Posted on 10/23/2022 8:47:33 AM PDT by Drew68
If you want to get under Andy Mooney’s skin, tell him that electric guitars are dead. A 2017 Washington Post article making that claim still gets him exercised even as he’s seen a renaissance in guitar sales at the company he leads, Fender Musical Instruments. That boom has been fueled partly by an increasingly diverse player base, as more women and people of color embrace an instrument long associated with white male fans of classic rock.
Many have continued to proclaim the death of the guitar since that article’s publication, Mooney says with exasperation. “It was like in the days of John Travolta in Saturday Night Fever when disco came out and guitar rock didn’t die out.” Fender’s sales show the guitar remains popular.
About 60% of sales come from fretted instruments like guitars, basses, and ukuleles; the rest are from amps and music sheets. The company is poised to hit $1 billion in sales this year, a far cry from 2015 sales, which were less than half that. Fender tapped the 67-year-old Mooney that year to fix the struggling company, which was choking under a mountain of debt.
The pandemic had lots to do with buoying guitar sales analogous to the baking boom during quarantine. Many consumers purchased guitars and ukuleles to learn new skills, relax, and pass the time. But other trends have sustained Fender’s growth beyond the pandemic’s peak, Mooney says. “The guitar is being used in more genres by more people in more geographies than ever, and it’s used for more reasons than just wanting to be a rock star,” he says.
Mooney, who worked at Nike for 20 years and then at Disney before becoming CEO of Fender, was once himself an aspiring rock star, first drawn to the instrument as a fan of Deep Purple. A key ingredient in his turnaround has been reducing the instrument abandonment rate of new players, 90% of whom quit playing an instrument within a year of purchase. That’s a big problem when nearly half of Fender’s instrument sales are from first-timers.
In response, the 76-year-old company launched Fender Play, a guided virtual program with short lessons for beginner and intermediate players to sustain their interest and cultivate an online community. It’s not a big revenue maker, but Mooney believes it will keep guitar sales on the growth track for years. “People are using it to self-develop, relax, or just learn something new,” he says.
This interview has been edited and condensed for clarity.
There’s a perception that people are gravitating more toward hobbies like video games and away from playing music. What are you seeing?
There was an infamous story in the Washington Post around 2017, and the headline was, “The electric guitar is dead.” It was the same thing when disco came out, and it didn’t die then. Before COVID, [percentage] growth was in the middle single digits. Now we’re pushing a billion dollars in annual sales, and we estimate there are 16 million more players in the U.S. and 30 million worldwide since the pandemic started.
The jump in guitar sales seems counterintuitive given that rock music is no longer dominant on the charts, theoretically leading interest in electric guitars to wane.
At the dawn of the electric guitar, a lot of the growth was from people who wanted to be guitar heroes or virtuoso players like Jimmy Page, Eric Clapton, or Jimi Hendrix. There are still heaps of virtuoso players, but there are fewer guitar gods now. More people use guitars onstage, in the studio, and in other genres as compositional instruments, creating textures.
Is there a parallel in the guitar boom to how people got into baking during the pandemic, fueled by a desire to return to basic, tactile pleasures?
Yes. Like many of those activities, playing guitar is normalizing post-COVID. But we’re not going through the same thing as Peloton, meaning a massive decline in usage and the return of goods.
So how do you hang on to all those new customers?
We recently surveyed customers, and the big “aha” was that 90% of first-time players abandoned the instrument in the first year. But the 10% who didn’t will have a lifetime value of $10,000 for us and will buy five or seven guitars in their lifetime, amplifiers, and all the other equipment. So in 2017, we created an online learning product called Fender Play, which aimed to reduce the abandonment rate at the height of COVID. We see it as a massive driver for bringing more people in and keeping them.
What did you immediately want to improve when you took the reins in 2015?
It was our research that pointed the way. We wanted to invest in building a community and digital ecosystem and monetize it. That’s essentially what Fender Play has become—one of our most important marketing components.
There was talk of a ukulele boom during the pandemic, with the instrument’s small size and relative simplicity proving to be a draw for legions of newbies. Has that held up?
The ukulele segment grew faster than any other fretted instruments pre-COVID but slowed down quickly. These things tend to be driven by personalities. For example, at that point, Billy Eilish was a big-time ukulele player, but she doesn’t use it as much onstage these days.
Many iconic guitar stores have closed in the past decade, and the big national chain, Guitar Center, struggled for years before finding its footing again. Does that change your view on the benefits of selling through stores versus your website?
In 2015, 70% of our business was done in brick-and-mortar stores and 30% online. Today, it’s the inverse. During the pandemic, a big shift was that consumers were predominantly buying online. They were not going into guitar stores, and that environment for new players can be pretty intimidating. Still, there’s always going to be a desire in consumers to touch, feel, and hear an instrument. But we don’t intend to enter the retail business, because our dealer base covers the landscape well.
Are you still dealing with supply-chain chaos and product shortages?
The biggest issue we’ve faced is more on the electronics side, such as vacuum tubes [devices that control electric current flow], many of which came out of Russia. Chips are still a dogfight. A chip we would’ve paid 30 cents for last year is going for $30 this year, and it’s priced some products totally out of the market for consumers.
What makes you think the boom in music instrument sales has legs?
I’m optimistic about the future because I’m sitting in my office here at home, and nobody’s returning to the office the way we once were. So I think people may have anywhere from 50% to 80% more available time to spend on things they want to do. And I think that people will continue to bake, exercise, fly-fish, and play music.
Get to know Mooney:
*His favorite band is Deep Purple. It’s the first band he ever saw live, and the lead guitarist, Ritchie Blackmore, inspired him to pursue learning the instrument. The first riff he learned on guitar was “Paranoid” by Black Sabbath.
*Mooney’s most prized guitar, out of about 40, is his 1955 Fender Stratocaster, but these days he’s playing his Fender Jim Root Jazzmaster, named for the Slipknot guitarist, and a Tom Morello Soul Power Fender more.
*He was the chairman of Disney Consumer Products in 2000, and he spearheaded the creation of its Disney Princess franchise, a far cry from his heavy metal tastes.
I will give my Gibson Les Paul classic to my daughter or one of my two sons. Never would I sell it. I don’t give a rat’s behind what it is worth, it is a great guitar. Great vibration and intonation, just a beautiful instrument.
It’s very different here.
My wife quipped that when we attended a Mennonite church, they used to have disposable head coverings for lady visitors in the lobby.
Our new church has ear protectors.
;)
Listen to some modern Christian music from Kari Jobe, Chris Tomlin, Casting Crowns, etc.
There’s one local church where the pastor has a Glock strapped to his waist and plays lead guitar. He’s pretty good, too. Very strong messages, and not afraid to deliver politically incorrect messages.
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