Mid-life (crisis) markets and the guitar business
My favourite data point about our ageing but apparently ageless population is that the average age of the first time buyer of a Harley Davidson motor cycle in the UK is (from memory) now 52 years old. It’s been going up over the last decade. (Which means incidentally that the average buyer was 13 years old when Steppenwolf released their biker classic Born To Be Wild).
This came to mind because of an amusing exchange in an interview with the chief executive of another counter-cultural but expensive brand, Gibson Guitar. It turns out, though, unlike Harley Davidson, that the company’s success has more to do with youth trends than boomers.
Henry Juskiewicz was in London because Gibson was sponsoring a polo match (yes, horses, mallets, all of that), and of course it turns out that these days the top end Gibson, customised, of course, costs $30,000 or $40,000, and are sold to lawyers or similar who are trying to rediscover the musical passions of their youth, only much more expensively:
A bit like a Harley Davidson? [says interviewer David Teather] “It is very much like the Harley Davidson.” So you are a mid-life crisis brand? “Hum,” he considers. “It can be,” stretching the vowel in “can”. “But we are not really pushing the mid-life crisis agenda.”
Some interesting guiter market data: according to Music Trades Magazine, the size of the market has trebled (in volume terms) since 1998, and 3.3m guitars were sold in 2005. Market value is $1.1bln.
Juskiewicz bought the company for $5m in the 1986 when it was part of a conglomerate and losing sales at the rate of 20% a year at a time when the new wave was playing keyboards and not guitars (shades of the witty line in LCD Soundsytems’ song ‘Losing My Edge’: “I hear that you and your band have sold your guitars and bought turntables”.
So why is the guitar market doing so well now? Juskiewicz’s ‘investment bank pitch’ (his phrase) is like a technology and leisure trends summary:
“There is a major structural social change that’s taking place. Our generation was the passive entertainment generation. We sit on the couch watching TV, sit in the sports stadium watching football. The creative tools in our generation were very expensive. Fifteen years ago if you wanted to record a song you would go to a studio and you would pay £400 an hour and it would be very expensive.
“The internet changed all of that. The tools are now available to everyone for almost no money. Garage Band [Apple’s recording software] is a better production platform than that £400-an-hour studio in many respects and it’s a couple of hundred bucks.
“The second thing is, the ability to distribute your creative product is free. The fact is, creating music is becoming part of these youngsters’ lives. They do videos, they write, they do photos. We have the onset of the creative generation and the musical instrument of choice in the creative generation is the guitar and so the guitar is doing wonderfully well.”
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