Is the music industry imploding? This sounds like a horrible topic to bring up, but it occurred to me because there are a couple of big bankruptcies going on right now that you may or may not be aware of. One of them is the venerable American guitar manufacturer Gibson. They have been around for over 100 years and they are one of the leading guitar makers in the world. Yet they are facing bankruptcy. Gibson owns many different brand names including drum companies, other guitar brands like Epiphone and Steinberger and more.
They carry a whole range of products, even pianos! Gibson has been involved in the piano business and owns names like Baldwin, Wurlitzer, Chickering, and Hamilton. So, they are an important segment of the piano industry. What got Gibson in trouble more than anything was expanding their business into consumer audio. They own Teac and Phillips. Perhaps they should have just stayed with their core mission of musical instruments because they were doing just fine with that for a long time. Hopefully, they will be rescued from bankruptcy and will emerge stronger once they let go of some of their ancillary businesses.
The other bankruptcy is one that’s extremely troubling and may be related in some way which I’ll explain in a moment. The other company trying to stave off bankruptcy is the huge retailer, Guitar Center. Any of you who follow Guitar Center may not be shocked by this because although they’re the biggest music retailer in the United States, they have been very leveraged for a long time. Purchased by private equity firm Bain Capital in 2007, they’ve amassed major debt having suffered through the economic downturn caused by the housing crises. All the while they have been opening up new stores at a furious rate. In fact, they’re so big that Guitar Center by themselves is bigger than the next 27 American music retail companies combined! So it is a big deal when a major force in the music industry like this is facing bankruptcy.
Part of it I think has more to do with guitars than anything else because people were buying guitars at a voracious rate not that long ago and things have stabilized somewhat which could explain both the Gibson and Guitar Center bankruptcies. I’m sure there’s a lot more to it and I believe that some of this may be coincidental. It just seems shocking that two major companies are facing bankruptcies at the same time. Music will always be with us. I am an eternal optimist in this regard. But we all have to do our parts to support music wherever we can and in any way as educators, performers and as audiences. So let’s keep music alive and hope these companies emerge stronger and fresh companies grow in the music industry so future generations can enjoy music.