MARGIN PROPHET

AMPED UP

is the guitar industry going the way of Hendrix and Cobain? not necessarily: last year retailers sold $1.9 billion of new fretted instruments and related gear, up 9% from 2016. Andy Mooney,

Ceo of fender, based in scottsdale, arizona, says his famed ($500 million revenues) company increasingly caters to firsttime shredders.

Why are you optimistic about the guitar’s future?

Consumption of live and recorded music is at an all-time high. There are [nearly 200 million] people paying for digital streaming services, and livenation reports 82 million people went to concerts last year—up 21%. in fender’s case, we’re doing a good job of being a provider and marketer through digital channels. We’ve really stepped up our game online.

Will sales increasingly move to the Web?

it’s inevitable that it’ll be a higher percentage, but less than in other industries, because guitar players want to physically hold the guitar, hear how it sounds, plug into an amp.

What’s the business case for going after beginners?

about two years ago we did a lot of research into new guitar buyers. We found that 45% of the guitars we sell go to first-time players—much higher than we imagined. ninety percent of first-time players abandon the instrument in the first 12 months, if not the first 90 days, but the 10% who don’t commit to the instrument for life.