by : Business, Featured Articles, March 2013

The Importance of Being in Products

The Importance of Being in Products

 

The music products market is the unsung hero of the music industry. It is made up of manufacturers of instruments and instrument accessories, audio pro gear, recording software, trade magazines, and educational materials for musicians and K-12 music learners. As recorded music drops in value, sales in this sector stay resilient. Moreover, because there are so many small businesses and manufactures, and the typical producer cycle at NAMM goes from industrial design to production, marketing, and distribution, the sector employs the largest labor force in the music industry by far—more than live music, and much more than recorded music and publishing.

Over time, its significance has grown relative to the other sectors of the music business. In the early nineties, the U.S. music products industry was valued at $4.6 billion.  Then, it was overshadowed by recorded music sales worth at least twice as much; instead, by 2011 recorded music sales were worth only $7.1 billion compared to the ever-rising $7.6 billion of music products.  In short, the music products industry has pulled ahead: although it may be premature to say it is the new cash cow of the business, like recorded music once was, analysts should take notice.

The NAMM Show

Its most important annual event is for trade-only attendees. The general public is not allowed in. As usual, NAMM, for National Association of Music Merchants, happens at the Anaheim Convention Center in California every January. There is a summer version in Nashville, but it is the winter show that sets standards every year.

The 93,000 attendees and 1,700 exhibitor companies make NAMM the second largest music products show in the world; Musikmesse in Frankfurt, Germany, is larger only because it accommodates the general public. You have to be an insider to attend NAMM, and, in the products trade, NAMM is still the number one event of its kind.

The NAMM show revolves around the interaction between exhibitors and buyers (such as distributors, retailers, and the music education trade). Exhibitors present new products in booths along the show floor, while the buyers have the opportunity to see the products firsthand and negotiate price and delivery. Negotiations made on the floor establish the sales flow and revenue for the next year, providing an accurate portrayal of the future of the industry.  As we look forward to what’s to come in music gear, NAMM is the pointer.

Business Economics

Though more stable than the recorded music market–because, after all, NAMM represents the business of musicians’ accessories –- it is not immune to general trends in the economy. Trouble in the housing market after 2008, for example, has affected piano sales, and the 2011 tsunami in Japan affected electronic musical instrument sales. Besides, governments, both at the state and federal level, make decisions about education and impact music manufacturers and retailers that sell to schools. New products and innovations by the leading computer companies also play a role.

Music product trends also parallel music tastes. In 2011, DJ products rose 9.1% corresponding to the rise of electronic dance music in the United States. Acoustic guitars accounted for 52.5% of the total guitar market in 2011 as trends in popular music shifted from contemporary rock to a more acoustic-focused country style.

The NAMM show hosts a diverse network of companies ranging from large to small, domestic and international.  Larger exhibitors, such as Gibson, Yamaha and Roland, have entire rooms to showcase products.  Four halls in the convention center are dedicated to larger and mid-size companies while hall E consists of many international companies and smaller exhibitors.  There are also other levels where educational/professional development panels take place.

Products include fretted and brass instruments, audio pro gear, general accessories, pianos and organs, print music publishing, percussion, and school music. Connections within this network are important because they can lead to an educational experience, jumpstart a career, or even start an endorsement deal.

Education and Development

Music education is a major emphasis.  During the show, this correspondent spoke to a member of NAMM’s board of directors, Menzie Pittman.  Pittman is an educator and owner of The Contemporary Music Center chain store in Virginia. He links education with the advancement of the products industry; without it, and the necessary follow up, Pitman believes interest in playing an instrument could abate: “it’s not simply my job is to sell you a guitar, or a keyboard; we’d like to teach you how it works, how to play it, we’ll put you in groups, and we’ll prepare you for a summer performance”. This is passionate advocacy for learning, and is hardly found in any other branch of the music trade.

During the convention, NAMM members can also partake in professional development sessions at NAMM University, Generation Next, H.O.T. Zone, and the NAMM Idea Center to help build their business and network with the industry.

NAMM also has several public service programs including, “Wanna Play?” for people of all ages, from toddlers to seniors. “School Jam USA” invites high school musicians to perform and raise additional funding for their school music programs.  College students have the opportunity to attend the winter NAMM show through NAMM’s “Generation Next” program.

Forward

As baby-boomers get older, wellness is having a bigger emphasis in senior citizens’ lives, with music being a huge part of it: learning an instrument at old age will become common. At the other end of the spectrum, early childhood learning is becoming critical and a matter of public policy. Both factors bode well for the products’ industry and should expand music education and instrument purchases. Finally, it is good to encourage college majors in music business and education into a products’ career. The trade might not have the glamor of rock-and-roll, but no one attending NAMM can walk out without being amazed at the sheer variety of occupations and business dreams built around music.

By Jessica Prouty

 

Endnotes

1. Music and Sound Industry Finds Success at the 2013 NAMM Show.” NAMM. N.p., n.d. Web. 17 Feb. 2013. <http://www.namm.org/news/press-releases/music-and-sound-industry-finds-success-2013-namm>.

2.”NAMM Global Report: United States.” National Association of Music Merchants. NAMM, n.d. Web. 17 Feb. 2013. <http://www.namm.org/library/global-report/united-states>.

3.”The Music Trades Top 200: America’s Leading Music Products Retailers.” Music Trades Magazine 1 July 1994: n. pag. Print.

4. “The Top 100: The Largest North American-Based Music Product Suppliers, Ranked by Sales Volume.” Music Trades Magazine. N.p., Apr. 2012. Web. 17 Feb. 2013. <http://digitaleditions.sheridan.com/publication/?i=104825&p=98>.

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