flaxwood guitars, perspective of a "new" player entering the market - rick nelson

“So You Think You Can Compete In The Music

Industry?”

Breaking into the Music Business, from the perspective of a new player in the market

“It’s gotta be a Fender, a Fender Copy, a Gibson or a

Gibson Copy”

In spite of their looks, guitar players are very conservative

• 60+ yr. old designs are still the predominant choices for guitar players

• “traditional” construction methods have changed, but not materials or body shapes

• Guitarists are slow to accept something new or different.

Some 20th Century innovators

• Leo Fender• Les Paul (Gibson)• Paul Bigsby• Ned Steinberger • Grover Jackson• Trevor Wilkinson• Floyd Rose• Bob Taylor • Ken Parker

“You only have one chance to make a first impression”

The Worldwide Web: www.

“Online Revolution”

• 1995: 634,000 internet sites

• 2010: 255,000,000 internet sites

• 21,400,000 new internet sites in 2010 alone…

• Much more information is available to the consumer than ever before

Factoids:

96.4% of M.I. retailers have a website

62.4% of M.I. retailers will redesign their internet sites this year

43.8% of M.I. retailers sell new products online

Internet Sales

• In 2010 34% of total music industry sales were made online or by catalog vs. only 9% in 1995

#1: Thomann (Germany): $752.4M / €524.8M

• Musician’s Friend (USA) $708M / €495M

Social Media

• 80.6% of M.I. Retailers now have a Facebook presence

• 42.6% of M.I. Retailers are on Twitter

Where purchases were made:

• Independent M.I. Retailers: 41.2%

• “Chain” Stores: 36.9%

• Online Stores: 21.9%

Fretted Instrument Sales

Guitars are STILL the single most popular instrument worldwide

• 2010: 2,377,310 units sold in the U.S.A.; $839M / €590M (up 2.2% vs. 2009)

• Acoustics (1,200,831 units) up 8.2% 2010 vs. 2009

• Electrics (1,176,479 units) up 1.1% 2010 vs. 2009

Guitar Purchase SurveySurvey of over 1,100 consumers who

purchased a guitar valued at €645+ during the last 12 months

• 93% male; 7% female

• Median age: 32 years old

• Median Income: €43,700

• Owner ship level: 2.9 instruments ea.

Guitar buyers are willing to sample a variety of retail

formats:

• Online retail stores

• Chain stores

• Independent retail stores

Guitar buyers remain highly price driven

• 90.9% of online buyers said “low prices” were extremely important to them

• 49% of online buyers were “very satisfied” with their purchase

The €¥£$ have it…

“We don’t make a lot of money in the music business, but we sure don’t make a lot of money”

“Who IS that masked man?”