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The Interrelationship of The Global Musical Instrument Market, the Scarcity of Tonewoods, Climate Change and NFC’s.TONIC<b...
The Global Musical Instrument Market<br />“Recession proof” at one time.<br />No longer – video games, etc.<br />From 2008...
MUSICAL INSTRUMENTS<br />Electronic & Acoustic Guitars<br />Violin Family Stringed Instruments<br />Strings for the Above<...
GLOBAL MUSIC PRODUCT SALES<br />2009		$15.1, €104, £9.43 Billion<br />2008		  17.5, 12.1, 10.9<br />2007		  18.2, 12.6, 11...
THE WORLD ECONOMY<br />In 2009, world economy shrunk by 2.4%<br />Worldwide MI sales down 13.7%<br />Largest decline EVER!...
MARKET SIZES<br />US – 40.5%  of the World Market<br />2010 - $6.392, €4.4, £3.99 Billion<br />2009 – 5.91, 3.17, 3.7<br /...
THE TOP 7 MARKETS IN THE WORLD<br />US		2009 -  $5.9, €4.1, £3.7 Billion<br />		2008 -    7.13, 4.91, 4.5     -17.5%<br />...
SALES BY AREA - 2009<br />North America		$6.6 billion			-17%<br />Central America      154 million		-11<br />South America...
FINLAND’S M I SALES<br />2009 $68.8 million, €47.4 million,£43 million<br />Down 8.1% from 2008<br />$13.10 (€9.00, £8.20)...
CHINA- 2009<br />$933, €643, £583 million<br />$.79, €.54, £.49 per capita<br />Large, wealthy middle class, BUT…<br />
SOURCES<br />World Trade Organization<br />Public Company Filings<br />The Global Report doe not include the Middle East, ...
THE BEST PERFORMING MARKETS IN 2009<br />India			+4.4%	$66, €45.5, £41.25 million<br />Brazil	+1.1		  209, 144, 131<br />C...
WORST PERFORMERS - 2009<br />Greece	-27.6%	$25, €17.2, £15.6 million<br />Ireland	-24.4		  27.2, 18.8, 17<br />*UK		-22   ...
WORLD’S LARGEST M I, AUDIO COMPANIES & DISTRIBUTORS -2009<br />Yamaha		$4.322, €2.981, £2.701 billion<br />Roland	  		921,...
CHINA’S FACTORIES…<br />Many closed in 2009<br />Inefficient, rising labor & operating costs<br />May cause shortages in f...
INTERESTING STATISTICS<br />Not everyone can live like an American/W European!<br />M I prices have dropped in past severa...
MORE INTERESTING STATISTICS<br />US has high GNP/Capita, this & age = good market<br />Europe’s low birth rate = graying p...
EVEN MORE INTERESTING STATISTICS<br />Global M I sales represent a potent argument for the benefits of free trade…<br />To...
ARE WE THERE YET?(MORE STATS)<br />Every 225 company does business with at least one other 225 company<br />Many of the 22...
CHINA’S STRINGED INSTRUMENT OUTPUT - 2010<br />STRINGED INSTRUMENTS (VIOLIN FAMILY):<br />Violin/Viola	808,808 (92%)<br />...
CHINA’S 2010 GUITAR PRODUCTION<br />Acoustic		3,977,243 (83%)<br />Electric		669,436 (14%)<br />Other (?)	89,365 (1%)<br /...
DEFORESTATION<br />What is deforestation?<br />At one time, almost 1/2 of the US, ¾ of Canada, ½ of Europe, the Plains of ...
Deforestation<br />For millennia humankind has influenced the forests, impact was minor<br />Today, the impact is enormous...
THE IMPORTANCE OF FORESTS<br />Provide wood for cooking<br />Building materials<br />Furniture, paper, cartons<br />Non-Wo...
FORESTS HARBOR TREMENDOUS BIOLOGICAL DIVERSITY<br />New crop varieties & medicines<br />Less than 1% of tropical plants ha...
LOSS OF FORESTS<br />Tropical forests once occupied 6,177,600 square miles; only about half remain<br />It’s estimated tha...
FOREST MANAGEMENT & RECOVERY<br />Deforestation has slowed over the last 10 years<br />Still 19,730 square miles a year is...
CLIMATE CHANGE<br />World’s forests play an important part in climate change mitigation.<br />Forests store a vast amount ...
MUSICAL INSTRUMENT WOODS<br />Account for less than 5% of world consumption<br />Many tonewoods are impossible or very dif...
ALTERNATIVE WOODS<br />Nyatoh: a non-threatened hardwood; necks<br />Paulownia: sub for mahogany, grows from sustainable r...
THANK YOU VERY MUCH!<br />Neil Lilien<br />RS Berkeley Musical Instruments/USA<br />
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Mi Industry Update - Neil Lilien

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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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Mi Industry Update - Neil Lilien

  1. 1. The Interrelationship of The Global Musical Instrument Market, the Scarcity of Tonewoods, Climate Change and NFC’s.TONIC<br />Joensuu, Finland<br />14-16 September 2011<br />
  2. 2. The Global Musical Instrument Market<br />“Recession proof” at one time.<br />No longer – video games, etc.<br />From 2008 to 2009 world economy down 2.4%<br />World “M.I.” down from 13.8%; $17.5 billion (€12.1; £10.6) to $15.1 billion (€10.4; £9.15)<br />School Music<br />
  3. 3. MUSICAL INSTRUMENTS<br />Electronic & Acoustic Guitars<br />Violin Family Stringed Instruments<br />Strings for the Above<br />Woodwinds<br />Brass winds<br />Keyboards<br />Percussion<br />Sound Reinforcement<br />Studio Audio<br />Software<br />Computer Peripherals<br />Printed Music<br />Accessories<br />
  4. 4. GLOBAL MUSIC PRODUCT SALES<br />2009 $15.1, €104, £9.43 Billion<br />2008 17.5, 12.1, 10.9<br />2007 18.2, 12.6, 11.4<br />2006 18.2, 12.6, 11.4<br />2005 17.8, 12.3, 11.1<br />2004 17.0, 11.7, 10.6<br />2003 16.6, 11.4, 10.4 <br />
  5. 5. THE WORLD ECONOMY<br />In 2009, world economy shrunk by 2.4%<br />Worldwide MI sales down 13.7%<br />Largest decline EVER!<br />(2010 world number available in 2011.)<br />
  6. 6. MARKET SIZES<br />US – 40.5% of the World Market<br />2010 - $6.392, €4.4, £3.99 Billion<br />2009 – 5.91, 3.17, 3.7<br />Guitar Center (WWBW, MF)<br />Most of US Volume is fretted<br />2010 $1.43, €.98, £.89 Billion 2.4 million units<br />2009 991, 683, 619 million 2.3<br />2008 1.216, .838, .760 2.8<br />
  7. 7. THE TOP 7 MARKETS IN THE WORLD<br />US 2009 - $5.9, €4.1, £3.7 Billion<br /> 2008 - 7.13, 4.91, 4.5 -17.5%<br />JAPAN 2009 – 2.1; 2008 2.55 -16.8<br />GERMANY 2009 – 989 million<br /> 2008 – 1.089 billion -8.8<br />CHINA 2009 - 933 million<br /> 2008 - 931 -.2<br />FRANCE 2009 - 718 million<br /> 2008 – 775 -7.4<br />CANADA 2009 – 660 <br /> 2008 – 776 -14.9<br />UK 2009 – 628<br /> 2008 – 805 -22 <br />
  8. 8. SALES BY AREA - 2009<br />North America $6.6 billion -17%<br />Central America 154 million -11<br />South America 331 -.1<br />Europe 4.04 billion -12<br />Asia 3.73 -11<br />Australia 329 million -6 <br />
  9. 9. FINLAND’S M I SALES<br />2009 $68.8 million, €47.4 million,£43 million<br />Down 8.1% from 2008<br />$13.10 (€9.00, £8.20) per capita<br />.5% of Global Market<br />Median age: 42.3<br />Market Rank: 25 (114th “largest” country)<br />World Economic Rank: 15 (2009)<br />
  10. 10. CHINA- 2009<br />$933, €643, £583 million<br />$.79, €.54, £.49 per capita<br />Large, wealthy middle class, BUT…<br />
  11. 11. SOURCES<br />World Trade Organization<br />Public Company Filings<br />The Global Report doe not include the Middle East, large parts of Central Asia, and Africa; there are no clearly defined distribution networks in these areas. Volumes are small.<br />
  12. 12. THE BEST PERFORMING MARKETS IN 2009<br />India +4.4% $66, €45.5, £41.25 million<br />Brazil +1.1 209, 144, 131<br />China +.2 933, 643.4, 583<br />Argentina -.07 84, 58, 52.5<br />Poland -3 47.1, 32.5, 29.4<br />
  13. 13. WORST PERFORMERS - 2009<br />Greece -27.6% $25, €17.2, £15.6 million<br />Ireland -24.4 27.2, 18.8, 17<br />*UK -22 627.5, 432.8, 392.2<br />*Russia -17.8 197.7, 136.3, 123.6<br />*US -17.2 5.9, 4.06, 3.68 billion <br />
  14. 14. WORLD’S LARGEST M I, AUDIO COMPANIES & DISTRIBUTORS -2009<br />Yamaha $4.322, €2.981, £2.701 billion<br />Roland 921, 635, 576 million<br />Kawai 688, 474, 430<br />Fender 601, 414, 430<br />Harman 493, 340, 308<br />Sennheiser 452, 312, 283<br />Shure 395, 272, 247<br />Steinway 306, 211, 191<br />Gibson 287, 198, 179<br />KHS/Music 279, 192, 174 <br />
  15. 15. CHINA’S FACTORIES…<br />Many closed in 2009<br />Inefficient, rising labor & operating costs<br />May cause shortages in future<br />So far (I) haven’t noticed any<br />Delivery times longer, depending on segment<br />Prices increasing at an alarming rate (20-60%)<br />
  16. 16. INTERESTING STATISTICS<br />Not everyone can live like an American/W European!<br />M I prices have dropped in past several years<br />US & Canada spent $19 (€13,10, £11.90) per capita; India spent $.06, €.04, £.03 !!<br />Obviously, the higher the GNP, the more spent on M I<br />Median Age in US, eg, is 36.8 vs 37.2 Worldwide – Older = Smaller Market!<br />
  17. 17. MORE INTERESTING STATISTICS<br />US has high GNP/Capita, this & age = good market<br />Europe’s low birth rate = graying population, less MI bought<br />English speakers represent only 10% of world population, but…<br />In every country polled, the guitar is the most popular instrument; same top 5 brands same in most countries<br />
  18. 18. EVEN MORE INTERESTING STATISTICS<br />Global M I sales represent a potent argument for the benefits of free trade…<br />Top 225 M I Firms (MI,Audio,Distributors) account for $18,308,836,565, €16,626,783,837, £11,443,022,855)<br />Employ 121,405 worldwide<br />Top 225: 157 (69%) are manufacturers; 50 (22%) distributors, 10 (4%) distributor/retailers, and 6 (2%) are publishers.<br />Countries with more than 10 of the 225: US (79), Japan (27), China (25), Germany (16), Taiwan (10)<br />
  19. 19. ARE WE THERE YET?(MORE STATS)<br />Every 225 company does business with at least one other 225 company<br />Many of the 225 do business outside of the MI industry: Yamaha makes bathtubs!!<br />A lot of the volume is counted twice: e.g., Remo heads appear on other company’s products, Gold Peak Electronics, D’Addario…<br />A GLOBAL MARKET ALLOWS FOR GREATER PRODUCTION VOLUMES; BETTER VALUE FOR THE END USER.<br />
  20. 20. CHINA’S STRINGED INSTRUMENT OUTPUT - 2010<br />STRINGED INSTRUMENTS (VIOLIN FAMILY):<br />Violin/Viola 808,808 (92%)<br />Cello 48,477 (5.5)<br />Double bass 24,638 (2.8)<br />Other (?) 52,771 <br />Total 934,694 770,784 (82.5%) Exported<br />Above numbers are from 9 factories<br />
  21. 21. CHINA’S 2010 GUITAR PRODUCTION<br />Acoustic 3,977,243 (83%)<br />Electric 669,436 (14%)<br />Other (?) 89,365 (1%)<br />Exported 4,001,940 or 84.5% of total<br />(Electric numbers seem low to me. Indonesia?)<br />Source: China Music Instrument(s) Association<br />
  22. 22. DEFORESTATION<br />What is deforestation?<br />At one time, almost 1/2 of the US, ¾ of Canada, ½ of Europe, the Plains of the Levant (Mideast) were forested!<br />Every year an area the size of Panama (29,340 square miles, 75,991 square kilometers disappear!<br />Some experts believe, at this rate, there may be no trees in 20, 30 or 100 years!<br />Perfect example is Easter Island.<br />The World Resources Institute estimates that only about 22% of the world’s old growth forest remains intact.<br />Today forests cover more than ¼ of the world’s total land area <br />
  23. 23. Deforestation<br />For millennia humankind has influenced the forests, impact was minor<br />Today, the impact is enormous!<br />Regrown forests differ in structure & composition from their predecessors. <br />Spruce<br />
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  26. 26. THE IMPORTANCE OF FORESTS<br />Provide wood for cooking<br />Building materials<br />Furniture, paper, cartons<br />Non-Wood: bark, dyes, fibers, gums, incense, latexes, oils, resins, shellac, tanning compounds & waxes<br />Food: Fruit, nuts, berries, Maple syrup!<br />Influence the climate<br />
  27. 27. FORESTS HARBOR TREMENDOUS BIOLOGICAL DIVERSITY<br />New crop varieties & medicines<br />Less than 1% of tropical plants have been screened for drug use!<br />Tropical deforestation contributes up to 90% of the current net release of biotic CO2 into the atmosphere.<br />Recent estimate says that tropical forests are disappearing at the rate of 38,600 square miles/year. <br />
  28. 28. LOSS OF FORESTS<br />Tropical forests once occupied 6,177,600 square miles; only about half remain<br />It’s estimated that Latin America and Asia have already lost 40% of their original forests<br />Africa has lost more than half (except the Congo)<br />Some areas of the Amazon basin are largely intact.<br />
  29. 29. FOREST MANAGEMENT & RECOVERY<br />Deforestation has slowed over the last 10 years<br />Still 19,730 square miles a year is destroyed. (These numbers vary, but situation is serious.)<br />More forests are designated for conservation.<br />Ambitious tree planting in China, India, US and Vietnam + natural expansion has added 7 million hectares (2.8 million acres)<br />
  30. 30. CLIMATE CHANGE<br />World’s forests play an important part in climate change mitigation.<br />Forests store a vast amount of carbon; when cut, the carbon is released back into the atmosphere<br />
  31. 31. MUSICAL INSTRUMENT WOODS<br />Account for less than 5% of world consumption<br />Many tonewoods are impossible or very difficult to find: Pernambuco (Brazil got its name from the tree!), Brazilian Rosewood, ebony<br />With proper harvesting , a steady supply is possible.<br />With humankind being what it is, we must be ready with sustainable substitutes!<br />There are alternate woods, but cell structure doesn’t lend itself to good sound; low end instruments.<br />
  32. 32. ALTERNATIVE WOODS<br />Nyatoh: a non-threatened hardwood; necks<br />Paulownia: sub for mahogany, grows from sustainable root stock; large leaves gobble up CO2<br />Sonokeling: fingerboards; species of rosewood<br />All above can be sustainably farmed on plantations. (Some already are.)<br />Bamboo?<br />
  33. 33. THANK YOU VERY MUCH!<br />Neil Lilien<br />RS Berkeley Musical Instruments/USA<br />

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