Tough times may have hit the record business, but sellers of musical instruments and products are humming.
“It looks like we got back to the high water mark of $7 billion in annual U.S. sales in 2002, and I’m very bullish about the next 10 years,” said Joe Lamond, president and chief executive officer of International Music Products Association, representing nearly 8,000 retailers and makers of musical instruments and products in 85 countries.
The estimated 2002 U.S. level would represent an uptick from $6.7 billion in 2001, which had fallen from the industry’s record $7 billion in 2000. The latest global figures available peg industry sales worldwide at about $16 billion in 2001.
Lamond thinks 2002 global sales will match the 2001 figures, with gains in the U.S. and elsewhere potentially offset by economic weakness in Japan, which is the No. 2 musical products market behind the United States.
To be sure, some products hit a sour note in the U.S. this year. “Conventional wisdom says that high-end piano sales have historically tracked the stock market,” said Lamond.
Piano maker Steinway Musical Instruments Inc., for instance, recently announced layoffs and a 13 percent drop in quarterly income on a 9 percent sales drop.
But while high-end piano sales have declined, sales of lower-end and digital pianos fared better, Lamond said.
Sellers of digital instruments, products and guitars, like Calif.-based Guitar Center Inc. are upbeat. The largest U.S. guitar retailer recently forecast higher fourth-quarter profit, after 2002 sales topped $1 billion.
The San Diego-based music products association, commonly called NAMM in reference to its long-running trade show, kicks off its 101st show this week, with a record 1,309 exhibitors registered.
“They say you can tell the relative health of an industry by the strength of its trade shows,” Lamond said. “In a year of challenges, more people turned to music and music making.”
BABY BOOMERS, SENIOR CITIZENS, GIRLS
Lamond said the business has benefited from moves to diversify its target audience, aiming at new demographics like aging baby boomers, senior citizens, pre-schoolers and girls.
“A few years ago, a guy with a tie would walk into a store and be ignored by the clerk who was helping the long-haired guy playing ‘Stairway to Heaven’ on the keyboard,” said Lamond.
“Meanwhile, the guy with the tie was the one with the gold card,” Lamond said.
By diversifying, retailers are “no longer at the whim of the pop music business,” Lamond said. “Guitar retailers used to bemoan the fact there was no new guitar legends to spurn sales. They were in such a vulnerable place,” he said.
This newest trend is welcome, particularly as the record industry reels from falling sales and increased file-sharing on the Web. In 2002, U.S. CD sales fell by nearly 9 percent.
In conjunction with the trade show, Elton John will get a lifetime achievement award by Yamaha Corp. at a Jan. 17 concert, featuring more than a dozen artists including Ray Charles, Brian Wilson, Norah Jones and Vanessa Carlton.