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 The Scottsdale, Arizona company is launching
"Fender Play," an online system for learning guitar that Chief
Executive Officer Andy Mooney, a veteran of Nike and Disney,
hopes will cut down on the number of would-be guitarists who
give up. He said 45 percent of the company's guitars sell to
first-time players, but 90 percent abandon the instrument within
a year and never become repeat customers.
"The 10 percent who make it through the first year own an
average of seven guitars," Mooney said in an interview. "When we
gathered the data and looked at the facts, we said, 'Oh my God,
if we just reduced the abandonment rate by even 10 percent, we
could perhaps double the size of the industry.'"
The musical instrument industry grew 9 percent to $7.1 billion
in retail sales over the past five years but remains well below
its 2005 peak of $7.7 billion, according to data from The Music
Trades magazine.
Moreover, the electric guitar was virtually absent from the Top
20 music charts in the past five years. The guitar industry
hoped video games like "Guitar Hero" would ignite interest among
teenagers. Instead, electric guitar sales fell from 1.2 million
units in 2011 to just over 1 million in 2016, according to The
Music Trades. The overall guitar market held steady at around
2.5 million units per year during that period, thanks to growth
from acoustic instruments.
Fender Play aims to address some key trends, Mooney said. About
half of first-time buyers are women, according to Fender's
research, and they are buying acoustic guitars online and going
to sites like YouTube for lessons. For those new players, he
said, traditional music stores can be intimidating.
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After a free introduction, Fender Play costs $19.99 a month and
consists of a series of video lessons that assume no prior
knowledge. Mooney said his model was Lynda.com, the online learning
platform acquired by LinkedIn for $1.5 billion that defied
expectations it could not compete with free videos on the internet.
Next year, Fender will make an instructor edition available to
dealers so they can use it to manage their guitar students. Fender
will compete with other fee-based sites like JamPlay, but is the
first guitar maker to dive into the online learning market.
Brian Majeski, editor of The Music Trades, said including dealers
should help Fender avoid the impression that it competes with stores
for guitar students. He called the software initiative a credible
strategy to try to spur growth.
"All the pieces are there," Majeski said. "But this is uncharted
territory."
(Reporting by Stephen Nellis; Editing by Jonathan Weber and Andrew
Hay)
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