|
The 2023 sales trajectory of the music products industry, as detailed in the newly released Music Trades Music Industry Census Report, validates Isaac Newton’s famous “Third Law” of motion: for every action, there is an equal and opposite reaction. Roughly four years ago, the curtailment of nearly all public gatherings during peak COVID prompted “action” by the American public leading them to embrace a multitude of at-home-entertainment options, much to the benefit the music products industry. Instrument sales surged to an all-time high. Now that COVID-era restrictions are a fading memory, there has been an equal and opposite “reaction”--a mad rush to get out of the house, take a trip, go to a concert, visit friends, or frequent a restaurant. In 2023 year over year spending on air travel was up 36%, concert ticket sales advanced 14.7%, and spending at restaurants jumped 11%.
This shift in spending priorities, coupled with inflationary pressures, weighed on the music products industry last year. Music Trades data shows that the 2023 estimated retail value of new musical instruments, pro-audio products, print music, recording gear, and related products declined 4.2% to $8.3 billion from last year’s level of $8.7 billion. Despite the decline in dollar terms, the year was the still third biggest in industry history. Adjusted for inflation though, it closely approximated the pre-COVID levels of 2019. There was some good new to be found in the down year though. Post-COVID, the music products industry fared better than many other discretionary consumer durables: to cite one example, exercise bike maker Peloton’s 2023 revenues were 45% below its pandemic peak.
Relatively modest revenue declines in 2023 masked continued upheaval at every point in the distribution channel. Manufacturers worldwide ramped up production in 2021 and early 2022 to address the unexpected increase in consumer demand but ended up overshooting the mark, leaving the industry awash with inventory. From quarter to quarter during 2023, import volumes fluctuated as much as 130% in some product categories, simply because there wasn’t sufficient warehouse space to accommodate additional shipments. The industry-wide glut prompted drastic measures: products offered to mass merchants at favorable terms, “B” stock blowouts, and other efforts to bring inventory into alignment with demand. With fourth quarter import volumes comparable to pre-COVID levels, indications are that balance has been more or less restored.
The music products industry is actually made up of over a dozen discrete product categories, each with its own consumer base, distribution channel, and market dynamics. With the school music market, for example, enrollment levels and public spending on education are the prime sales drivers; for fretted instruments, popular music trends are what move the needle; and for software-based recording products, advances in processing speed, the cost of memory, and now artificial intelligence determine sales levels.
The Music Trades Industry Census is a powerful tool for understanding the dynamics of these divergent product categories. It provides ten years of sales data for 50 discrete products, along with cogent analysis explaining why sales went up, down, or remained stagnant. This data, available nowhere else, is a potent tool for identifying untapped markets and gauging progress. After all, it’s hard to improve what you can’t measure. To get your copy, visit:
www.musictrades.com
| 
