While only 10 percent of households purchased a musical instrument, this category enjoys the most rapid sales growth of any of the other product categories in the entertainment and recreational products marketplace. So while this is a narrow niche market, it offers significant growth prospects in the future, both for the purchase of new instruments and add-on purchases, such as accessories and sheet music.
More Americans than ever are making music, according to a new poll by the Gallup Organization. In the majority of American households (54 percent), at least one member plays a musical instrument. Because birds of a feather flock together, households with one musician are twice as likely to have other members who also play an instrument. Pianos, played by 34 percent of musicians, and guitars (22 percent) lead the list of favored instruments, with drums (6 percent), flutes (5 percent), clarinets (4 percent), saxophones (4 percent), keyboards (4 percent), trumpets (3 percent), and violins (3 percent) rounding out the most popular instruments.
Playing an instrument is not just kids' stuff anymore, with adults aged 35 to 50 (i.e., baby boomers) being the most active age group musically. Some 42 percent of amateur musicians are middle-aged Americans, while kids aged 5 to 17 make up 31 percent, and young adults aged 18 to 34, account for 27 percent of the musically inclined.
Given their commitment to music and musical training, Americans are purchasing musical instruments at the highest levels since 1978. In 2002, retail sales of musical instruments reached $5.1 billion, up a dramatic 17.2 percent over sales in 2000 of $4.3 billion (see Figure 7.9). The future of the musical instrument market looks bright throughout the decade as more and more affluent baby boomers trade in their older instruments for luxury models and higher-end instruments they now can afford to buy.
% CHG '00–'02
Total Personal Consumption in millions
Source: Bureau of Economic Analysis
Not surprising, music stores lead as the source where people are most likely to buy musical instruments. About one-third of consumers in the past year bought their musical instruments in music stores. The next most frequently used sources are other types of specialty stores, used by 27 percent to purchase musical instruments, and nonstore retailers, such as the Internet, mail-order catalogs, or television shopping, favored by 24 percent of buyers.
Riding the wave of musical enthusiasm is market share leader Guitar Center. This nationwide retailer, which just broke the $1 billion sales mark in 2002, operates 108 Guitar Center stores. It specializes in gear for rock and pop musicians, such as guitars, amplifiers, percussion instruments, keyboards, and professional audio and recording equipment. It also services school music programs with its American Music division of 20 stores that target teachers and band directors with band instruments for sale or rent. It is a multichannel retailer with its Musician's Friend direct response brand.
No other national retailer comes close to matching Guitar Center. Sam Ash, with about 30 stores and sales of $350 million, lags far behind in sales volume. As a result, musical instrument retailing in America remains largely a mom-and-pop business.
My household is one of the 10 percent across the country that purchased musical instruments in the past year. I believe we are fairly typical of the musical instrument buying household today composed of baby boomer generation parents and two millennial generation teenagers. Both my husband and I were "musicians" of sorts in the late '60s. I played piano for years and my husband was the lead guitarist in his own rock 'n' roll band. Once in college, though, we both lost touch with our music, only to return 25 years later with a renewed passion to play as our children began their own exploration of music.
Today, I take piano lessons every week and plan on upgrading our current instrument to a baby grand piano as soon as we expand our house, because we don't have room for one right now. My husband bought a fairly expensive guitar within the past couple of years and now takes weekly lessons also to learn blues-style finger picking. And my oldest son just got a new electric guitar and amplifier—one of our musical instrument purchases this year—though he doesn't take lessons yet.
But our youngest son is the family's true musician. He started with piano lessons several years before I did and inspired me to return to playing. This past year he became intrigued with the accordion, so we bought him a 60-button accordion appropriate for his size—another of our purchases this year. He is teaching himself the accordion and so far so good, but he has been complaining that he is having trouble with the finer points of the bellows and I expect we will add accordion lessons to his schedule next year.
He is also interested in getting a drum set and has picked out the one he wants for Christmas this year. Having told him he is not likely to get drums this year, he says he'll settle for a bass guitar. With his talent and widespread interests in all kinds of instruments, I see him as a budding young Paul McCartney, and have plans for him to help pay for college by performing his music live. He's likely to do just that.
Men are more likely to purchase musical instruments than women, with male purchase incidence at 13 percent, compared to female incidence at 8 percent. Two age groups are the most active purchasers of musical instruments: the most youthful adult households, aged 18 to 24, and middle-aged households, aged 35 to 44. The only other demographic factor that strongly influences the likelihood to purchase musical instruments is the presence of children in the home. Households with children under age 18 have a reported purchase incidence of 16 percent, compared to households with no children at 7 percent.
Men are more likely to buy than women.
Two age groups dominate: those aged 18 to 24 and 35 to 44
Households with children are more active buyers.