies, different musical styles or the full spectrum of humanity as your customer base, this might not appeal to you. It certainly stopped the people who thought rock ‘n’ roll was just a fad.
But I hope we’re smarter than that today.