Maybe the notion of a three day trip to China wasn’t my best idea but when Behringer called and generously invited Daddy’s to attend the 5th anniversary of the formation of Eurotec, the manufacturing arm of the Behringer company, the offer was too good to resist. Not only would we get to spend a day in vibrant Hong Kong but also get to observe first-hand the incredible manufacturing growth in China that has profoundly affected the musical instrument retail industry. The efficiencies of modern Chinese manufacturing, the low cost of labor and generous government subsidies has caused a price vs. features revolution in music stores. Our established expectation for price points on certain products has been ripped apart over the past few years. While this may be great for consumers in many ways, these changes have forced musical instrument retailers to radically change the way they do business. Suddenly lower prices in a limited specialty retail industry do not result in a larger volume of sales, but more frequently just cause smaller revenues. While $99 guitar/amp packages, for instance, do not attract many more customers to Daddy’s or any other musical instrument retailer, the lower price points have certainly attracted the attention of mass merchandisers who look at the popularity of musical celebrities today and believe that will translate into significant entry level instrument sales.
Frankly, they’re not wrong. It was widely reported that close to 1 million guitar units were sold to non-traditional musical retail outlets (Wal-Mart, Best Buy, Restoration Hardware, you get the picture). So the “big boxes†are happy, they’ve found a new source of revenues. The manufacturers are happy, they now get the volume in entry level goods that they felt the traditional music stores could not provide for them and, theoretically, there are more new customers exposed to the joy of making music. All well and good, except for one thing. This model doesn’t work.
These mass merchandisers cannot and will not do the work that will turn these first-time buyers into players. That kind of nurturing effort, built on the promise of future revenues if that young beginner sticks with the instrument is not in their business model, nor will it ever be. So we’re left with only the dedicated musical instrument merchants that can provide the lessons, the proper advice and the hand-holding that is necessary for the process of growing new musicians. Without new musicians, things start to change in a bad way and, unfortunately, if the current route of suppliers turning this entry level business over to mass merchants continues, I don’t see an alternative model out there. So, support your dedicated music merchants, like Daddy’s Junky Music Stores, for example!
But back to our original story, I’m here in Hong Kong and it is an exciting place to be. There’s lots on people in a very small space but it’s run well and there’s a lot going on.
I went the Peak Tram, a site located at 370 meters above the city and offers a spectacular view of Hong Kong, the harbor (3rd busiest in the world) and the buildings sprouting up over in China. Here’a daytime and a night time view.
Tonight we dined at one of two existing floating restaurants in Hong-Kong as Behringer employees and dealers have gathered from all over the world, a very enjoyable evening. Thursday and Friday promise to bring even more surprises, so the 22 hours I spent in the air to get here are looking better all the time. Plus, Cathay Pacific, the Hong Kong based airliner that covered the last leg of my journey, showed uncut versions of “The Departedâ€, “The King of Scotland†and “Queenâ€. Not bad. Will have more tomorrow.















