The good news of the music industry is that sales increased over the last year by 2.1%. The bad news is that the reason behind sales being able to keep pace with economic growth is that there was a massive surge of sales in used equipment.
Guitar sales saw an increase of 4.6% over the last year, doubling what the industry was able to produce.
Why are guitar sales staying strong? There’s an abundance of used instruments on the market today and a rather high unemployment rate in the instruments key age demographic, which are individuals below the age of 30. Fewer than half of the primary target demographic for guitar sales are holding down full-time jobs and the unemployment rate for the under 30 crowd is above 10%. That directly impacts guitar sales.
- Aggregate shipments of electric and acoustic guitars dip 0.7% to 2.47 million units.
- Retail value increased 7.0% to $1.07 billion, compared with $1.00 billion in the previous year. This is a reflection of an increase in guitar sales of over $1,000.
- Unit shipments of acoustic guitars and acoustic guitars with pick-up assemblies advanced 2.7% to 1.36 million units.
- Retail dollar value advanced 13.3% to $603.2 million.
- Shipments of electric guitars declined 4.6% to 1.10 million units, but the retail value of electric guitars declined only 0.3% to $467.1 million.
- Acoustic guitars saw an increase in sales for the 5th consecutive year, topping 1.2 million units sold for the highest levels of incoming revenue since 2004.
- The strength of acoustics has pushed its share of the market to 34.7%, a full 10 percentage points above electric guitars.
- Ukuleles account for 4% of the total guitar sales that occur every year.
- Acoustic guitars appear in the Billboard 200 2x more often today than electric guitars.
- Over the last 10 years, the average price of a guitar has risen by 48%. Unit sales are down 15% over that period of time, but retail sales are up 24.6% overall.
Changing musical tastes might be having a small effect on the guitar sales that the industry is seeing, but it isn’t the only issue that is being faced. Guitars are able to plug directly into computers today for direct recording, which means fewer mics, amps, and even effect pedals. Fender, Gibson, and Taylor might be leaders in market share, but there are over 260 manufacturers of guitars that are active right now. The total revenues are nearly $1 billion for the guitar manufacturing industry. The end result is employment for 5,200+ people and continued growth through the end of the decade. If you saw the early 80s disco-era, then the feeling here in the market is familiar. Will EDM pass into a new era of guitar driven rock? The economy might dictate that
Would a Better Job Market Make For Better Guitar Sales?
- About 2.3 million guitars are sold in the United States every year.
- According to the US treasury, college-related debt has risen 275% since 2003, cutting into money that would be spent on guitars.
- In the UK, more than 750,000 guitars are sold every year, bringing in the equivalent of about $225 million on the currency conversion from pounds to dollars.
- Sales volumes in the UK are off by nearly 10% in a year over year basis.
- Fretted products dominate the industry, bringing in double the amount of the next music industry category, which is sound reinforcements.
- The total music industry value for instruments and associated products: $6.81 billion. That means about $1 out of every $6 is spent on guitars.
The industry is just off right now. It’s still part of the fall out of the Great Recession in 2008-2009. Europe is seeing an even softer market than the US because of the extended debt issues that exist in the EU. This is why the saving grace of the guitar market is the used instrument or the dot-com presence of a discount retail site. The only problem with this is that it will drive the industry toward a race to the bottom and the people who lose then are those who sell guitars for a living. As the dollar strengthens and interest rates may rise for the first time in nearly a decade, look for guitar sales to rebound. Until then, you might check out the pawn shop down the street