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'm in this 10% and I'm sure I've given fender at least $10,000 over the years (as well an equal amount to Gibson).
Another quote from a different article:
"Fender's CEO says company finding out half of new guitar players are female was a "complete shocker"
Anyhow, good for Fender. They're doing something right and one of the things they're doing is *giving* free guitars away to internet influencers to sing their praises.
Something Gibson is *not* doing.
Fenders are everywhere on stages these days. Gibsons, less so.
Metal is real music. Real skill, real vocalists. Tells a story. They all use electric heh.
Both companies make fine instruments. Have both.
I’m just pissed how Barry went after Gibson about neck wood but left Fender alone.
The chinese strats are playable. Just have to be enameled because the wood’s not pretty enough to be natural. I imagine that affects the sound too. Just sold one. Keeping a modded one (carbon neck and custom pickups). They’re flooding the market.
I am in that boat too. But I don’t like bolt on necks. So I only have one Strat. I have 3 Flying V 90s. 2 Jacksons.(•Kelly) and San Dimas) 1 Esp. 1 Dean from hell.
Rock on🤘
Electric guitars are hardly dead. In most churches, the electric guitar has chased out the organ and the choir.
I’m just pissed how Barry went after Gibson about neck wood but left Fender alone.
/\
Me too.
One of the biggest mistakes of my teen age years was letting my 67 mustang bass go.
( traded it in on a 4001 Rickenbacker )
Right, people have forgotten or never knew Obongo sent his goons to Gibson and they ransacked the place and impounded materials. Hundreds of thousands of dollars in damage and losses. Martin and others were left alone. The difference? Gibson donated some money to Republicans.
Yep. I remember that. Then Gibson CEO Henry Juszkiewicz did something to piss off Obama and the end result was Gibson had to destroy warehouses full of wood for accusations of Lacey Act violations.
For a while, a $5000 Les Paul Custom came with "richlite" fretboards (plasticized, compressed cardboard) while Asian imports were still allowed to use ebony.
The chinese strats are playable.
A Chinese-made Squier Strat today is as good an instrument as anything Fender was making in America in the 1970s. CNC manufacturing processes (pioneered in guitar-making by Hartley Peavey) have ensured that quality, playable instruments can be obtained at almost any price point. Cheap guitars are better today than they've ever been.
While I shy away from Chicom guitars purely on principle, I have a couple of excellent Korean-made models and a couple of excellent Mexican-made Fenders (as well as USA-made). All are great guitars. Even the stuff coming out of Indonesia are superb instruments in fit and finish.
I love my Strat (It’s an Eric Clapton Blackie - type. Love the maple fretboard), but these days I mostly play my PRS (and I’m NOT a lawyer or dentist!)...
Personally, I play the stereo . . .
FWLIW, an old friend owns Eminence Speaker Corporation. Several years ago I asked him what are the odds your stuff is on-stage at the Tedeschi-Trucks Band show we were at.
“95 - no, 99%.”
I've got a Clapton "Brownie" --though it's not a Clapton sig, just an American reissue of a '54 Strat. I love it.
All of Clapton's early Strats were "Frankenstrats" meaning he'd take the neck off one guitar and swap it out with the body of a different one. He even put Strat necks on Teles.
If you or I did that, we'd kill the instrument's value but, then again, we're not Eric Clapton.
I have a usa strat and Mexican tele, acoustic dean, schecter blackjack V, gibson les paul standard, epiphone sg modern and a guild bass.
A lot of modern church music is a mixture of classic 70s/80s rock and progressive rock, both of which rely heavily on electric guitars
Fendor Stratocaster from the custom shop. Also a Fender Geddy Lee jazz bass. Great instruments. Also got a Gibson Les Paul classic, another great guitar.
I hope my 2018 PRS SE C24 - the top of which was only made in 2018 (Vintage Spalted Maple) - will be worth more than MSRP some day (if I live long enough!)...
"Can't you see you're not making Christianity better, you're just making rock and roll worse." - Hank Hill
The Fender/Gibson target market appears to be the well-to-do Boomer/Gen-Xer who is willing to overpay to imitate their childhood heroes. Today's innovative guitarists don't even consider playing those brands.
Much of the praise and worship music in church is heavily acoustic - very few worship leaders lead from electric. And very little solo work.
I’ve done MY part to help keep them afloat...
My collection (so far):
Gibson '58 Reissue Les Paul Standard
Gibson Les Paul Special
Gibson Les Paul Studio
Gibson Les Paul Junior
American Fender '54 Strat Reissue
American Fender Highway One Strat
American '62 Tele Custom Reissue
Mexican Fender 50s Series Classic Tele
American '70s Strat (project guitar I'm currently building myself)
Korean Dean Flying V
Korean Samick solid body something or another (set neck, Firebird pickups)
American Martin acoustic
Unbranded P-Bass
British-made Marshall YJM100 Plexi full 100-watt stack.
And over the years, I've bought, sold, traded, lost, and given away countless others.
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