Are Fender, Gibson, PRS, etc., etc., etc., facing extinction soon?
I've updated this article a few times in the last couple of years to chart the myriad failures, closings, and bankruptcies that have transpired.
Over the last decade the sale of new electric guitars fell by 500,000 units. If the trend continues the American guitar industry as we currently know it will cease to exist. What is going on?
The growth and expansion of the American guitar industry was tied to the post-war baby boom but now that the leading edge of the 'Boomers' are heading into their 70s, retiring, and dying off (17 million of them in the next 10 years will die) Fender and Gibson can no longer rely on this cohort to fuel the nostalgia business that drove, for example, the $10K Les Paul and novelty distressed Strats cranked out by the Fender custom shop. Pop music trends have shifted away from guitar-based music, rock is now a peripheral music and is not going to make a comeback any time soon, and youngsters are not going to fill the void.
As John Suhr recently said: "This industry is already shrinking due to the lack of interest in actually really learning an instrument by our youth." (link). If you want to hear a guitar solo, don't attend the Grammys.
In short, the industry is desperate for a guitar hero.
While Gen-Xers can soak up a fraction of the coming glut of instruments and keep things going to an extent, Millennials have little to no interest in guitars and we can expect not only contraction in the guitar business but a collapse of many firms. (Gen-Xers lacking the Fender and Gibson fetish of their Boomer counterparts might be the reason PRS has been doing well lately -- the production of core models is way down but the SE and S2 lines are selling like hotcakes). But I think even PRS can see the writing on the wall (especially after the 2008 debacle) and PRS himself has been shifting gears into sonar, defense, and medical imaging technologies.
Recently, the Washington Post ran a feature on the slow death of the electric guitar. It has circulated far and wide on guitar forums and what I like most about the responses, if you can call them that, are how (1) outrage and (2) personal anecdotes substitute for data and rational arguments. Just because you bought an overpriced Les Paul novelty does not mean the guitar industry is healthy.
*
The Baby Boomers that keep guitar sales going are, finally, starting to retire. They continued to work far longer than predicted and the Great Recession that began in 2008 meant that those that wanted to retire were forced to continue working for another 5 to 10 years to make up lost ground. But we're now seeing those old heads packing it in.
I've updated this article a few times in the last couple of years to chart the myriad failures, closings, and bankruptcies that have transpired.
Over the last decade the sale of new electric guitars fell by 500,000 units. If the trend continues the American guitar industry as we currently know it will cease to exist. What is going on?
The growth and expansion of the American guitar industry was tied to the post-war baby boom but now that the leading edge of the 'Boomers' are heading into their 70s, retiring, and dying off (17 million of them in the next 10 years will die) Fender and Gibson can no longer rely on this cohort to fuel the nostalgia business that drove, for example, the $10K Les Paul and novelty distressed Strats cranked out by the Fender custom shop. Pop music trends have shifted away from guitar-based music, rock is now a peripheral music and is not going to make a comeback any time soon, and youngsters are not going to fill the void.
As John Suhr recently said: "This industry is already shrinking due to the lack of interest in actually really learning an instrument by our youth." (link). If you want to hear a guitar solo, don't attend the Grammys.
In short, the industry is desperate for a guitar hero.
While Gen-Xers can soak up a fraction of the coming glut of instruments and keep things going to an extent, Millennials have little to no interest in guitars and we can expect not only contraction in the guitar business but a collapse of many firms. (Gen-Xers lacking the Fender and Gibson fetish of their Boomer counterparts might be the reason PRS has been doing well lately -- the production of core models is way down but the SE and S2 lines are selling like hotcakes). But I think even PRS can see the writing on the wall (especially after the 2008 debacle) and PRS himself has been shifting gears into sonar, defense, and medical imaging technologies.
Recently, the Washington Post ran a feature on the slow death of the electric guitar. It has circulated far and wide on guitar forums and what I like most about the responses, if you can call them that, are how (1) outrage and (2) personal anecdotes substitute for data and rational arguments. Just because you bought an overpriced Les Paul novelty does not mean the guitar industry is healthy.
*
The Baby Boomers that keep guitar sales going are, finally, starting to retire. They continued to work far longer than predicted and the Great Recession that began in 2008 meant that those that wanted to retire were forced to continue working for another 5 to 10 years to make up lost ground. But we're now seeing those old heads packing it in.
Retirement downsizing, increased travel, medical problems and mounting bills, and imposed frugality, will mean an increase in used guitars for sale and a general decline in prices as supply outstrips demand by a large margin.
And when the next collapse happens, and it will, the high end guitar market will suffer greatly. The famous "jobless recovery" is a real thing. Since 2008 there are about 11.5 million fewer jobs in the US, largely due to outsourcing and automation -- this has seriously impacted what we might call the 'manufacturing male' who now relies on disability checks, food stamps, contingent and low-wage part-time gigs, spousal support, or who has simply died off due to bacon, opioids, or "hunting accidents."
The days of buying those $10,000 Les Paul reissues might be over. So much of the upper end of the market (less than 25K instruments, annually, spread out over a practically 'infinite' number of 'boutique' builders each poaching off the same, limited and dwindling pool of customers) is part of the larger nostalgia industry you see winding down in the US. Those reissue Les Pauls lured older guys who pined for the one they sold or "let get away" back in the 60s or 70s. Every generation suffers nostalgia and there's always product to scratch that itch. For guys in their late 40s and early 50s, for example, we saw a resurgence of the 80s-style shred guitar.
People still buying high-end American-made guitars right now are those who were inspired by Van Halen (1978) and 80s metal but these guys (and they are all guys) are all 50+ now and putting kids through college and starting to think about how they might retire within the next 20 years.
Think about it like this: you're in your mid-50s and you're thinking about buying a guitar that costs $1500 (because you only have nine other guitars collecting dust) but if you put that money into an index fund drawing a modest 7% interest rate it would represent an additional $6K by the time you pack it in. If you're in your 50s and not maxing out your retirement contributions you'd be a damn fool to buy another guitar.
Guitar buying for Boomers and Gen-Xers will continue to decline and while some guys will continue to buy gaudy instruments that cost a small fortune most will keep an eye on their budgets. Firms hoping to lure money out of their pockets will have to keep prices low on American-made guitars, as Fender and G&L have managed to do. But even low prices cannot overcome the shift that is underway. The desire for US guitars over imports among this group will create a bind that is unsustainable.
Think about it like this: you're in your mid-50s and you're thinking about buying a guitar that costs $1500 (because you only have nine other guitars collecting dust) but if you put that money into an index fund drawing a modest 7% interest rate it would represent an additional $6K by the time you pack it in. If you're in your 50s and not maxing out your retirement contributions you'd be a damn fool to buy another guitar.
Guitar buying for Boomers and Gen-Xers will continue to decline and while some guys will continue to buy gaudy instruments that cost a small fortune most will keep an eye on their budgets. Firms hoping to lure money out of their pockets will have to keep prices low on American-made guitars, as Fender and G&L have managed to do. But even low prices cannot overcome the shift that is underway. The desire for US guitars over imports among this group will create a bind that is unsustainable.
Ironically, the home recording movement also means a decline in guitar sales as music-related budgets now include computers, interfaces, software and plugins, mics, preamps, monitors, and assorted accessories, so there is less money to lay out for an unnecessary guitar.
If my annual studio budget is, say, $2000 and I already have a bunch of guitars I'm not going to go out and buy another when what I really need is a good set of headphones, room treatment, monitor calibration, midi controllers, etc.
Also, digital modeling has gotten so good these days that 'real' amps seem pointless as far as recording goes (and face it, you're probably not gigging, so this is the last refuge). I know that my Axe-Fx II XL+ and my ENGL Retro UAD plugin sound and work as good as my real amps (Bogner, Swart, Vox, Boogie) and if I want a Plexi for my studio it's now just $200 -- and, really, you get a better Marshall Plexi if you buy the plugin since the essence of a Plexi only emerges when the amp is dimed and, for most guys, they are in no position to dime a 100 watt amp. If you want the real 'brown sound' be prepared to spend a lot of money, or, just turn on the Axe-Fx and roll back the Variac parameter.
Also, digital modeling has gotten so good these days that 'real' amps seem pointless as far as recording goes (and face it, you're probably not gigging, so this is the last refuge). I know that my Axe-Fx II XL+ and my ENGL Retro UAD plugin sound and work as good as my real amps (Bogner, Swart, Vox, Boogie) and if I want a Plexi for my studio it's now just $200 -- and, really, you get a better Marshall Plexi if you buy the plugin since the essence of a Plexi only emerges when the amp is dimed and, for most guys, they are in no position to dime a 100 watt amp. If you want the real 'brown sound' be prepared to spend a lot of money, or, just turn on the Axe-Fx and roll back the Variac parameter.
How about the kids? Teens and young adults today don't care about guitars and we see that reflected the decline of the guitar in popular music. EDM is everywhere and the guitar is totally absent. Nobody cares about it any more and the hot lead guitar solos of the 80s and 90s are gone even where the guitar still hangs on.
And, face it, you're probably reading this from a guitar forum like The Gear Page or The Tan Pants Brigade -- like most guitar forums there's probably a one-in-five chance you can even play. You own 10 guitars and probably spend more time trying to find somebody to set them up for you than playing that goddamned blues scale for the five millionth time. You're the typical guitar buyer: a non-serious older white male with a basement hobby who likes to tell everybody that the cure to all problems is a "professional setup." An industry cannot survive the contraction from actual rock gods to elderly collectors. You wonder why kids don't think guitars and rock are cool?
Where's the audience for guitar music?
The few of you might get the inclination to record that blues scale will put it up on SoundCloud and, over a couple of years, you might get 50 plays and a few likes. Nice. Put this into perspective: my teenage son who cares nothing for guitar despite being surrounded by them decided out of the blue one day to become a 'rap star' and used GarageBand on his phone to create some beats, borrowed my mic and Apogee interface, opened a SoundCloud account and loaded it up. In less than 12 hours he had over 800 plays on that one 'song.' By the time he put up a few more songs he was in a rap 'battle' with the local 'rap star' at his high school and over the next couple of weeks he had more hits on his account than you'll have in your whole life. This was a serious WTF moment for me. After a couple of weeks he grew bored with his budding music 'career' and moved on to some new video game.
Guitar is over.
Check out Google Trends for "learn guitar" and just stare slack-jawed at the horror of it (further below I will post some relevant Google Trends for you).
Every semester I ask my college students if any of them play guitar. Out of 100 it's usually zero or one person. And they never report being serious about it and they never own more than one budget guitar made in Slumsonesia. I had one student a few years back who owned a MIM Strat. That's about as good as it gets. This semester I have one student who plays, is good, and owns quite a few nice instruments, and, you guess it, he's a non-trad white guy in his 50s. In 12 years I saw two kids with guitars on campus. I asked one what he had in the case and he said "A Johnson." WTF is a "Johnson"? I just blessed his little heart like he was wearing a foam helmet and went on my way but I really wanted to tell him to get his shit together.
And, face it, you're probably reading this from a guitar forum like The Gear Page or The Tan Pants Brigade -- like most guitar forums there's probably a one-in-five chance you can even play. You own 10 guitars and probably spend more time trying to find somebody to set them up for you than playing that goddamned blues scale for the five millionth time. You're the typical guitar buyer: a non-serious older white male with a basement hobby who likes to tell everybody that the cure to all problems is a "professional setup." An industry cannot survive the contraction from actual rock gods to elderly collectors. You wonder why kids don't think guitars and rock are cool?
Where's the audience for guitar music?
The few of you might get the inclination to record that blues scale will put it up on SoundCloud and, over a couple of years, you might get 50 plays and a few likes. Nice. Put this into perspective: my teenage son who cares nothing for guitar despite being surrounded by them decided out of the blue one day to become a 'rap star' and used GarageBand on his phone to create some beats, borrowed my mic and Apogee interface, opened a SoundCloud account and loaded it up. In less than 12 hours he had over 800 plays on that one 'song.' By the time he put up a few more songs he was in a rap 'battle' with the local 'rap star' at his high school and over the next couple of weeks he had more hits on his account than you'll have in your whole life. This was a serious WTF moment for me. After a couple of weeks he grew bored with his budding music 'career' and moved on to some new video game.
Guitar is over.
Check out Google Trends for "learn guitar" and just stare slack-jawed at the horror of it (further below I will post some relevant Google Trends for you).
Every semester I ask my college students if any of them play guitar. Out of 100 it's usually zero or one person. And they never report being serious about it and they never own more than one budget guitar made in Slumsonesia. I had one student a few years back who owned a MIM Strat. That's about as good as it gets. This semester I have one student who plays, is good, and owns quite a few nice instruments, and, you guess it, he's a non-trad white guy in his 50s. In 12 years I saw two kids with guitars on campus. I asked one what he had in the case and he said "A Johnson." WTF is a "Johnson"? I just blessed his little heart like he was wearing a foam helmet and went on my way but I really wanted to tell him to get his shit together.
And even if recent college grads, for example did care about guitars, and, remember, they don't, they don't have stable jobs, are moving around a lot, moving back in with parents, and many do not have places of their own -- and if they do manage to find a cheap apartment, it's so small and crowded with others that the days of having a spare bedroom studio are gone. Piling up guitars will not happen again they way they did when I was 22 (except for the mountain of them growing on Reverb.com).
And the pile is large and getting larger. Want a Fender Strat? There's currently almost 8,000 of them for sale on Reverb (5000 on Craigslist). I've watched the supply and demand curve at Reverb.com for a while and it appears that the supply of electric guitars over demand at this outlet is roughly 25 units per day. In other words guitars are being bought (I had my eye on a couple of USA Hamers and a 1984 Ibanez that sold pretty quickly) but not at the rate of units being offered for sale. I suspect that over time we will be flooded with more guitars coming out of the woodwork. Sometimes the prices for new guitars are right but mostly they don't look promising in either relative or absolute terms.
When I first published this article there were about 80K electric guitars for sale on Reverb and now there are almost 115K languishing on the site. Update: 126K now on Reverb for sale....that amounts to almost 31 surplus guitars per day.
And the pile is large and getting larger. Want a Fender Strat? There's currently almost 8,000 of them for sale on Reverb (5000 on Craigslist). I've watched the supply and demand curve at Reverb.com for a while and it appears that the supply of electric guitars over demand at this outlet is roughly 25 units per day. In other words guitars are being bought (I had my eye on a couple of USA Hamers and a 1984 Ibanez that sold pretty quickly) but not at the rate of units being offered for sale. I suspect that over time we will be flooded with more guitars coming out of the woodwork. Sometimes the prices for new guitars are right but mostly they don't look promising in either relative or absolute terms.
When I first published this article there were about 80K electric guitars for sale on Reverb and now there are almost 115K languishing on the site. Update: 126K now on Reverb for sale....that amounts to almost 31 surplus guitars per day.
[Update: the sale of Reverb.com has significantly altered the inventory for sale as of 2020]
Some brands are overpriced in relative terms while others, Gibson, for example, are absolutely overpriced. In real dollars (adjusted for inflation), to me, a new Fender looks like a good deal, but for kids out of college or for those that never went, dropping a grand on a guitar is less likely than before. Underemployment and lack of job security, diminishing benefits, etc., mean fewer outlays in items that can seem pretty superfluous compared to food, clothing, social media gadgets, drugs and alcohol, transportation, etc.
And wages? They have completely stagnated or fallen for most people. In fact, in 'real dollars' the American labor force hasn't had a pay raise since the 70s.
And wages? They have completely stagnated or fallen for most people. In fact, in 'real dollars' the American labor force hasn't had a pay raise since the 70s.
In 1958 you could get a new Les Paul for about $250 street price. Adjusted for inflation, a Les Paul Standard should cost you about $2K street. Check prices at any online dealer and you'll find a gap of about $1400 dollars. That's how bad wages have stagnated over the last 40 years and how out of line Gibson is. To get a new Gibson under $1000 means settling for their slapdash Les Pual Jr. or a crummy SG. No thanks. The PRS line of S2 American made guitars just blow those planks away.
On top of wacky prices for a lot of guitars, the market has never been more saturated with great instruments. Virtually every Tom, Dick, and Harry now has a 'boutique' guitar business going. Where there used to be a dozen manufacturers, then hundreds, there are now thousands. Here's a glutton for punishment attempting to create a list of the small-time builders. Call your granny right now and I bet she's slapping together partscasters out in the garage. Speaking of which, the number of fools buying rebranded Warmoth partscasters for big money is astonishing.
On top of wacky prices for a lot of guitars, the market has never been more saturated with great instruments. Virtually every Tom, Dick, and Harry now has a 'boutique' guitar business going. Where there used to be a dozen manufacturers, then hundreds, there are now thousands. Here's a glutton for punishment attempting to create a list of the small-time builders. Call your granny right now and I bet she's slapping together partscasters out in the garage. Speaking of which, the number of fools buying rebranded Warmoth partscasters for big money is astonishing.
I used to personally know people who made a living as full-time musicians. I don't any more. Nobody is dreaming of making money or a living off of music since it's all free; local gigs that pay are almost non-existent as bands cannot compete with the DJ or karaoke; touring is a financial dead end; and now selling merchandise is no longer panning out. If you want to survive you have to land licensing deals with advertisers so your music can be used to pimp Tupperware or cruise vacations. Rock on.
Sure, the top 1% of musicians will still be making millions by selling music for films and ads but for everybody else, like other domains of society, they will wallow in poverty. Poor people do not buy new guitars.
Looking to export markets is pretty sketchy as well. The US imperialist system has a lot of nations undergoing increased austerity and being force-fed worthless US or EU debt. The world's wealth is being sucked up by the 1% leaving everybody else to fight over the crumbs. How many Greeks are buying a Les Paul today?
The next big market correction (stock market collapse) will see a repeat of 2008's crystallization of capital markets that nearly took PRS down. I suspect the next one will coincide with all these, and other demographic shifts and factors, to spell doom for more than just a handful of small shops.
Signs of contraction and stagnation in 2015 are all around us.
Heritage just demolished its production and sales force.
Rumor is that Parker Guitars is ceasing production soon. UPDATE: no longer a rumor, Parker is toast.
UPDATE: Thorn Guitars is gone.
Mesa Boogie quietly abandoned an entire line of amps and it was their only bid for a vintage sound. They now are placing their hopes in selling $2500 amps to pale Norwegians. Update: they've brought out a new amp called A Stripped Down Version of the Same Old Shit We've Been Cranking Out for the Last 20 Years.
PRS core set-neck production in 2014 was down approximately 5,000 units from just a couple of years prior -- even worse than the slowdown of 2009. Though, undoubtedly, the new S2 line has put a dent into the premium core line so this may actually work out in the long run, but it seems telling that Experience was canned the last two years in a row and the post-2008 strategy of artist relations pumping the guitar shop 'clinic' circuit is in full swing.
Gibson shed 5% of its workforce a few years ago and is currently the most despised employers in the musical instrument industry with a crummy work environment, high employee turnover, low wages, and wage stagnation.
UPDATE: Gibson just had its credit rating downgraded to Caa1 status.
UPDATE: Gibson has been downgraded again to Caa2 status: from junk to junkier junk
UPDATE: Gibson has been downgraded again to Caa3 status; we're talking about 9 degrees of junk.
Gibson is selling off property -- it owes a shit ton of money and is probably just plain screwed (2017 and 2018 are going to be terrible for Gibson).
UPDATE: Memphis factory up for sale.
UPDATE: Gibson is laying off Custom Shop employees.
The last time Gibson turned a profit my son was in Jr. High and now he's in college. Ugh. How many years can this last?
UPDATE: Gibson files for Chapter 11.
UPDATE: Gibson is now a blue jean company
UPDATE: Carvin is closing: "It is with a heavy heart that we announce that the Carvin Audio factory will be closing its doors after over 70 years. We are thankful for the many years we've had in this business and the support you all have given us. We'd like to thank all of you for your devotion to our gear and championing us live, in the studio, and on social media. We hope to see our gear live on in your musical lives for many years to come! Shortly, we will be making an announcement about our liquidation sale."
Suhr is selling out (or trying to) to some sketchy vape company. UPDATE: that fell through. Who wants to buy a business in a contracting industry?
Suhr is now down to selling $3500 guitars with fucking gig bags (and they're not the highest quality bags, either, I know, I have two of them).
The boutique builders conglomerate thingy is currently in full disintegration mode. Update: Dead.
High end dealers are currently sitting on new inventory that is 4 and 5 years old -- the stuff is not moving. Go check out Willcutt's PRS selection. Some of that stuff will be going to preschool soon. Willcutt has a gorgeous PS that comes in under 6 pounds with Brazilian RW that has been for sale for over 11 years. 11 YEARS.
Hamer? Gone.
Update: now 'Hamer' the brand has returned in the form of Asian cheese logs.
Ovation? Gone. All production shifted to Asia in 2014.
Guitar Center? Full on implosion and waves of layoffs in 2015. Update: More layoffs in 2016.
UPDATE on Guitar Center: It's seven steps into junky junk land.
According to their 2012 NASDAQ filing (remember the failed IPO?) Fender listed a net income of $1.8m from a total revenue of nearly $174m (!!!) and is trying to get rid of the middleman by selling direct to customers via online ordering.
Just like a society cannot survive without a middle class, the guitar market cannot flourish without a middle class. When an industry makes its money on selling $10K guitars to a few at the top while trying to coax today's kids to talk mom and dad into buying a $99 starter kit, I suspect the writing is on the wall and the only sector of the market that is semi-steady is $100 acoustic beginner guitars bought around the holiday season (and abandoned on New Year's Day).
It's quite interesting to see the fates of the big three when it comes to Google interest trends over the years. Given the importance of internet sales of guitars this cannot be a good sign can it?
Fender
Gibson
PRS
One can search for individual brand models, for example the 'Fender Stratocaster' and the same downward trend is evident.
The only brands that deviate from the overall trend are new startups that people are curious about. For example, the "Kiesel" brand (rebranded Carvin guitars) deviates from the slow search engine death but we can expect that Kiesel will trail off just like Carvin has over the years once everybody realizes they have the same shitty necks with more bling and freakier freak show finishes.
Looking at the slow search death of famous guitar slingers that we identify with the Strat and the Les Paul, the guys we see gracing the covers of guitar magazines, shows, with some exceptions and variations, the same trend. Stevie Ray, Jimi, Slash, all going down hill. The troops routinely called on to pimp gear, guys like Vai, Satch, and the old classic rockers, interest in them is going down hill steadily. Even the fresher names are sliding.
The dead, bald, gray, and old still pushing guitars and stuff to the bald, gray, and old:
UPDATE: now GP magazine is wondering who will save the guitar! I can guess that it will not be Guitar Player magazine!
https://www.thegearpage.net/board/index.php?threads/guitar-player-who-will-save-the-guitar.1793840/
And who will save Guitar Player magazine? I just returned from the largest supermarket in the region and all of the guitar-related magazines are gone.
UPDATE: GP magazine is approaching zombie status.
And interest in guitar forums follows the exact same trend. As social media like FaceBook eroded the old bulletin board system it took with it the morbid excitement associated with "NGD" and replaced it wth a stream of vapid memes and cat videos.
Can the guitar industry survive? Well, of course, the guitar industry will survive in some form. I think the general trend across society applies to guitars as well: extreme polarization with a weird, collapsing middle zone. In academia, for example, schools have to choose which model they will pursue: Elite (e.g., Ivy League and Public Ivies); Mass Provider (community colleges); and the Student Life model for those schools operating in the perilous middle. In guitar terms we will always have a handful of wealthy white male collectors to buy a few guitars that cost as much as a car or a house or a family vacation but the number of builders in this range will shrink as the old white man numbers decline. And Fender, Ibanez, etc., can hang on by cranking out the cheap junk for the holidays (look at the wang bar Granny bought you for Christmas!). The interesting area will be the companies making the semi-affordable guitars in America. To hang on the transcendental logic of neoliberalism will have to be embraced more zealously such that ultra-niche marketing and small-batch production is further augmented with an emphasis on lifestyle branding that affixes their symbols to something other than old white men (I doubt we see another run of NASCAR-themed guitars). If you own one of those just punch yourself in the face.
They have attempted to lure young white women (every major company making guitars in the US has at least one signature model 'for the girls' but evidently this has not been enough, so far, to reverse the misfortunes of the guitar industry. There simply is no female guitar hero today that functions the way the iconic players of the 60s-80s did for male guitar buyers.
Head East!
Signs of contraction and stagnation in 2015 are all around us.
Heritage just demolished its production and sales force.
Rumor is that Parker Guitars is ceasing production soon. UPDATE: no longer a rumor, Parker is toast.
UPDATE: Thorn Guitars is gone.
Mesa Boogie quietly abandoned an entire line of amps and it was their only bid for a vintage sound. They now are placing their hopes in selling $2500 amps to pale Norwegians. Update: they've brought out a new amp called A Stripped Down Version of the Same Old Shit We've Been Cranking Out for the Last 20 Years.
PRS core set-neck production in 2014 was down approximately 5,000 units from just a couple of years prior -- even worse than the slowdown of 2009. Though, undoubtedly, the new S2 line has put a dent into the premium core line so this may actually work out in the long run, but it seems telling that Experience was canned the last two years in a row and the post-2008 strategy of artist relations pumping the guitar shop 'clinic' circuit is in full swing.
Gibson shed 5% of its workforce a few years ago and is currently the most despised employers in the musical instrument industry with a crummy work environment, high employee turnover, low wages, and wage stagnation.
UPDATE: Gibson just had its credit rating downgraded to Caa1 status.
UPDATE: Gibson has been downgraded again to Caa2 status: from junk to junkier junk
UPDATE: Gibson has been downgraded again to Caa3 status; we're talking about 9 degrees of junk.
Gibson is selling off property -- it owes a shit ton of money and is probably just plain screwed (2017 and 2018 are going to be terrible for Gibson).
UPDATE: Memphis factory up for sale.
UPDATE: Gibson is laying off Custom Shop employees.
The last time Gibson turned a profit my son was in Jr. High and now he's in college. Ugh. How many years can this last?
UPDATE: Gibson files for Chapter 11.
UPDATE: Gibson is now a blue jean company
UPDATE: Carvin is closing: "It is with a heavy heart that we announce that the Carvin Audio factory will be closing its doors after over 70 years. We are thankful for the many years we've had in this business and the support you all have given us. We'd like to thank all of you for your devotion to our gear and championing us live, in the studio, and on social media. We hope to see our gear live on in your musical lives for many years to come! Shortly, we will be making an announcement about our liquidation sale."
Suhr is selling out (or trying to) to some sketchy vape company. UPDATE: that fell through. Who wants to buy a business in a contracting industry?
Suhr is now down to selling $3500 guitars with fucking gig bags (and they're not the highest quality bags, either, I know, I have two of them).
The boutique builders conglomerate thingy is currently in full disintegration mode. Update: Dead.
High end dealers are currently sitting on new inventory that is 4 and 5 years old -- the stuff is not moving. Go check out Willcutt's PRS selection. Some of that stuff will be going to preschool soon. Willcutt has a gorgeous PS that comes in under 6 pounds with Brazilian RW that has been for sale for over 11 years. 11 YEARS.
Hamer? Gone.
Update: now 'Hamer' the brand has returned in the form of Asian cheese logs.
Ovation? Gone. All production shifted to Asia in 2014.
Guitar Center? Full on implosion and waves of layoffs in 2015. Update: More layoffs in 2016.
UPDATE on Guitar Center: It's seven steps into junky junk land.
According to their 2012 NASDAQ filing (remember the failed IPO?) Fender listed a net income of $1.8m from a total revenue of nearly $174m (!!!) and is trying to get rid of the middleman by selling direct to customers via online ordering.
Just like a society cannot survive without a middle class, the guitar market cannot flourish without a middle class. When an industry makes its money on selling $10K guitars to a few at the top while trying to coax today's kids to talk mom and dad into buying a $99 starter kit, I suspect the writing is on the wall and the only sector of the market that is semi-steady is $100 acoustic beginner guitars bought around the holiday season (and abandoned on New Year's Day).
It's quite interesting to see the fates of the big three when it comes to Google interest trends over the years. Given the importance of internet sales of guitars this cannot be a good sign can it?
Fender
Gibson
PRS
One can search for individual brand models, for example the 'Fender Stratocaster' and the same downward trend is evident.
The only brands that deviate from the overall trend are new startups that people are curious about. For example, the "Kiesel" brand (rebranded Carvin guitars) deviates from the slow search engine death but we can expect that Kiesel will trail off just like Carvin has over the years once everybody realizes they have the same shitty necks with more bling and freakier freak show finishes.
Looking at the slow search death of famous guitar slingers that we identify with the Strat and the Les Paul, the guys we see gracing the covers of guitar magazines, shows, with some exceptions and variations, the same trend. Stevie Ray, Jimi, Slash, all going down hill. The troops routinely called on to pimp gear, guys like Vai, Satch, and the old classic rockers, interest in them is going down hill steadily. Even the fresher names are sliding.
The dead, bald, gray, and old still pushing guitars and stuff to the bald, gray, and old:
UPDATE: now GP magazine is wondering who will save the guitar! I can guess that it will not be Guitar Player magazine!
https://www.thegearpage.net/board/index.php?threads/guitar-player-who-will-save-the-guitar.1793840/
And who will save Guitar Player magazine? I just returned from the largest supermarket in the region and all of the guitar-related magazines are gone.
UPDATE: GP magazine is approaching zombie status.
And interest in guitar forums follows the exact same trend. As social media like FaceBook eroded the old bulletin board system it took with it the morbid excitement associated with "NGD" and replaced it wth a stream of vapid memes and cat videos.
Can the guitar industry survive? Well, of course, the guitar industry will survive in some form. I think the general trend across society applies to guitars as well: extreme polarization with a weird, collapsing middle zone. In academia, for example, schools have to choose which model they will pursue: Elite (e.g., Ivy League and Public Ivies); Mass Provider (community colleges); and the Student Life model for those schools operating in the perilous middle. In guitar terms we will always have a handful of wealthy white male collectors to buy a few guitars that cost as much as a car or a house or a family vacation but the number of builders in this range will shrink as the old white man numbers decline. And Fender, Ibanez, etc., can hang on by cranking out the cheap junk for the holidays (look at the wang bar Granny bought you for Christmas!). The interesting area will be the companies making the semi-affordable guitars in America. To hang on the transcendental logic of neoliberalism will have to be embraced more zealously such that ultra-niche marketing and small-batch production is further augmented with an emphasis on lifestyle branding that affixes their symbols to something other than old white men (I doubt we see another run of NASCAR-themed guitars). If you own one of those just punch yourself in the face.
They have attempted to lure young white women (every major company making guitars in the US has at least one signature model 'for the girls' but evidently this has not been enough, so far, to reverse the misfortunes of the guitar industry. There simply is no female guitar hero today that functions the way the iconic players of the 60s-80s did for male guitar buyers.
Head East!
