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Flaxwood Guitars, Perspective of a "new" player entering the market - Rick Nelson

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Tonal Innovation Center (TONIC) hosted the second annual International Musical Instruments Seminar in Joensuu, Finland on 14th September- 16th September 2011.

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Flaxwood Guitars, Perspective of a "new" player entering the market - Rick Nelson

  1. 1. “ So You Think You Can Compete In The Music Industry?” <ul><li>Breaking into the Music Business, from the perspective of a new player in the market </li></ul>
  2. 2. “ It’s gotta be a Fender, a Fender Copy, a Gibson or a Gibson Copy”
  3. 3. In spite of their looks, guitar players are very conservative <ul><li>60+ yr. old designs are still the predominant choices for guitar players </li></ul><ul><li>“ traditional” construction methods have changed, but not materials or body shapes </li></ul><ul><li>Guitarists are slow to accept something new or different. </li></ul>
  4. 5. Some 20th Century innovators <ul><li>Leo Fender </li></ul><ul><li>Les Paul (Gibson) </li></ul><ul><li>Paul Bigsby </li></ul><ul><li>Ned Steinberger </li></ul><ul><li>Grover Jackson </li></ul><ul><li>Trevor Wilkinson </li></ul><ul><li>Floyd Rose </li></ul><ul><li>Bob Taylor </li></ul><ul><li>Ken Parker </li></ul>
  5. 6. “ You only have one chance to make a first impression”
  6. 7. The Worldwide Web: www.
  7. 8. “ Online Revolution” <ul><li>1995: 634,000 internet sites </li></ul><ul><li>2010: 255,000,000 internet sites </li></ul><ul><li>21,400,000 new internet sites in 2010 alone… </li></ul><ul><li>Much more information is available to the consumer than ever before </li></ul>
  8. 9. Factoids: <ul><li>96.4% of M.I. retailers have a website </li></ul><ul><li>62.4% of M.I. retailers will redesign their internet sites this year </li></ul><ul><li>43.8% of M.I. retailers sell new products online </li></ul>
  9. 10. Internet Sales <ul><li>In 2010 34% of total music industry sales were made online or by catalog vs. only 9% in 1995 </li></ul><ul><li>#1: Thomann (Germany): $752.4M / €524.8M </li></ul><ul><li>Musician ’s Friend (USA) $708M / €495M </li></ul>
  10. 11. Social Media <ul><li>80.6% of M.I. Retailers now have a Facebook presence </li></ul><ul><li>42.6% of M.I. Retailers are on Twitter </li></ul>
  11. 12. Where purchases were made: <ul><li>Independent M.I. Retailers: 41.2% </li></ul><ul><li>“ Chain” Stores: 36.9% </li></ul><ul><li>Online Stores: 21.9% </li></ul>
  12. 13. Fretted Instrument Sales <ul><li>Guitars are STILL the single most popular instrument worldwide </li></ul><ul><li>2010: 2,377,310 units sold in the U.S.A.; $839M / €590M (up 2.2% vs. 2009) </li></ul><ul><li>Acoustics (1,200,831 units) up 8.2% 2010 vs. 2009 </li></ul><ul><li>Electrics (1,176,479 units) up 1.1% 2010 vs. 2009 </li></ul>
  13. 14. Guitar Purchase Survey <ul><li>Survey of over 1,100 consumers who purchased a guitar valued at €645+ during the last 12 months </li></ul><ul><li>93% male; 7% female </li></ul><ul><li>Median age: 32 years old </li></ul><ul><li>Median Income: €43,700 </li></ul><ul><li>Owner ship level: 2.9 instruments ea. </li></ul>
  14. 15. Guitar buyers are willing to sample a variety of retail formats: <ul><li>Online retail stores </li></ul><ul><li>Chain stores </li></ul><ul><li>Independent retail stores </li></ul>
  15. 16. Guitar buyers remain highly price driven <ul><li>90.9% of online buyers said “low prices” were extremely important to them </li></ul><ul><li>49% of online buyers were “very satisfied” with their purchase </li></ul>
  16. 17. The €¥£$ have it… <ul><li>“ We don’t make a lot of money in the music business, but we sure don’t make a lot of money” </li></ul>
  17. 18. “ Who IS that masked man?”

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