2022: The State of the Music Retail Industry Today
The Covid-19 pandemic affected most businesses and retail outlets in a negative fashion. However one of the few industries that saw growth was music instrument builders and lesson-oriented websites such as online guitar lessons. Despite live music disappearing there was an incredible push in music retail sales that led to 8.9 billion in growth! But as of 2022 the pandemic music sales boom has been in decline.
Before the Pandemic
The music industry has seen several rises and falls in instrument sales. In the mid 20th century, pianos were essential for most middle-class homes. As rock and other dance styles became popular it slowly waned and was replaced by cheaper and more portable instruments. Smaller instruments like ukuleles also went through ups and downs depending on what music was popular.
But the biggest instrument retail boom occurred with the guitar after the advent of rock music. The Beatles appearance on the Ed Sullivan Show in 1964 inspired many listeners to buy a guitar and start taking guitar lessons. The four lads from Liverpool caused the biggest uptick in fretted instrument sales in history, that is until the arrival of Covid!
Instrument and gear sales had already been selling well thanks to recording software on home computers and tablets. More people could afford to buy the equipment needed to learn or produce music and so the market was doing well. When Covid hit, people found they were stuck at home and in need of something to do! For new and old students this was the perfect storm to work on their guitar and other music skills.
The Boom of 2021
A couple important factors led to this boom that started in 2020 and peaked in 2021. The brick-and-mortar music stores were closed but large retailers like Amazon and Sweetwater were still operating, so products could still be purchased. And the second main factor in the increase was more government benefits were being given out. Many people who never could afford certain instruments and gear now had the extra cash.
This mixture of being stuck at home but still having money to spend at large music retailers broke the record of The Beatles 1964 boom. In 2021 alone here is how much sales increased for gear and instruments.
- • Acoustic guitar prices and sales rose by nearly 15% with an estimated 16 million first time buyers!
- • Electric guitar prices and sales rose by 30% which was a higher increase than the previous 10 years!
- • Ukulele sales have been rising for the past ten years, but the biggest jump was 15% between 2020 and 2021.
- • String sales for fretted instruments rose by 24% (which shows not everyone buys new strings! Since it doesn’t match the guitar sales.)
- • Pedals and effects units were also up by nearly 22%
- • Even karaoke machines were up by 38%! Apparently people were clamoring for Peloton’s, toilet paper, and music!
And it wasn’t just with instruments that we saw an increase in sales. By the end of 2020 recorded music and streaming sites saw a growth of 7.4%. Streaming has become the norm and many people were stuck at home so of course they listened to more music. The real surprise comes from vinyl record sales. 2021 vinyl record revenues were up 22%, this is the most money records have made since 1986 when the CD overtook it!
There was also a large increase in used instrument sales, places like Reverb.com reported a 50% increase! Other sites like Facebook Marketplace do not share their data but during 2020 and 2021 there were lots of gear and instruments also sold. 2020 started out rough, but by the end of 2021 being in the music industry was successful for most retailers.
The Decline in 2022
Now with the data of the first quarter of 2022, we can see that this huge boom is likely over. Retail’s sales are up 5.2% while Internet sales have lost about 10%. This makes sense as the brick-and-mortar stores are open now and so buyers can decide to get a guitar in person rather than ordering online. But even with the slight retail increase, the news is not so good.
The writing is on the wall that 2021 was the year that retail music shipments increased by 22% and gear suppliers up by nearly 19%. These are the best numbers the industry has seen since it started keeping track in 1992. But now the builders openly admit that the hysteria for fretted instruments has ended. Many guitars and ukuleles are on back order now and many companies have overstock issues.
While it’s a little early to historically say why this happened, there are a few factors that are likely the culprit.
- • People are back to work and have less time to have a hobby like music
- • The government aid allowed many folks to have the means to try music out, once it ended the sales numbers plummeted
- • Covid has caused several supply chain issues, some gear and pedals that use precious metals have greatly increased in price or are on backorder
- • GAS or Gear Acquisition Syndrome is very real, and many buyers went a little too far in 2021. The used instrument sites have more items available from those buyers who are now unloading unnecessary gear
With Covid still around and the current war in Ukraine going on it would be prudent to expect these sales numbers to decrease. Inflation is tightening budgets and people are hurting economically, which means less to spend on hobbies. Even music teachers and websites have seen a decrease in subscribers and followers. The biggest sales of fretted instruments since The Beatles will likely not be coming again anytime soon.
However it is not all doom and gloom! There wasn’t just an increase in guitar and instrument sales, there was a mass push for people to learn music. This will be beneficial in the long run, as these new players will eventually purchase new strings, gear, instruments, and lessons. The boom of 2021 may be over, but the number of new students in music will overcome any of the current economic downturns of 2022.
Data Sourced from MusicTrades.com