Guitar Lessons by Chip McDonald - Secret Music Retail Disaster Looms: Peak Guitar?

Tuesday, October 23, 2018

Secret Music Retail Disaster Looms: Peak Guitar?

 After examining many videos of the literally hundreds of guitar factories in China, and seeing thousands of guitars stacked in each, I wonder "where do they all go...?"

My '82 Japanese made Squier Strat bought used in the 80s.  "Entry level" in 1982, now "vintage-quality". 

 Obviously somewhere, the world is a big place.  There are countless "developing country" export markets.  But I'm going to limit this discussion to "here" in the U.S..

 I've referenced "peak guitar" previously, but not in this context. Solid body guitars have been built routinely en masse since the mid-1930s.  I don't have production numbers, but let's say the "modern era" began with the Stratocaster in 1954. 

 There has never been a "guitar shortage" relative to demand.  So consider that demand was met every year since 1954.  Almost 65 years of consumer demand met. That doesn't mean it was 1:1, and exact number built relative to demand, obviously there would be an overrun every year, but let's ignore that.

 Another way of looking at that is that since the population has drastically shot up, and demand for guitars has been more or less a constant thing,

 Relative to 1954 64X consumer demand has been built (at least).  In other words, there are at least 64x as many guitars floating around today than in 1954.

 Yes, I know: all guitars don't make it to retirement behind a glass case in some Yakuza's mansion in Japan one day like a '58 'burst Les Paul.  But I would argue that the surplus not sold greatly outweighs those given to have been "broken", or "lost" somehow to the aether.  In general, there is a t LEAST 64 times as many guitars in the universe today than demand wanted in 1954.

Population in the U.S. in 1954 was about 150 million.  Today it's estimated to be between 350-400 million.  A bit more than 2-3x as much, let's say 3x.  Then, let's say that half of the guitars sold in the U.S. have evaporated into thin air somehow, leaving a 32 year production run versus 1954.

 In this imaginary context let's equate 400 million people today to then, 3X as many.  3 1954's to one 2018.  You still have over 25 years at least of guitars sold beyond human demand today.  These days a million guitars or so a year are sold in the U.S. alone.  But let's say it's half that, not as many sold in the 60's as now.

 That would yield at least 10 million guitars in a category of  "still exists, was wanted by somebody as "consumer demand" at some point".  That's obviously not all the guitars built or sold in the U.S..  Just a very conservative number of  "how many viable guitars are there in the wild, in the personal possession of someone in the U.S.".  I'd say it's much higher, but let's say it's 10 million.  What does that number mean?  It's not exact, it's not even clear what it entails aside from the claim that at any given time floating about I'd say there are at least than many guitars "in circulation".  At least.  I think it's something of a buffer figure: for the 1.5 million sold every year in the U.S., there was probably something like 10 million to be had, easily, used I'm guessing.

 I don't know how many used guitars are sold on Craig's List, Ebay or  But I'll step out on a limb and say that there must be at least .... 30-40 million viable guitars around in the U.S., if not more.  I'm going to say 50 million.

 I'd like to think that means around 15% of the population plays guitar.  I think it could be higher than that.  I think for the past 10 years we've seen the guitar replace the piano as "the instrument every child has to learn as part of being a well rounded individual, learning a musical instrument".  Cheaper and more portable than a piano, a certainly more relevant these days and motivating.  But it wouldn't be every single child in the U.S.?  On the other hand, the amount of people aging that do play guitar I would claim is increasing year by year for the same reason.  Gen-X and younger, we were the transition era from piano to guitar as the Instrument our Parents Wanted Us To Be Able To Play.

 What am I getting at with all of this?

 Solid body electric guitars in general, don't vanish.  All of the above aside, there is 50+ years of electric guitars around somewhere.  They *accumulate*.  And while the "nice" ones accumulate value, most don't.

 And with 50 years worth of guitars - millions - my question is, "how many more guitars are there in the U.S. relative to consumer demand?".  I think a whopping amount more.  Go on Craig's List, plenty of nice guitars being sold.  Unfortunately, everybody seems to want almost what they paid for their instrument ....

 ... The gist being this:

 At some point it will be Common Consumer Awareness that "guitars are everywhere!".  In reality one should get around half new value for used gear; this will become self evident at some point, and the used guitar prices will reflect this. What is presently maybe a 10:1 margin will grow. 

 In other words, it will become Common Knowledge that you can get a Perfectly Good Electric Guitar for half price, relatively easily, used. As it stands now, just about everybody knows somebody with an unused guitar in a corner of someone's house, somewhere.  At some juncture it will be just "the thing", Prices for cheap guitars used will be even less than half - at some point worthless as people realize....

 guitars are everywhere.

 What does that mean for guitar retail.....?


 China is building guitars faster than I can type this sentence.  At some point "soon" low-end guitar sales will fall flat, because of the above phenomenon.  China is speeding the demise by pushing this inevitability closer, flooding the market with hyper-cheap and quite decent guitars.  At some point in the future (presuming there is one...) - maybe 3-5 years from now, music retail will have to reckon with what will be seen as a "sudden loss of demand for guitars".  It will be dramatically, and ignorantly touted as something along the lines of  "guitar losing popularity?" when in reality it will just mean we've met Peak Guitar and the concurrently present population will just be finding guitars to start on in other places.

 In reality it could be a boon; more people will try guitar because "guitars are just laying around everywhere".  More people may end up being life-long players, and in turn buying better gear as they progress.

 ... but it's going to be hyper-annoying to read/hear people talking about guitar retail tanking, and hard for the remaining brick-and-mortar stores.

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