Guitar Lessons by Chip McDonald - Guitar Isn't Dead, the Music Manufacturers Goofed

Monday, July 31, 2017

Guitar Isn't Dead, the Music Manufacturers Goofed

 I had an epiphany on the now tired fake-news Washington Post "Electric Guitar is Dead" a moment ago.  An angle I don't think anyone has thought of or noticed. 

 Music manufacturers have goofed up.

 "Music retail", like most things in 'Murica, is a bit of a capitalistic lie.  Entrepreneurs don't get to actually compete on a level playing field; the "field" has always been mini-monopolies.

 Even before the Guitar Center holocaust music retail was based on protected dealer regions.  In order for a store to carry a line of instruments, they had to "get" the dealership by buying an enormous quantity, or agreeing to do so, provided no other store "in the area" had not already captured it.

 This favored the manufacturers of course, they wanted it this way.  The funny thing is that while it probably seemed safe to them, they had guaranteed orders every year, it also meant dealers were not incentivized to sell mass quantities.  There were pluses and minuses to this scheme. 

 During music retail's idealized peak, you had a number of healthy music stores in most 3rd tier cities.   The larger stores could discount more in general, the smaller stores could dare to cut prices more.  This provided the illusion that "capitalism" was going on, while big manufacturers were selling micro-monopolies. 

 Which was fine, at least there was an industry, people were employed, products made and sold.

 Then the retail holocaust happened.

 I was amazed the FTC didn't step in and stop it.  By the time I had convinced the owner of the music store I worked at that internet retail was the future, it was probably already too late.  Big manufacturers had already made their agreements with Guitar Center/Musician's Friend; you couldn't advertise prices online, you couldn't sell outside your region.

 But GC/MF could.

 I instantly knew what the end game of this was going to be, and surely I wasn't the only one.  Here we are, decades later, and local music stores try to hang on in the face of the Empire. 


 As I mentioned above, you had healthy music retail in 3rd tier cities.  Not struggling to survive 2nd tier retail, but established, employing a good amount, 'Murican dream independent stores. 

 Now, while I'm sure most people in the music manufacturing industry would say "well, of course all of that is gone now because of Guitar Center sucking out their business - the gross sales are the same", I think they're missing a very big element.

 I would liken 2nd tier music retail now to the way 3rd tier stores operated in the 80's, 90's.  They can sort of afford to carry a few lines, a bargain-one brand for everything (Peavey or Behringer).  For the healthier stores, they can maybe carry a "boutique" line, partially; Mesa Boogie or maybe DW, the minimum order. Which they'll now sit on for more than one sales cycle.

 Here's the relevance: back then, in a 3rd tier city, a person could travel 30 minutes to the 2nd tier city, and probably have access to being able to try out effectively "everything".

  Music manufacturers didn't have the Mart of Wal GC/MF outlet to sell the bulk of their production.  They had to spread it around to all of the different stores. 

  So there is a new problem.  This just occurred to me, because a student of mine asked me about a new amp that has come out recently that has an extreme amount of hype.  I told him I haven't tried it so I don't really know first hand what it sounded like.

I had attempted to try it at a Guitar Center in D.C..  They not only didn't have it, the floor model of another amp I tried out along similar lines was missing the power cable.  The employees didn't know or care where it was; in turn the GC appears to be going out of business.

 In my own town upon putting my local zip code in the "Find a Dealer" field on a number of music manufacturer's web sites, my suspicions are confirmed that in order to try said amp out one will probably have to take a day to drive to a 1st tier city.  Same goes for the other 2 or 3 competitor's products. 

 In the case of my student, he's even less motivated than I am to research first hand said product.  Effectively it's invisible.  Yes, there are dozens of YouTube review videos, and he can of course order said product from Guitar Center.

 But he's not, he's hanging onto his money.  Any chance of a sales pitch, in person excitement, hands-on sales experience is gone.  Because, the Faustian bargain has made it so.  The music manufacturing industry has decided to throw away 2nd and 3rd tier brick and mortar markets. 

 Sure, it still sort of exists.  But not likely it used to.  They've injected an entropy into the whole business of "music" with this scheme - which isn't helped by the "music is free!" MP3 phenomenon. 

 I get that manufacturers are not going to rebel against the Evil Empire.  It's really the government's fault for not stepping in when it was happening as a regulatory agency.  It's done. My point is that the dilution of the sales environment doesn't not automatically get taken up by online sales; and the resulting loss of in person sales in these 2nd and 3rd tier regions means you risk de-enervating the whole thing.  It could be that in the long run, just as music production has shown it doesn't need large studios anymore, it may not need large manufacturers anymore.

 It's a lot easier to sell something to someone when they're holding it in their hands. 


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