market report - Australian Music Association

Transcription

2004/2005
M ARKET REPORT
A Comprehensive Analysis of the Australian Music Products Market
Copyright: All information provided in this report is
the copyright of the Australian Music Association. Fully
paid-up members of the Association are authorised to
use this information whilst they remain members of the
Association. All other usage must be authorised in writing
by the Australian Music Association and a fee may apply.
All usage, whether by members or non members, must
be attributed to The Australian Music Association.
The information provided in this report is prepared based
upon import data received from the Australian Bureau
of Statistics. It is therefore reliant on the accuracy of the
industry’s product coding of imports at point of entry. To
the maximum extent given by law neither the association,
its committees or its contractors accept any liability for
loss or damage arising as a result of any person acting
upon the information contained in this report. The report
should not be relied upon or used as a substitute for
detailed professional advice.
Contents
Executive Committee
2
Drums and Percussion
26
Australian Music Association
3
- Drum Kits
27
4-6
- Individual Drums
27
- Cymbals
28
- Education and Other Percussion
28
Music Makers Program
Australian Music Association Awards 7
Honour Roll
8
Australian Music Association Convention 9-11
Guitars
29
12-14
- Electric Guitars
30
Economic Overview
15
- Bass Guitars
30
Understanding the Data
16
- Acoustic and Acoustic Electric Guitars
31
- Guitar Strings
31
- Guitar Amplification
32
Market Summary 2004
Keyboards
17
- Upright Pianos
18
- Grand Pianos
18
Digital Electronics
33
- Secondhand Pianos
19
- Computer Music Software
34
- Digital Pianos
19
- CAMS
34
- Electronic Keyboards
20
- Synthesizers
35
- Electronic and Institutional Organs
20
- Other Electronic Instruments
35
Brass
21
Professional Audio
36
- Trumpets, Cornets and Trombones
22
- Speakers
37
- Other Brass
22
- Amplifiers
37
- Signal Processors
38
Woodwind
23
- Mixers and Multi Track
38
- Flutes
24
- Microphones
39
- Clarinets
24
- Saxophones
25
Traditional Instruments
40
- Other Woodwind Products
25
Orchestral Stringed Instruments
41
Print Music
42
Accessories
43
DJ Products
44
2004/2005 MARKET REPORT
Executive Committee
Executive Committee 2004/2005
President
Vice President
Treasurer
Graham Hoskins
Brendan Callinan
Daryl Miller
Concept Music
Roland Corporation Australia
Sydney Guitar Trader
Wembley, Western Australia
Dee Why, New South Wales
Randwick, New South Wales
Phone: 08 9381 2277
Phone: 02 9982 8266
Ph: 02 9398 9356
Fax: 08 9381 2477
Fax: 02 9981 1875
Fax: 02 9326 6545
conceptm@iinet.au
bcallinan@rolandcorp.com.au
guitartrader@optusnet.com.au
Mark Amory
Tania Celata
Sandra Lindsay
Yamaha Music Australia
Alfred Publishing
Musos Corner
South Melbourne, Victoria
Caringbah, New South Wales
Newcastle West, New South Wales
Phone 03 9693 5111
Phone: 02 9524 0033
Phone: 02 4929 2829
Fax 03 9699 2332
Fax: 02 9524 0023
Fax: 02 4949 3134
mark_amory@gmx.yamaha.com
tcelata@alfredpub.com.au
sandra@musoscorner.com.au
David Bell
Dominic DiSisto
Anthony Ruggeri
Jands
Holden Hill Music
Music Centre Gosford
Mascot, New South Wales
Holden Hill, South Australia
Gosford, New South Wales.
Phone: 02 9582 0909
Phone: 08 8266 2699
Phone:02 4325 4900
Fax:
Fax: 08 8369 0307
Fax: 02 4325 5222
dbell@jands.com.au
ddisto@bigpond.com
musiccentre@trentvale.com.au
Bernie Capicchiano
David Green
Rob Walker
Musico
Rode Microphones
Allans Music Group
Ringwood, Victoria
Silverwater, New South Wales
Richmond, Victoria
Phone: 03 9872 5122
Phone: 02 9648 5855
Phone: 03 8415 8003
Fax: 03 9872 5127
Fax: 02 9648 2455
Fax: 03 8415 8088
bernie@musicland.com.au
david@rodemic.com
rob.walker@allans.com.au
Committee Members:
02 9582 0999
A U S T R A L I A N M U S I C A S S O C I AT I O N
The Australian Music Association represents and
AMTN - e-newsletter
furthers the interests of the musical instrument, print
A monthly electronic newsletter providing information relevant to
business owners and managers - from privacy to trade practices, and
from industry news to management views.
music, pro audio and computer music industries.
Membership currently stands at 425, which is a record high, having
grown by more than 50% over the past four years.
Music Makers, the AMA’s market development program, continued
to gather momentum in 2004/5 and by year-end thirty five wholesalers
were participating. See next pages for more information.
The following are the member activities undertaken by the AMA.
Member benefits
AMA members have access to a range of member benefits
including:
• Specialist competitively priced business insurance from AON,
one of the world’s largest insurance companies. These packages
are designed for the specific needs of music products retailers.
• Competitive rates for travel agency services, including hotels and
flights through ShowGroup, a specialist music and entertainment
industry travel agency.
• Corporate rates for car and van hire through AVIS, the leading
car hire company.
AMAC - Australian Music Association Convention
Australia’s only trade event for the music products industry. AMAC
brings together over 1,100 industry personnel for three days on the Gold
Coast in September each year. AMAC activities include training and
professional development sessions, entertainment and social events
plus over 4,000m2 of trade show featuring a record 90 plus exhibitors
in 2005.
Statistics - annual and quarterly reports
These annual and quarterly reports provide the foundation for
objective and analytical business planning. Based on the declarations for
duty received by the Australian Customs Service, these reports measure
imports to show trends, volumes and values, and after eight years now
provides a comprehensive profile of the music products industry. The
annual report is free to members. Fees apply for the quarterly reports.
www.australianmusic.asn.au
Amazingly popular website which receives around 30,000 unique
visitors each month. The most popular of pages are the Australian
Musician section and the search engine for find a product’s distributor
and find my nearest retailer. A free self-managed listing is available to
all AMA members.
Quick Finder Directory
A neat, desk-drawer sized directory that lists all
wholesaler members and the brands they distribute,
plus retailers and associates. Very handy on the
shop floor as well as for sales reps on the road.
Rapidly becoming the ‘industry bible’. Free listing
for members.
Australian Musician
Australia’s only magazine for contemporary musicians continues to
go from strength to strength and in November 2004 celebrated its tenth
anniversary! Encompassing pro audio, guitars, amps, drums, stage
keyboards, performance and recording
equipment, dance and DJ, and DE, the
magazine showcases product, music and
musicians of all styles. Member retailers
receive up to 100 copies to give away
free to customers each quarter and
member wholesalers receive discount
advertising rates.
For more information about the initiatives above or
how to join, contact:
Ian Harvey
Executive Officer
MBE 148/45 Glenferrie Road, Malvern. VIC. 3144
Phone: 03 9527 6658
Fax: 03 9507 2316
Email: info@australianmusic.asn.au
Music Makers
Music Makers
The AMA has taken the leadership in developing and presenting a
way forward to secure a profitable and vibrant future for our industry, and
for active music making in Australia. That way forward is Music Makers,
a major initiative that came to fruition during 2002, was launched to the
community in 2003 and is already delivering tangible benefits.
Quite simply, Music Makers is the
future of the industry. It’s a deceptively
simple idea. Wholesalers can
opt to remit a set percentage
of their sales revenue through
a confidential mechanism to
the AMA where it is used
for market development
activities.
Participating wholesalers
attend an annual Music
Makers Summit during which
the decisions are made about how
to invest the funds collected. The
inaugural Music Makers Summit was in July
2002, and since then a Summit has been held each year, the outcomes
of which have provided a clear and unified direction for how the funds
collected should be invested.
During 2004/5 the following will be implemented under the umbrella
of the Music Makers Program.
Building the brand
Building a brand takes time, and the Music Makers logo is becoming
a familiar and recognised image across the industry and across the sector
more broadly. Of course, brands don’t create themselves, so the AMA is
taking a pro-active stance to build Music Makers into a brand that Australia
recognises and values. This includes communications with retailers as well
as within the broader community, to promote the overall initiative and the
activities it supports, along with the companies providing the funding.
Weekend Warriors
During 2004/5 Weekend Warriors has continued to gain momentum.
The program is a ‘come-back-to-the-band program’ for baby boomers
- 40, 50 and 60 year olds
who played as teens but
whose guitars have been
gathering dust for the
last decade or two in a corner or under the bed. Fortunately for both
the Warriors and the music products industry their passion for making
music hasn’t died – it’s just been put on hold while career and family
took precedence. Now, well established in their careers and with the
kids less demanding of their time the Warriors are keen to get back into
making music with some mates.
Warriors is enormous fun for the returning musicians, and for the
store hosting a program it delivers profitable, high end sales. Warriors
sites now operate in most states and capital cities as well as some key
regional locations. The Music Makers funding provides training and
support for participating stores. Fees apply. Call the AMA if you want
to be part of the Weekend Warriors action.
Weekend Warriors is available in Australia due to the support from NAMM
The International Music Products
Association and Skip’s Music, USA.
Music.Play for Life
Building on the experience of the highly successful American Music
Conference (AMC) program, Music Makers and the AMA have partnered
with the Music Council of Australia, the peak body for music, and ASME,
the peak body for music educators, to create a grassroots coalition to
lobby for and help develop more music in schools and in the community.
Called Music.Play for Life, it was launched in May
2004 by Senator, the Hon Rod Kemp, (Minister
for the Arts and Sport) and the Hon. Brendan
Nelson (Minister for Education, Science
and Training) at the Powerhouse Museum
in Sydney.
Music.Play for Life is now making a
significant contribution to the development of
music making throughout Australia. Some of its activities in the past
year included:
• Gathering support and submissions to the National Review of
School Music Education. Music.Play for Life activated over
4,500 Australians to write to the Review, resulting in it being the
largest ever response to a Government Review, ensuring
that music and music education is firmly on the agenda for policy
development
• Introduction of the FLAME awards – run in conjunction with ABC
Classic FM, these awards recognise inspirational music education
programs throughout Australia. The Awards raised significant
interest from schools and media around Australia and provided
an important PR lead into the National Review of School Music
Education report and announcements.
Music.Play for life has also:
• Provided support and advice for school parent and community
groups seeking to introduce, develop or expand their musical
activity
• Presented the arguments for a more musical community at many
conferences
• Written many articles in papers and journals on the value of music
in education and as an element of a healthy, well balanced life.
For more information about Music.Play for Life go to the website at
www.mca.org.au Sign up for the free e-newsletter and order stickers
to distribute in your community!
Music Makers
Music in Action
Investing In Our Schools
The key to growing the number of musicians in our community lies with
music educators. Without them it would be hard for music to continue to
exist. Music Makers is funding Music in Action, a quarterly magazine for
music educators that provides practical and applied information to help
them meet the constant challenges of engaging and inspiring their students,
and to fight for the resources and recognition their music programs deserve.
The editor is Ann Blore, widely regarded music educator and past national
head of the AMEB. Music in Action continues to be a ‘must read’ magazine
for classroom music educators Australia-wide.
The Investing in Our Schools program grew out of a 2004 election
policy by the Federal Government. Over four years the Government
will allocate $1 billion to schools for the development of infrastructure
and teaching resources. The only issue was that the list of approved
purchases didn’t include music. At meeting with Dr Brendan Nelson he
quickly offered to resolve this. In the initial tranche of applications more
than 220 schools from across Australia were granted funding of nearly
$5 million for music programs, instruments and facilities. The products
approved for purchase included pianos, brass and wind instruments,
tympani, music technology studios, and professional audio products for
use in school performing arts facilities.
Music Makes the Difference
More than 100,000 copies of the Music Makes
the Difference brochure have been distributed across
Australia during the past year making it an important
tool in the development of an understanding of the
benefits of learning music within the community.
National Review of School Music Education
Never since Australia was established in 1901 has there been a review
as significant as this into music and its role in education. The Review
was jointly commissioned by Federal Education Minister Dr Brendan
Nelson and Federal Arts Minister Senator Rod Kemp and sought to
establish the strengths and weaknesses in the provision of music in
Australian schools.
The Australian Music Association was invited to take a place on
the Steering Committee ensuring the Association had a key role in the
development of the report. Additionally, the AMA in conjunction with
Music.Play for Life and Music in Action was largely responsible for
generating a record 5,936 submissions to the Review and a significant
amount of PR around the issue.
The recommendations from the Review and the actions to follow will
be available in the near future.
Government relations
Governments organise education policy, specify curriculum and
fund either directly or indirectly all Australian students’ learning of music
through kindergartens, schools and universities. Governments therefore
are just as much our partners in the conduct of our business as are music
teachers, piano tuners, luthiers and repairers. It is only natural for us as
an industry to seek to have effective, open and ongoing relationships
with governments throughout Australia.
National Review of School Music Education
This Review and its outcomes have the potential to shape the role of
music education and music in education for the next fifty years. The AMA
has worked closely with the Federal Government in shaping the Review
and ensuring that it was well supported through public submissions.
The Association will continue to work with governments on taking the
recommendations forward and turning them into policy.
This funding continues until 2008 and more music programs will
receive support over this time.
The Band Thing
Piloted during 2003/4 was
a music-based intervention
program for at-risk and disadvantaged youth. Called The Band Thing,
this program enables otherwise under-performing kids to build their self
esteem and confidence, and better engage with their school studies.
The pilot was so successful that the school, Glenala High in Brisbane,
has adopted it into their existing programs, and has also further
developed it to help the kids graduating from its nine feeder primary
schools to integrate more quickly and positively. The program is now
being evaluated by Queensland’s Department of Education for possible
rollout State-wide.
Amp’d Up
This program encourages kids from 8 to 14 years to become involved
in music making, using contemporary styles and instruments such as
guitar, keyboard, drums and DJ gear. The program is run over 3 or 5
days during school holidays and can be customised to be either an
introduction to music making or a developmental program for those
already playing. It has been particularly attractive for kids who are in
traditional music programs and are seeking a contemporary music
experience.
S’kool Music Live
Like Amp’d Up and The Band Thing, S’kool Music Live is focused
on contemporary music. S’kool Music Live is a pilot program being
conducted in Adelaide that brings rock music into the classroom.
Participants are coached by a leading musician through to a final
performance that features full lighting and sound. The coaching not
only helps the kids develop their music but guides them on the skills
and techniques required to create a great performance. The program’s
potential is being assessed for its commercial introduction in 2006.
Music Makers
Public relations
Partnership with the Australian Music Therapy
Association
A key role of Music Makers
is to promote music making
within the community, ensuring
that there is a music making
proposition for everyone
irrespective of age, gender,
musical interest or reason for
wanting to play.
An outcome from the Second Music Makers Summit in July 2003 was
a partnership with the Australian Music Therapy Association (AMTA). This
relationship continues to develop and the AMA and Music Makers were
able to help support music therapy internationally at the 8th International
Music Therapy Congress which was held in Brisbane in July 2005. The
AMA also assisted AMTA in securing funding for the Congress from the
International Foundation for Music Research (IFMR).
The Music Makers public
re l a t i o n s a c t i v i t i e s h a v e
provided the industry with
hundreds of thousands of dollars-worth of additional public exposure
this year. The activities included:
National Review of School Music Education – Channel Seven’s
Sunrise program (20 minutes) and Mornings with Kerrie Ann, on Channel
Nine (10 minutes). Over an hour of air time of local and national radio
was generated. Major print articles also appeared in metropolitan and
national newspapers.
Weekend Warriors – continued interest from media (especially radio)
about the babyboomers phenomenon, their love of music and their
desire to play has seen continued media coverage following last year’s
successful media launch.
Music and Health – a public relations program supported the 8th
International Congress of Music Therapy (Brisbane July 2005) focusing
on the links between music, health
and well being. Articles and interviews
appeared in major newspapers and
on radio.
Music.Play for Life developed
a series of articles for the medical
magazine arts and medicine –
distributed to all doctors nationally.
Flame Awards – national media
coverage of the inaugural Flame
Awards, which highlights inspirational
school music programs, kicked off
what is set to become an annual event.
Australian Musician - Australian Musician magazine received strong
public relations support when in December 2004 it announced the
findings from its first readers’ poll. The extensive coverage included radio,
press and internet support from as far a field as The Times of India. The
media release was last seen doing the round of fan sites in Poland.
In the coming year the AMA and AMTA will be developing consumer
materials and a public relations campaign that outline the health and
well-being benefits of music participation throughout the community.
Wholesalers supporting Music Makers
Without funding Music Makers would not exist. The following
wholesalers, representing around 65% of the value of the industry, made
a contribution from sales every quarter during the past twelve months
to enable the program not only to operate, but also to grow.
Allans Publishing
Alfred Publishing
Audio Products Group
Australian Orchestral Supplies
Australis Music Group
Balanced Music
Central Musical Instruments
Colonial Leather
Dynamic Music
Electric Factory
Epoch Strings
Encore Music
Ensemble Musical Instruments
Hal Leonard Australia
Intelliware
Jacaranda music
Jands
Lamberti Bros
LSW
Magic Flutes International
Musical Merchandisers
Music Junction Imports
Musico
Music Sales
National Music
Network Entertainment Technology
Pro Music
Rode Microphones
Roland Australia
Sibelius
Shriro
Sydney Guitar Trader
The MIDI People
The Resource Corporation
Yamaha Music Australia
AMPAL, the Australian Music Publishers Association, also
makes a welcome contribution to Music Makers, co-funding the
print music contribution with the music publishers.
Australian Music Association Awards 2005
Every year the Association presents a number of awards to reward excellence
in the industry over the previous year.
This year awards were made in nine categories - some where
wholesalers nominated great retailers and some where retailers
nominated great wholesalers, and some for the industry as a whole.
Nominations were called for from members and adjudication was by
an expert panel, nomination or secret ballot.
Best wholesaler website
This year for the first time separate awards were made to both field
sales and internal sales representatives acknowledging the importance
of both roles and the different skills required.
Best consumer website
Representative of the Year
Western Australia: John Zaccaria of MusicLink
Victoria/Tasmania: Marlon Buitenhaus of Australian Orchestral
Supplies/Kurt Jacob
Queensland: National:
Bernard Crowe of Yamaha Music Australia and
Jason Matulaitis of Pro Music – joint winners
Craig Parker of Rode Microphones
South Australia/
Northern Territory: Jamie Kuijpers of MusicLink.
New South Wales: Doug Vasiljevich of AMS
And the overall winner of best sales rep for 2004 was:
Doug Vasiljevich of AMS
Representative of the Year – Internal Sales
Winner:
Lyn Walker – Yamaha Music Australia
Finalists:
Tony Alderman – Australis Music Group
Richard Courtney – Australasian Music Supplies
Australian Made
Winner:
Dynamic Music
Finalists:
Australis Music Group
Winner:
bmusic.com.au
Finalists:
billyhydes.com.au
massonmusic.com.au
musicexpress.com.au
musicianswarehouse.com.au
Best presented store
Winner:
Kosmic Sound, Perth, WA
Finalists: Allans Music, Melbourne
Billy Hydes Music, Parramatta
Buzz Music, Cairns
Ellaway’s Music, Brisbane
Lathams, Westfield Kotara
mymusic megastore, Penrith
Training and retail support
Winner:
Finalists:
Dynamic Music
Musiclink
Best market development initiative
Winner:
Investing in Our Schools
Finalists:
Sydney Guitar Show – Allans Music Group
Winner:
Rising Software – Aurelia software
Finalists:
Accent Publishing – Encore series books
Allans Publishing – Piano for Leisure and various song books
Balanced Music – Balanced drum sticks
Best newcomer
Epoch Musical Instruments – Epoch violin
Joint winners:
Jade Amplification – Shadow15 and
Hurricane100 series guitar amplifiers
Tomoko Allen – Roland Corporation and
Adam Swaitowy – Hal Leonard
Finalists:
Joshua Blackshaw – Yamaha Music Australia
Erin Butler – National Music
Marianne Choi – Zephyr Music
Robin Clements – The Music Spot
Tom Crowley – Behringer
Warwick Dunn – Encore Music
Eddie Middleton – HQ agencies
V Drum Expo – Roland Corporation
Weekend Warriors
Honour Roll 2005
In 2001, the AMA inaugurated the Honour Roll - a new prestigious award to enable us to recognise members
of our industry who have made a significant contribution over time and without whom our industry would not
be the place it is.
Honour Roll recipients include:
Mr. John Payton, Snr
Inaugural Honour Roll recipient and the managing director of F Payton & Son.
Mr. Bill May
The founder of Maton Guitars, one of Australia’s leading guitar manufacturers.
Mr. Alan Rose
The founder of Rose Music, which in 1986 became Yamaha Music Australia.
Mr. Geoff Brash
Managing director of the Brash’s family business until 1989, and a strong supporter
of Soundhouse Music Alliance.
Mr. Neville Chambers
The owner of Ensemble Musical Instruments, a founder of the AMA, past President and Executive
Committee member every year since inception until September 2003, when he chose to stand down,
and long serving member of Rotary and Rotary music initiatives.
Mr. Tony Lamberti and Mr. Frank Lamberti
Founders of the Lamberti Brothers business, and one of the first music products
wholesalers in Australia. Their inclusion in the Honour Roll was in recognition of their
pioneering role and for their support for retailers over many years.
Mr John Egan
Former managing director and current chairman of Roland Corporation Australia. He is a past president of the
AMA, was a member of the Executive Committee for many years, is a past committee member of the Australian
Contemporary Music Institute, and the chairman of The Executive Connection, an international organisation providing
mentoring and coaching for senior management.
No Honour Roll award was made in 2005.
Australian Music Association Convention
2005 was a year of consolidation for AMAC, its second year at the new Gold Coast Convention and Exhibition
Centre. Once again there was a record number of exhibitors covering more than 4,000m2 of exhibition space
and they were visited by a record 313 retail businesses from all over Australia and New Zealand.
was second to none. To mark the strength of the guitar business during
the past year our AMAC entertainment focused on the guitar in all its
shapes and forms - kicking off with Orianthi, who has both the licks
and the looks to become an international star of the future. Dave Hole,
who is already an established blues and slide star played Club AMAC,
classic guitarist Jochen Schubert joined flautist Thomas Pinschof for
some classics at the Gala Dinner where the guitar as an accompanying
instrument featured strongly supporting some great songs from Mark
Seymour as well as the comedy of Tripod.
Elsewhere there was plenty of music. Awarding winning blues
artist Anni Piper, Daryl Cotton and his band, Wilbur Wilde and US
Hammond player Tony Monaco were amongst the talent on display at
AMAC2005.
AGM
Highlights of AMAC 2005 included:
Trade show
Products on show included musical instruments, professional audio,
lighting, print music and computer music, as well as industry suppliers
such as financial management and business insurances. AMAC is the
once-in-a-year opportunity to see the industry as a whole, catch up on
new products, and sit down with suppliers and retailers to plan your
future business together.
President’s Breakfast
Managing and developing staff is a critical part of any business, and
none-more-so than in the music products industry. But first you have
to find them and make sure they really do have the skills and personal
qualities you need. James Hargreaves, AMAC2005 guest speaker, told
the 300-strong breakfast audience just how to find the best people and
how to make sure they’re right for you and your business.
Traditionally held during AMAC, the AGM attendees vote for the
new members of the Executive Committee and hear a report of their
Association’s performance during the previous year. At the 2005 AGM,
the Association was pleased to report that once again membership was
at a record high, the accounts continued to show the Association is in a
stable financial position and that Music Makers has now built momentum
to the point where 35 contributing organisations had provided over
$600,000 in income allowing those funds to be invested into the critical
market development programs needed by the whole industry
AMAC 2006
AMAC 2005 will be held at the Gold Coast Convention and Exhibition
Centre on 9-11 September 2005.
Professional development and clinics
These sessions are designed to offer practical guidance for retailers.
This year’s speakers focused on Marketing to Women, that other 50%
of the population who don’t come through your front door as often as
you might like and Trade Practices – covering all the things you need to
know before you greet each and every customer.
Sitting beside the professional development sessions are a dozen or
so product clinics covering all the segments that make up our diverse
industry such as print music, guitars, professional audio, woodwind
and brass, and more.
Social events
The AMA Gala Awards Dinner was the largest yet, with some 620
people seated for dinner and entertainment. And the entertainment
AMAC 2005 Gala Dinner
Excerpts of a speech from Dr Brendan Nelson, Federal Minister
for Education, Science and Training
September 11th 2005
To all of you who are musicians, teachers, wholesalers, retailers,
everyday Australians who are working hard to create wealth for your
families and our country, thank you very much for everything thing that
you do every single day of the week, often in spite of governments not
because of them. It’s interesting, I’m pleased to be here too, because
this is one of the few audiences where I can speak about Roy Buchanan
and someone knows exactly who you’re talking about. He was one of
my idols as far as guitar playing goes anyway.
It’s interesting, I’ve had the privilege to be this country’s Minister for
Education, Science and Training for almost four years, and I know many
of you would be very happy if I just stopped doing it. But I remember half
way through my first year, and I had been in public life for about 15 years,
and I had suggested to Slim Dusty after the death of Neville Bonner, who
had been the first aboriginal Australian elected to the Federal Parliament,
that Neville’s life would making an inspiring story for a song. So he and
Joy wrote a song called “Bonner”, and I was invited along to the launch
of “Travellin’ Still Always Will”, the 103rd album. Slim asked me up on
stage to sing with them which I did, and it was broadcast on Channel
9 and 7, and with a couple of other people. The following morning I
get off the plane in Wagga, and this guy looks at me and says, “I know
you”, he said, “you’re the bloke who sings with Slim Dusty.” So I can
thank music for also helping to raise my profile.
‘…one of the things I’m determined
to do once we receive the Report
of the Review is to really drive
the introduction of music into all
schools in our country.’
You might also be amused to know that when Abdullah Badawi, the
Malaysian Prime Minister, was in Australia in April, our Prime Minister
asked me if I would attend a dinner with him in The Lodge, so I said,
“yeah, OK”. There was only a small group of 8 or 9 people for dinner
and Minister Downer and our Prime Minister were talking about karaoke
with the Malaysian Prime Minister. And then John Howard lent across
and said “Brendan do you sing or play a musical instrument?” “Funny
you ask me Prime Minister, I am actually learning to play the guitar as
one of the regrets of my life is that I didn’t learn when I was a young
man.” It was with some astonishment that he then said “what haven’t
you got enough to do?”
Music and arts, and also creative arts and all of those things they are
ultimately the things that define who we are. And I’m a devotee of Roy
Buchanan, but I’m also a devotee of Slim Dusty and before him Buddy
Williams and many others. And it’s those men and women and those
of you who spend your lives in music, writing , performing, producing,
10
selling, promoting music in all its forms, it’s you who pass the soul from
one generation to the next. And no matter how concerned any of us may
be with our economic or scientific problems of life, our values and our
beliefs, the way we relate to one another and see our place in the world,
they’re the things that ultimately define our destiny and who we are.
The National Review of Music into which I’ve put $334,000 of
your money which is being headed by Margaret Seares, the Review is
documenting things that many of you have known for a long period of
time, and one of them is, we estimate, that about 70% of the nation’s
school children are not being exposed to or learning music in any
meaningful form throughout their school life.
Aristotle made the observation that music has the power to have
an influence on the moral character of the soul and as such that young
people should be directed toward it and educated in it. So... it’s about
our aesthetic, cognitive and experiential development. It helps determine
in every sense the sort of adults and human beings that we ultimately
become. One of the things that I’m determined to do once we receive
the Report of the Review is to really drive the introduction of music into
all schools in our country.
It shouldn’t matter where you live or whatever your circumstances
or the economic means of your family, every child in this country has no
less a right to learn how to play a musical instrument than they do to
learn to read, write, count and communicate.
And one of the other things toward that end and one of the things I
was discussing with Graham and Brendan when he was the President
of the AMA, you’re AMA, we were talking about musical instruments
in school and musical infrastructure and it was at that meeting we
discussed using this additional $1 billion dollars of your money that
we are putting into schools directly, into school P and C’s; that we
discussed the alternative option of allowing parents to choose to buy
musical instruments for their schools. You might be interested to know
that we’ve got one school that’s applied for four pianos and that will be
funded, if you’re out there, and we’ve got a lot of schools throughout
Australia that have chosen to spend their money, which is your money,
your taxes paid through us, up to 150 thousand dollars, on acquiring
additional or for the first time musical instruments and which will make
a difference to the lives of those young people and the next generation
who go through those schools. Thank you to all of you for having me
here this evening, I know most you had no say and probably wonder
what on earth I’ve turned up for and if you’re wondering what it’s like
in my job I’ll give you an idea as you sit there trying to enjoy yourself.
My wife going to a function about eighteen months ago said “Is this
going to be a good night or are you giving a talk?” So, have a wonderful
seminar, trade exhibition and conference. I shouldn’t go down from here
before I also thank Dickson’s Music in Chatswood in Sydney. Ross and
his daughter Kate have been absolutely outstanding to me. I have a
guy called David Gersh who will be known to a number of you who is
struggling to teach me the guitar and working through the Pink Floyd
and Beatles back catalogue and a few others things, plus I’m naturally
learning a lot of Slim Dusty.
I’m from the government; I’m here to help you. If there’s any more
assistance that I can give you it would be my honour to do so, and
together we can make a real difference to the lives of our children and
therein of our country.
Thank you very much.
IMAGES OF AMAC 2005
11
Market Summary
2005 - A rising tide floats all ships
Since the inception of the Association in 1977 one of its key platforms
has involved supporting music education, as the following extract from
the AMA constitution cites:
‘To actively promote the benefits of a music education for people of
all ages, and to raise community awareness of the international research
in to the benefits of a music education particularly for children’
Music education is critically important to the industry. It is one of the
platforms on which the industry is based. There is little doubt that the
best way to ensure a vibrant music products industry over the long term
is to ensure that the community is musically engaged and enthused about
making music. Ideally, the community would also be musically literate.
While there are numerous ways in which you can learn to play, the best
way to ensure that everyone has the opportunity to become involved in
music is to include music as part of their schooling.
Our sister Associations around the world have also recognised the
importance of music education as a pillar on which their local industries
are built. For two or more decades NAMM has taken a leadership role
in advocating for more music in US schools through the Music Education
National Coalition (MENC). In Britain, the Music Industries Association
(MIA) is a partner in the Blair Government-sponsored Music Manifesto
while MIAC, the Music Industries Association of Canada, is a partner in
the Canadian Coalition for Music Education.
from concert bands to classroom percussion programs, from the solo
piano repertoire through to rock. The diversity of musical experience
within our school programs requires products from most Australian
wholesale companies and engages with many of the nation’s music
retailers.
We can already see the diversity of the music currently offered in
schools through the funding from the Investing In Our Schools program
grant approvals in 2005. In the first round of grants over $4.8 million
was approved for music programs in some 225 schools nationally. More
is to come from schools where the requested grants were larger than
$50,000. The final figure we anticipate for the 2005 Investing in Our
Schools grants is likely to be in excess of $6 million. The list of products
requested by these schools gives an interesting insight into what music
activities are in fact being conducted in Australian schools where a music
education is available. In addition to band and orchestral instruments,
pianos and keyboards, the full range of the types of products supplied
into the Australian market were represented in the requests from schools.
These included: computer music software and peripherals, percussion
equipment, guitars and guitar amplification, professional audio products
and lighting. All products supplied by and through AMA members.
The real issue for the industry is not what is being supplied but to who.
Unfortunately, far too few students receive a meaningful music education
while at school, with the best estimates
currently indicating that only around 1
in 4 Australian students has access to
such a music education. As an industry
this means that we are working with one
hand tied behind our back.
The reason why NAMM, MIA and MIAC, like the AMA,
are engaging in activities involving music education
is the knowledge that music education underpins the
music products business.
Domestically, the AMA has been taking a leadership role in a number
of initiatives that support and develop music education including Music.
Play for Life, the National Review of School Music Education, promoting
the funding opportunities for school music programs through the Federal
Government’s Investing in Our Schools program and of course, the
publishing of the Music in Action magazine to name a few.
The reason why NAMM, MIA and MIAC, like the AMA, are engaging
in activities involving music education is the knowledge that music
education underpins the music products business. While it is not possible
to assess the share of industry turnover that is directly associated with
music in schools with absolute accuracy, it is not unreasonable to suggest
that at least $150 million of the industry’s $500 million plus annual
turnover is associated with music education that takes place either in
schools or in conjunction with school music activities.
There is a view that music in schools is associated almost exclusively
with what might be termed traditional products – brass and wind
instruments, orchestral strings, piano and keyboard, for example. While
many school programs might be grounded in these areas school musicmaking covers the whole range of music possibilities across all genres
12
Importantly, this lack of broad-based
provision also does not reflect the needs
and wants of Australian parents who overwhelming (88%) want their
children to have a musical education as part of their schooling.2 And
why shouldn’t they? Many comparable OECD countries around the world
have given the learning of music a priority that in Australia at this time
simply does not exist. Those countries have mandated music learning
music within their curriculum and have allocated hours of study within the
timetable so that all students have music from the time they enter primary
school to at least the middle years of secondary school. Countries such
as France, Japan, Norway, Sweden, Finland, Hungary, Hong Kong and
Singapore all offer continuous, sequential, developmental music learning
throughout primary school and into the middle years of secondary school.
By comparison no Australian school system does.
Plus parents recognise and value the many benefits of learning
music, both as a subject in its own right and as an activity that assists
the intellectual, social and personal development of their children.3
The community and employment needs are also changing and
through this governments are beginning to recognise the need for music
to be included within their approved curriculum. Music is no longer
a pleasant, nice-to-have add-on to the curriculum ‘if we can afford’
Market Summary
type of subject. Arts education, and in particular music education are
areas where creativity can be developed and nurtured in children, for
in our modern post- industrial societies creativity is and will continue
to become a highly valued resource. The Blair government in the UK
has recognised this through its broad support of arts4 education and
more particularly the Music Manifesto. The Howard Government too,
through the enterprise of Education Minister Nelson and Arts Minister
Kemp seems to be heading in this direction and recognise the value of
music in education and learning.
So the reasons that the AMA has been especially active in the music
education sphere in the last year or two is obvious. With as few as 1
in 4 students having access to a meaningful music education there is
a significant opportunity to develop business opportunities and growth
within the sector. Parents want and expect their children to have the
opportunity to have access to the advantages music learning brings
with it. Governments, industry and others are seeing value in people
learning and participating in music.
The effort spent this year and in the next few years will reinforce
music’s role within education in the 21st Century. A sustained period of
effort over the next 5 to 10 years will bring about the generational change
we need to secure the role of learning music as a fundamental part of
our education system. Such a change will also secure the longer term,
as the 2000 Australia Council report showed that parents with some
experience in the arts (music) were more likely to involve and support
their children in arts activities.5
Five to ten years of hard work by the industry and its partners in the
education sector could see the end of complaints that there are not
enough people interested in playing music.
As they say, a rising tide floats all ships…..and it’s time to be on
board.
Graham Hoskins
Ian Harvey
President
Executive Officer
1 Trends in the Provision of School Music Education Steven et al 2003
2 Australian Attitudes to Music – Australian Music Association 2001
3 Australian Attitudes to Music – Australian Music Association 2001
4 All Our Futures – National Advisory Committee on Creativity & Cultural Education UK 1999
5 Australians and the Arts Australia Council 2000
For the record
The import data for the current financial year suggests
that 2005 has been a solid, rather than outstanding year
for the industry. Unit imports increased by 4%, however,
due to the lower cost of goods imported (a factor that
may have helped increase unit volumes) import value
rose only marginally, up by just 1% in 2005 compared to
the previous year.
Falling average unit values in our industry, and many
other industries supplying consumer goods for that matter,
is something that we have been living with for the past two
or three years. Within our industry the situation stems from
the production capacity of Chinese musical instrument
manufacturing with its lower cost base, a competitive
environment where there is a surplus of available product
and a relatively strong Australian dollar. It‘s not that long
ago that this trend was reversed. In the late 1990’s unit
volumes were falling but, due to our weak currency,
industry value increased. Then consumers were buying
less product for more money, while today consumers
are purchasing more products but paying comparatively
less for them.
While the 1% increase in the industry value in 2005 is
nothing to get excited about, especially in a period where
Gross Domestic Product (GDP) was running at nearly three
times that result, the situation is not that desperate either.
If we were to consider the results for the past two years
(2004/2005) we can see that imports have increased by
nearly 15% and industry value when measured at import
has increased by 10% compared to the 2003 position.
If we were to compare the value result for the 2004 and
2005 period with GDP we would see that our growth is
well ahead of the nation overall.
Unit growth in 2005 was almost universal across the
major categories. Only the Woodwind and Orchestral
String categories recorded fewer unit imports in 2005
than in the previous year. Contrasting those declines
many segments recorded significant uplifts in volume,
such as electronic keyboards, cymbals, electric guitars,
guitar amps, mixers and multi-track products to name
a few. Examples of strong import value increases were
harder to find as a result of the circumstances already
described, however, grand pianos, most percussion
products, and most guitar products recorded strong
increases in import value.
13
Market Summary Chart
Mixers and multi-track
Accessories
Electric Guitars
Upright Pianos
Signal Processors
Acoustic Guitars
Electronic Keyboards
Grand Pianos
Print Music
Speakers
Guitar and Bass Amps
Microphones
Digital Pianos
Amplifiers
Turntables
Education and Other Percussion
Saxophones
Drumkits
Bass Guitars
Guitar Strings
Second Hand Pianos
Traditional and Folk Instruments
Flutes and Piccolos
Cymbals
Orchestral Strings
Trumpets and Trombones
Computer Music Software
Individual Drums
Synthesizers
Clarinets
Other Electronic Instruments
Other Brass Instruments
Other Woodwind
CAMS
Electronic and Institutional Organs
2005
2004
2003
0
14
5
10
15
Import Value A$ Millions
20
25
Economic Overview
While not the booming economy of the recent past,
the 2004/5 financial year still returned solid economic
results for Australia, and continued the run of positive
economic growth to 14 consecutive years.
According to the ANZ Economic Outlook Australian GDP growth
during the past year was estimated to be around 2.6%, compared to a
world result of 5.0%, bolstered by a recovering US economy, a nearly
9% growth in China and a 6%-plus growth from the Asian region.
The simple comparison of Australia’s overall GDP result and that
of the music products industry shows that while our import volumes
recorded a growth in line or a little ahead of GDP (+4%), our industry
value unfortunately did not keep up (+1%).
The ANZ summarises the Australian economy as moving from boom
to boom. Just as the housing boom looked like turning to bust, the next
boom in the mining sector has come along to save the day.
What this means is that the economy has remained relatively strong
as a result of a combination of factors that include:
• The stabilising of the housing market
• Low and decreasing levels of unemployment
• A relatively stable and still historically low interest rate regime
• Strong growth in real gross domestic income and corporate
profits
• Low inflation
Despite these positive elements there has been some disquiet within
the retail sector suggesting that retail activity has ‘come off’. In terms
of major retail (white goods and so on) the falling levels of housing
construction would certainly have had an impact. In our sector the
lack of growth in import value, and presumably sales value, would also
be having an impact. The fact is that consumer spending has slowed
but it is not weak in any absolute sense as credit card use continues
to run at a high level.
Also for the industry the exchange rate has remained fairly stable
- trading between 75 and 78 US cents for the majority of year and
appreciating a little against the Euro, pound and yen.
On the negative side the increase in fuel costs during the past year
seems to have been the major economic issue to cause concern within
the community.
Forecasts, of course, vary from commentator to commentator, but
the general view is that the Australian economy will grow by around more
3.5% in both 2005/6 and 2005/7.
GDP growth – Australian GDP growth has fallen behind many other
OECD countries during the past year. Looking to the future Australia’s
growth is forecast to return to parity levels with the rest of world, at
between 3.5% and 4% during the period 2005-2007.
Continued low inflation – there is some concern that the inflation
levels may break out from the Reserve Bank’s preferred 2-3% range
during the next twelve months. This will largely come as a result of
wages growth caused by the high levels of employment. This is likely
to necessitate an increase in interest rates during 2006.
Exchange rate – the Australian dollar has traded against the US
dollar over a relatively narrow range during the past year reaching highs of
US79 cents at some point during the year. It is likely that the Australian
dollar will fall against the US currency as the US Reserve Bank continues
to increase US domestic interest rates. This results in capital inflows
to the US and outflow from the Australian capital market, resulting in
a lower Australian dollar. The ANZ is forecasting an exchange rate of
around US72 cents over the period 2006/7.
Against the other major currencies the exchange rates are forecast
to be A$ = 82 yen, 60 Euro cents and 41 pence.
Employment – Unemployment levels have gradually eased down in the
past year and are now around the 5% mark. This is considered by many
economists to be the effective level of full employment. Unemployment
is forecast to remain at around 5% for the 2006/7 period.
Interest rates – There appears to be no immediate need to raise
interest rates in the short term. At this stage most commentators do
forecast a modest rate increase but not until well into the second half
of 2006
However, with a strong labour market there is the potential of wage
inflation and the effects of increasing oil prices may yet have some
impact on inflation. To counter these circumstances to contain inflation
to being no greater than 3% the Reserve Bank may use interest rates
as the balancing level. The consequence is that interest rates will likely
exceed 6%.
Political factors - While the Australian political environment is
very steady there are two potential factors that could impact economic
conditions. The first is the new industrial relations laws which aim to make
Australia more productive and prosperous. What change these new laws
will create may not be known for at least the next twelve months as it
will take time for it to have any impact on work practices or structures.
The second factor is the budget surplus, likely to be in the $12 to $15
billion range in 2005/6 and whether the government will seek to reduce
this through tax cuts, which has the potential of fueling inflation through
higher levels of consumer spending, paying down government debt, or
investing in infrastructure developments.
While nothing about economics is ever certain the outlook for the
coming twelve to eighteen months remains positive, with both the local
and international economies strengthening. Australia will again have solid
GDP growth, employment levels will continue to remain high, and interest
rates while likely to increase will remain modest when viewed over the
long term. For importers exchange rates will remain relatively stable.
15
Understanding the data
The musical instrument data in this report is
sourced, unless stated otherwise, from the
Australian Bureau of Statistics and is based on
Glossary of terms used:
ABS
Australian Bureau of Statistics
AUV
Average Unit Value, measured as import
value divided by the number of units
imported and uplifted by 2.5 to convert to
an estimated average retail sales value.
Category
A category is an overall grouping of
segments. For example Keyboards is
the category, whilst Upright Piano is a
segment.
Country of Origin
The Customs Service data records the
country of origin of imports. This data
has been referred to in the commentary
accompanying the graphs.
Current Year
The period of the 2005 financial year
beginning July 1st 2004 and ending June
30th 2005.
Five year trend Shows the variation in percentage terms
between the 2005 result and the 2000
result for each segment and category in
value terms and, where applicable, in unit
terms.
Import value
The value in Australian dollars as declared
to Customs for sales tax and duty
valuations of products imported. Note
this is based on the wholesalers’ buy
prices from the manufacturers.
the duty information provided to the Australian
Customs Service by the industry’s wholesalers
and importers.
There are some key points that need to be made in order to clearly
understand how these figures and conclusions were reached:
Data only includes imports of musical instruments that have
been declared to Customs. It, therefore, does not include product
manufactured within Australia (predominantly guitars) or privately
imported (and undeclared) instruments.
In some cases data has been artificially ‘cleaned’ to remove misallocated items, which may have been genuine musical instruments
declared under the wrong coding or children’s toys, that while
resembling musical instruments are in fact not musical instruments.
In order to ensure that this cleaning produced a reliable result, data
was cross-referenced against country of origin and average unit
value to assess accuracy. For example: trumpets from India with an
average unit value of under $5 were removed from their segment.
Years quoted are financial years, so ‘2005’ refers to the financial
year 2004/2005 (ending 30th June 2005).
Because the data refers to imports not sales, units recorded in
a particular year may not have been sold in that year.
References to the US and other markets such as the UK or
Canada are based on data published by NAMM - the International
Music Products Association through their annual Music USA report,
collected by Music Trades magazine.
16
Last year/Previous year The period of the 2004 financial year
beginning July 1st 2003 and ending June
30th 2004.
MIA
Music Industries Association . The British
equivalent of the AMA.
MIAC
Music Industries Association of Canada.
The Canadian equivalent of the AMA.
NAMM
NAMM The International Music Products
Association. The US equivalent of the
AMA.
Retail value
A nominal uplift of 2.5 was applied to
the import values to create an artificial
retail value which is intended to represent
indicative sales values and retained
margins when the product is sold to a
consumer.
Segment
A segment is one instrument type or subgroup within a category. For example:
Upright Piano is the segment, whilst
Keyboards is the category.
TFCE
Total Final Consumption Expenditure
-the total domestic expenditure by
Governments, private companies and
individuals.
TWI
Trade weighted index - a parcel of key
foreign currencies including the US dollar,
Japanese Yen, British Pound Sterling and
European Euro. These are consolidated
and weighted against the Australian dollar
for comparative purposes.
Keyboards
The keyboard category comprises six segments, sub-divided
into two groups:
Piano products: (new upright pianos and grand pianos,
secondhand pianos - both upright and grand, and digital pianos.
The 2005 financial year result saw piano products contributing
nearly 17% of unit imports (16,000 units) and 75% ($37million) of
the category’s value.
Keyboard products: (electronic keyboards (portable keyboards)
and organs). Keyboard products accounted for around 83% (81,000
units) of the segment’s imports and 25% ($12 million) of the import
value.
The keyboard category continued to maintain a share of around
22% of the total industry when measured by value and maintain its
position as the second largest category in value terms, placing it
behind professional audio but ahead of guitar products.
The 2005 keyboard category unit imports surged, just as they did in
2004, recording a 23% increase in volume compared to the previous
year. This increase was on the back of a 27% uplift in electronic
keyboard volumes. Import value failed to mirror the growth in unit
imports falling marginally (-1%) to record a result a little below $49
million.
Over 16,000 units were imported across all the piano segments,
including new grand, upright and digital pianos, further improving
on the results from the previous two years. In particular, the growth
of acoustic instruments drove volumes higher just as they did in
2004. The current strong economic conditions would appear to be
supporting greater numbers of piano sales, as the relative health of
the piano market can be tracked against the relative health of the
economy overall.
The real boom in this category came as a result of electronic
keyboard imports. For a mature product the 27% increase in import
volume was extraordinary. Electronic keyboard imports rose by around
17,000 in 2005, most of them imported in the September and December
quarters while on the other hand the imports of organs barely broke
the three figure mark with just 135 instruments making their way into
Australia in 2005.
Unfortunately, the growth in the value of keyboard imports was
unable to match the growth in units during 2005. In fact the value of
imports in the category overall slipped by 1% in 2005 compared to
the same period the previous year. This is a common theme evident
in many categories over the past year or two.
The combination of these factors resulted in average unit values
easing by a little more than 2%, only the organ segment showed any
increase in average unit values, though with such small volumes the
14% increase in average unit values in that segment had no effect
on the category overall.
Some of the circumstances impacting on the 2005 keyboard
category result were very much in common with the trends evident
elsewhere in the market and were largely a continuation of trends
evident in our market for the past two or more years:
• Declining average unit values in all key segments.
• Continued increases in the share of imports earned by Chinese
and Indonesian products across the category as a whole.
• The strong economy, with high levels of employment and low
interest rates making purchasing easier for consumers.
• The continued growth of the electronic keyboard segment
• The continued decline of the organ segment
• Continued demand for high value acoustic piano products
Based on the data available from NAMM and Music Trades the
Australian market seems to have again fared well when compared to
the US, especially in terms of acoustic piano products. Despite the
growth in US housing starts, improved employment and lower priced
piano products US piano sales remained essentially flat.
The strong performance of digital pianos continued in the US, with
a further 15% increase in volume, lifting the increase in volume to over
40% since 2003. Accompanying the increase in digital piano volumes
was a 22% uplift in sales of electronic keyboards. This increase means
that Americans purchased an amazing 250,000 additional electronic
keyboards in the last year compared to the year prior, and that on top of
the 2003 result where the sales of electronic keyboards also increased
by 9% over the 2002/3 period.
When comparing the US and Australian markets on a pro-rata basis
the two are found to be remarkably similar in terms of unit sales, the 2004
US sales being marginally above (+1%) that of Australia. When measured
by value the variance between the two countries increases in favour of the
US market. The average value of US purchases are around 14% above
that of Australia, substantially as a result of the higher number of high value
products sold in the US market such as grand pianos and organs.
17
Keyboards
Upright Pianos
The long held rule that a strong economy equals strong piano sales continued in 2005.
New upright piano imports increased by 7% from 5,973 units in 2004 to 6,417 in the current year. Import
value, however, declined (a trend evident in many segments in 2005), by a little over 1% falling to around
$14.8 million from over $15 million the previous year. Import volumes were running well in advance of the
2004 result for the first half of the current year but slowed, especially in the final quarter, which suggests that
supply might running a little ahead of demand.
The average value of new upright pianos declined by 8% compared to the previous year.
The decline in average unit value for the segment overall can be largely attributed to an increase in the
volume of Chinese imports, up by 9%, and an 8% decline in Japanese imports. Together imports from these
two sources account for over two-thirds of new piano arrivals so any major shifts in any of the key fundamentals
of price or volume affect the segment overall. In addition to an increased volume of imports, Chinese upright
pianos recorded a drop in average unit values further impacting on the overall value of the segment.
Further adding to the reduction in average unit values was the increase in import volume of Indonesian
made instruments. In 2005, imports of Indonesian pianos rose by 39% compared to the previous year. In
terms of price these instruments bisect the Chinese and Japanese instruments and represent the third major
source of supply to the Australian market, leaving only a small number of Korean imports along with relatively
small numbers of US, British, German and European imports to make up the balance.
When analysed by volume the greatest gains were made by Indonesian and Chinese imports up by a
combined 450 units over the previous year. Korean imports remained relatively stable, while German imports
recorded a very strong 30% increase in the current year, though once again the average unit value of these
German imports was below that recorded in the previous year.
With 41% of import volume and 53% of value, Japan continues to be the leading source of products for
Australian consumption, a trend that dates back some three or more decades. In addition to imports from
Japan, China, Indonesia, Korea and Germany, imports were also recorded from the Czech Republic, Malaysia,
France, the United States, Britain along with two shipments from Macau, totaling 60 units.
In the US the Music Trades data shows a significant (-12%) drop off in upright pianos sales – going against
the trend locally. Offsetting this somewhat, however, is the continued growth of player pianos, which grew
by 22% in the US, but which few, if any, are sold in this country.
2005 at a glance
Units
+7%
Value
-1%
AUV
-8%
Value
+74%
AUV
-12%
Segment leader by volume Japan 41%
Segment leader by value Japan 53%
Five year trend
Units
+97%
Grand Pianos
The trends evident in upright piano imports were generally also evident in the grand piano segment. Unit
imports increased over the 2004 result by 9%, while import value rose by 8% compared to the previous year.
In all 1,085 grand pianos were imported with an import value of a little over $11 million.
Average unit values declined just as they did for upright pianos, however, the decline in this case was
much more modest, with average value just 1% below that of the 2004 result.
As was the case in 2004, imports in the upper price ranges have continued to perform well, typically these
products are sourced primarily from Germany, but also from the United States, Austria, the Czech Republic
and Italy. Additionally, Japanese imports increased their average unit value compared to the previous year
by around 10%, which suggests a shift in the model mix from that source, which in turn might be linked to
the increased numbers of Indonesian imports.
Like upright pianos, Japanese instruments continue to hold market leadership with a 48% share of unit
imports and a 53% share of segment value. These results see Japanese instruments maintaining a comfortable,
though declining gap over imports from Indonesia and China. By comparison just 12 months earlier Japanese
imports claimed 56% of unit imports and 55% of import value.
While Chinese product imports grew modestly in 2005, Indonesian imports more than doubled, overtaking Chinese
imports for second place behind the Japanese product and accounting for 22% of the total import volume.
The premier European products continued their overall strong performance with import volumes from
Germany, Italy, Austria and the Czech Republic up a combined 79% compared to the 2004 result. German
products continue to be especially strong with a 69% increase in imports in 2005. The increased volume did
however see a drop in the average unit value of German instruments overall.
Also like upright pianos, the volume of imports showed signs of slowing in the last quarter of 2004 after
a frenetic start to the year.
US data presented by Music Trades show that grand piano volume grew by 3% , though value fell as in
Australia by a little over 1%.
2005 at a glance
Units
+9%
Value
+8%
AUV
-1%
Value +102%
AUV
+14%
Five year trend
18
Units
+78%
Keyboards
Secondhand Pianos
This segment continues to be an important element within the total piano market as it provides a price
benchmark against which all other piano products, including digital pianos, can be measured.
The 2005 financial year result showed that 1,833 secondhand pianos were imported at a value of around
$3.3 million. This represents a 5% increase in unit volume but a 4% decrease in import value compared to
the previous year.
These secondhand pianos hold a significant position in the market despite their relatively low numbers,
1,833 compared to 6,417 upright pianos and 6,754 digital pianos. In unit terms these second-hand imports
exceed both Chinese and Indonesian new piano imports. While falling short of Japanese new imports these
products set the benchmark prices against which many other piano products are measured. They challenge
the prices of new Chinese and Indonesian imports, offering Japanese brand names and the perceived quality
that comes with those names in larger sized instruments.
The initial rush into the market by retailers and the subsequent easing back from that peak have seen the
segment hovering below the 2,000 unit mark since 2003. The segment now seems to move in relation to
that of new pianos rather than in contrast to it.
Much of this can be attributed to now well-established public perceptions about the value and performance
of these secondhand imports. In fact some of these instruments are being sold to customers who are uniquely
attracted to the combination of price and performance. Advanced piano students for instance who cannot
afford a new Japanese 131cm upright piano but require more performance than a Chinese product is able
to offer for the price.
Initially, secondhand imports undercut the prevailing dominance of Japanese made instruments, however,
these secondhand products are now faced with their own competition by way of low cost Chinese and other
imports, as well as digital piano products.
The current strong economy is also more likely to favour new products than when secondhand pianos
reached their peak in the late 1990’s.
This year Music Trades have noted that secondhand imports into the US declined significantly (-14%),
while overall piano sales remained essentially ‘flat’ during the past two years. Secondhand imports in the US
claim around 8% of the total acoustic piano market compared to around 19% of the market locally.
2005 at a glance
Units
+5%
Value
-4%
AUV
-9%
Five year trend
Units
-9%
Value
-8%
AUV
+9%
Digital Pianos
The upward trend of the digital piano segment which as been evident since the mid 1990’s continued again
in the current financial year. While the nearly 2% growth in unit imports in 2005 was modest by comparison to
some years in the past decade, the segment was still able to make some gains, increasing unit imports to over
6,750 units, meaning that around 100 additional units were imported in 2005 over the previous year. Import
value, however, was little changed with the total value of imports remaining a little above $7.4 million.
The relative strength of the segment is evident in its share of the total piano market. According to the
Music Trades data, digital pianos out sold acoustic products in the United States for the first time in 2003.
In 2004 the digital piano market surged by 43%, while pianos fell by 4%, reaffirming the dominance of the
digital, rather than acoustic piano in that market. In Australia, we still have some way to go before the product
balance tips in favour of the digital piano, though the digital pianos now represent nearly half of all new piano
products sold domestically.
Japanese imports lost their market leadership position in 2005 to imports from Indonesia, reversing
last year’s results. This came as a result of Japanese imports falling by around 500 units while Indonesian
imports rose by nearly 600 units to over 3,200 in total. Indonesian imports were able to claim 48% of the
import volume and 47% of the value. The other source of product on the rise was, not surprisingly, from
China. Nearly 1,000 Chinese imports are included in this year’s result, up from around 250 the previous year.
Contrasting the increases from Indonesia and China were reduced imports from Japan (-22%), Italy (-46%),
Korea (-68%) and Malaysia where the flow of product from this source all but ceased.
Average unit values dipped by a little more than 1% in 2005 compared to 2004. Japanese and Italian
imports rose in average value terms, while the average value of Indonesian imports declined by 11%.
Offsetting the drop in the average unit value of Indonesian products was an increase in the average value of
Chinese goods. Compared to the previous year the average value of Chinese imports rose by more than
12%, suggesting that not only are more products being produced in China but that these imports represent
a broader range of price points, climbing above the retail price of $2250 for the first time.
2005 at a glance
Units
+2%
Value
+0.8%
AUV
-1%
+19%
AUV
-8%
Segment leader by volume Indonesia 48%
Segment leader by value Indonesia 47%
Five year trend
Units
+30%
Value
19
Keyboards
Electronic and Institutional Organs
The market for organs is now so small in number that those involved in the sector are likely to know virtually
every instrument imported in the past 12 months. A total of 135 instruments were recorded, down (-37%)
from 215 for the same period the previous year. This represents the kind of decline experienced for much of
the past two decades or more, where the market was once significantly above 10,000 units. Import value also
fell, down 28% to a little more than $700,000 at import.
Japanese products regained their position as the largest product source claiming 31% of the unit volume,
and displacing last year’s leader, Italy, to second place with 24%. The loss of unit volume is evident across
the segment, though Japanese products proved to be the most resilient in 2005.
Products from the US claimed the largest share of import value with a 42% share, a result of their higher
average unit values.
Average unit values increased in 2005 compared to the previous year. The increase was most evident in
imports from the US and Italy. The importation of two German products, with an average import value of over
$15,000 each further added to the uplift in segment average values. The average value of imports from both
Japan and the Netherlands eased in the current year.
Once again the segment has lacked imports of large-scale concert instruments for use in concert or town
halls. The last evidence of this style of instrument being imported occurred in 2001. The lack of such instruments,
while having next to no impact on the import volume, reduces the value of the segment considerably.
Music Trades reports that the unit volume for this segment in the US declined only marginally during the
past year, a far cry from the domestic situation. The relative strength of the market in the US (five times that of
Australia in per capita terms) is one of the key areas of difference between the two markets.
2005 at a glance
Units
-37%
Value
-28%
AUV
+15%
Value
-78%
AUV
-3%
Segment leader by value USA 42%
Five year trend
Units
-79%
Electronic Keyboards
The electronic keyboard result at first appears to be unbelievable with a 27% surge in volume in 2005, in
what is a mature segment and following what appeared to be a very strong result in 2004.
However, the growth in electronic keyboard products was not confined to Australia. The most recent US
results published in Music Trades shows a 22% growth for the 2004 calendar year, with a 50% increase in the
sales of products in the above US$199 price point.
The current financial year saw over 80,000 electronic keyboards imported, up from the 63,000 imported in
2004. By the end of the December quarter already more than 55,000 units had been imported, the equivalent of
87% of the entire 2004 imports. Needless to say imports slowed significantly in the second half of the year.
While unit volumes showed significant growth, the reverse was true of the segment’s value which slipped
by 6% to record a total value at import of around $11.3 million. It would seem that many of the additional
units imported in the current year are not from the major brands, nor sold through the music products channel.
Much of these additional imports it seems have been sold via the mass market. For instance the supermarket
group Aldi have featured non brand name keyboards in their catalogues throughout the past year. They are
one of a number of such groups retailing keyboard products in the past year or so.
These results mean that average unit value decreased in 2005 by around 27% falling from around $475
when uplifted to retail to around $350 per unit.
Chinese sourced product continues to dominate this segment claiming 89% (72,000 units) of the unit
imports and 76% of the segment value in 2005, representing further significant increases on both measures
during the past year. China’s share of segment value in particular is increasing rapidly, moving from 54% of
the segment total in 2003 to 76% of the total value in the last 12 months.
Hong Kong, Japan and Italy accounted for the majority of the remaining imports, with Hong Kong and
Japan each taking a 3% share of unit volume and Italy a 2% share. When measured by value Japan was the
second largest source of supply after China with 10% of the total segment value.
The five year trend data below is skewed by the very strong 2005 result with its high unit volumes and low
2005 at a glance
Units
+27%
Value
-6%
AUV
-26%
Value
+39%
AUV
-14%
Segment leader by volume China 87%
Segment leader by value China 76%
Five year trend
20
Units
+71%
Brass
The brass category comprises two segments:
Trumpets, Cornets and Trombones: accounting for 83% of the
unit volume and 59% of the category value during the 2005 year.
Background and Other Brass: comprises euphoniums, tubas
and other background brass together with French horns.
Imports into this category rose by around 500 units in 2005 when
compared to the previous year’s result. Overall, imports rose by 7%,
which follows a very strong 35% increase in the previous year. Despite
the increase in unit imports, import value failed to make any headway
and remained virtually static at a little less than $4.8 million.
Falling average unit values was the direct cause of this situation.
On average values declined by around 7% in 2005 compared to the
result recorded in the previous year.
Chinese imports, which had been threatening to take control of the
category for the past couple of years broke through in 2005 claiming
the leadership position in terms of unit imports in both the Trumpet and
Background Brass segments. In 2003, Chinese trumpets, trombones
and cornets accounted for just 7% of the unit volume, however, this
share had increased to 33%, displacing imports from Taiwan, the
United States and Japan along the way. This coupled with an increase
in Chinese imports in the Background Brass segment means that
China now holds the largest share of imports for the Brass category
with 32% of all products imported. Japanese, US and Taiwanese
instruments make up the bulk of the remaining imports.
When measured by value it is a different story. With an average
value of only 25% of the category overall, Chinese imports can
claim only a modest 11% share of the total import value. Here it is
US imports, especially US made trumpets and trombones that hold
the largest share of category value with 27%, followed by Japanese
imports with a 25% share.
Imports of professional, high value products from Japan, the US,
UK and Europe continue to account for around 10% of the total
volume.
The strength of this category is somewhat surprising as it has had
a history of a strong result such as that of 1998 or 2001 followed by
much poorer results for the next year or sometimes two. The long
term average imports for the category has to date been around
6,000 per annum, yet the past two years the import volume has
averaged around 8,000 units. Obviously something has happened,
the question is what.
Unfortunately the answers are not all that evident. There is no one
clear reason why the numbers have increased so much. The reasons
that may have impacted upon the category include the availability of
low cost instruments, the strong economy, and increased student
numbers within the private school system, which generally has a
stronger commitment to music programs and band programs in
particular. While there is no evidence of this in the quarterly import
figures, it may of course be that there is a lot of stock sitting in
warehouses and in retail stores currently waiting for good homes.
Only time will tell.
It is interesting that in the US according to Music Trades, annual
sales of brass instruments have returned to growth in 2004 (+7.5%)
after several years of declining volume, at exactly the same time we
are experiencing growth in Australia. Also like the Australian market
the US is also feeling the effects of lower unit prices, though in the
US the decline in value is now in its fifth consecutive year.
One very significant difference between Australia and the US is the
volume of brass instruments. US consumption of brass products is
around twice that of Australia when viewed on a pro rata basis.
21
21
Brass
Trumpets, Cornets and Trombones
The surge in imports in the trumpet, trombone and cornet imports during 2004 was extended on marginally
with a 2% increase in unit imports during the 2005 financial year. Overall, more than 6,900 trumpets, trombones
and cornets were imported.
While volumes increased, albeit marginally, import value fell, down by 6% compared to the previous year.
Chinese imports, which largely caused the increase in 2004 volumes, continued to grow in number during
2005. The 1,200 plus units of Chinese trumpets and trombones recorded in 2004 extended further to more
than 2,300 units in the current year. This resulted in Chinese imports making the largest contribution to
the segment with a 33% share of all imports. Of the three more traditional major sources of supply (Japan,
Taiwan and the USA) only US products recorded some growth. Though the actual increase in unit numbers
was very small, US products controlled the second largest share of imports with 26%. The import volumes
form both Japan and Taiwan fell – down by 31% and 3% respectively.
When measured by value, US imports claimed the largest share of the segment with 39%. Japan with
27% and China with 11% are the next largest contributors.
Despite an increase in the average unit value of Chinese imports, the larger number of Chinese products,
along with fewer Japanese imports resulted in the segment’s average unit value falling by 7% compared to
the 2004 result. Adding to this was a reduction in the average value of both US and Taiwanese imports.
The effect of Chinese imports on average values is very evident when we consider that Chinese products
are valued at little more than one-third of the segment’s average overall. Put simply, four Chinese trumpet/
trombones/cornets equal the average of one instrument from all the other sources combined.
High value imports from countries such as Germany, the United Kingdom and Switzerland dropped by
around 11% when measured by units in 2005 compared to the previous year. Typically products from these
sources have average unit values around five times that of the segment overall. Therefore the decline in
units of these professional standard instruments helped cause the decline in the segment’s overall average
unit value.
2005 at a glance
Units
+2%
Value
-6%
AUV
-7%
Value
+7%
AUV
-21%
Five year trend
Units
+35%
Other Brass
This segment comprises background brass instruments such as euphoniums and tubas - principally used
in concert and brass bands - as well as French horns, which are also used as orchestral instruments.
Unlike the marginal growth in the trumpet, cornet and trombone segment, unit imports growth in
background brass segment increased by a significant 43%. Overall 1,425 units were imported in the 2005
financial year.
Accompanying the increase in volume was a 9% increase in the value of imports, with the total import
value now approaching $2 million. The consequence of vastly increased unit volumes and a comparatively
modest uplift in segment value resulted in a decline in average unit values. Overall, the average value of items
imported into this segment declined by 24% in 2005 compared to the result recorded in the previous financial
year. Because of the broad nature of product captured in this segment these kinds of wide fluctuations do
happen from time to time.
Not surprisingly the drop in average unit values had a lot to do with Chinese products, in this case a four
fold increase in the number of Chinese instruments imported into the segment at an average price of around
one fifth of the segment’s overall average value.
However, the story is not one of mere substitution. While Chinese imports grew, so did the combination
of high value imports from Germany, the United Kingdom, United States and Switzerland. Imports from
both Japan and Taiwan also increased in number in 2005. With the exception of German imports, the
average unit values from each of these sources all eased during the current year, possibly as a result of the
stronger Australian dollar.
Chinese imports accounted for the largest share of units with a 28% share, relegating Japanese imports
to second position with a 23% share. When measured by value, imports from Germany accounted for the
largest slice of the segment with a 27% share. Again Japanese imports held second place with a 25%
share of segment value.
The five year trend shows a marked increase in the segment’s performance, however, as the 2000 result
reflects what were recent historic lows for the segment the trend is some what skewed on the high side.
2005 at a glance
Units
+43%
Value
+9%
AUV
-24%
Value
+92%
AUV
-4%
Segment leader by value Germany 27%
Five year trend
22
Units +102%
Woodwind
The Woodwind Instrument category is divided into four
segments:
Flutes and Piccolos: Representing 4% of the unit imports and
27% of the import value for the category overall, flutes represent the
largest single product of the major orchestral instruments.
Clarinets: Representing 2% of the unit imports and 23% of the
import value of the category overall.
Saxophones: Representing just less than 2% of the unit imports
and 34% of the segment value. This is the largest contributor in value
terms to the Woodwind category.
Education and Other Woodwind: Includes a small number of
major orchestral products such as oboes, cor anglais and bassoons,
and large numbers of recorders and ethnic woodwind instruments.
These ethnic products can include bagpipes, panpipes, fifes and
other such instruments. The segment represents around 90% of the
category overall in unit terms but just 15% in value terms.
Imports of woodwind products declined in the 2005 financial year,
losing 6% of its volume or around 16,000 units compared to the
previous year’s result. While the loss of volume in is largely attributed
to the educational and other woodwind segment all segments with
the exception of saxophones (+1%) recorded lower numbers of unit
imports.
The decreased volume was unfortunately accompanied by a 13%
decline in the value of the category overall. The underlying reason for
the comparative large drop in value was a quite significant reduction
in average unit values. The downward movement of average unit
values was especially evident in the flute, clarinet and Educational
and Other Woodwind segments.
The fall in average unit values was rather spectacular due to the
influence of the Educational and Other Woodwind segment. The
50% drop in average unit value in that segment resulted in decline
for the category overall of 35%. However, when the key segments
of flutes, clarinets and saxophones are isolated from the Educational
and Other Woodwind segment the story is rather different, as the
average unit value for these products combined in 2005 is just 2%
below that of 2004.
While the decline in average unit values for clarinets, flutes and
saxophones in 2005 is modest it is the fourth consecutive year where
such declines have been evident. During this time the average unit
value for these three segments within the Woodwind category have
declined by a little over 12%. While there is no single reason why
prices have fallen as they have, the most significant factor without
doubt has been the advent of ‘playable quality’ instruments from
China principally as well as Indonesia and to a much lesser extent
Vietnam and India. The move to a quality product being sourced
from these countries is a relatively new occurrence. Guitar and
electronic products supplied into Australia have for instance, had
a much longer history of manufacture in China than do brass and
woodwind instruments.
Until the last year or two unit imports in each of the flute,
clarinet and saxophones segments were dominated by Japanese
manufactured instruments. This year Japanese products maintained
their leadership within the saxophone segment but lost its leadership
in flutes to Taiwan and clarinets to China. In each case products from
Indonesia were also strongly represented. These shifts to places that
offer a lower cost of production is the prime reason for the declining
Adding to what is being termed in the US as the ‘China factor’
(though you could also add Indonesia as far as brass and woodwind
products are concerned) is the comparatively strong Australian dollar,
which combined, have had the effect of lowering prices. Looking
forward the current pricing may represent the bottom of this cycle and
prices may actually start to increase again as a result of the current
surge in oil prices and its effect on manufacturing process and the
shipment of goods.
According to Music Trades woodwind products recorded a 7%
increase in volume and a 2% decline in value in 2004. Broadly
speaking this is a very similar situation to our experience in the past
12 months here in Australia.
Unlike brass instruments, our domestic consumption of
woodwind products is more line with the US results when viewed
on a pro rata basis. Our consumption of flutes is within10% of
the pro rata US result based on their reported 2004 sales, though
the fact that we sell more flutes than clarinets is interesting, as the
clarinet represents numerically the largest instrument type in school
bands. Our saxophone consumption is within 15% of the pro rata
US figure; however our clarinet volumes are only around 60% of the
US result.
The 2005 Music USA report goes on to give us some insights into
the relative performance of our domestic sales and that of some other
countries. In the case of woodwind instruments the Canadian data
seems to be the most relevant. Canadian consumption of woodwind
instruments appears to be about 25% ahead of that of Australia when
analysed on a pro rata basis.
23
23
Woodwind
Flutes
The flute segment had shown itself to be the most consistent performer of the orchestral instrument
segments for much of the last decade, with unit volumes edging up year-upon-year since 2000. The 2005
result sees a decline in unit imports with an 12% decrease in import volumes, meaning that around 1,100
fewer flutes were imported in 2005 than in the previous year. Accompanying the decline in unit volumes was
a 22% drop in the value of imports into the segment. The reduction in segment value is a common theme
to all the woodwind segments in 2005.
The decline of 11% in the average unit value, coupled with the lower numbers of instruments imported is
the cause of the drop in segment value. In the past four years the average unit values have hovered a little
above the $1,000 mark when uplifted to retail. In 2005 this figure has fallen below the $900 price point.
Taiwanese imports captured the largest share of the segment in unit terms with 27% of all units entering
Australia, displacing Japanese products along the way into second place with a 23% share. The volume of
imports from both these sources declined in 2005. Imports from the United States also declined. Apart from
the loss of volume from these traditional sources of supply, the most significant action to take place within
the segment was the emergence of Indonesian instruments during 2005. Indonesian made instruments
claimed 11% of the segment volume and 9% of the value in the current year. Chinese imports were also
more numerous in 2005 than in previous years. It is primarily the emergence of the lower priced Indonesian
products together with an increase in the volume of Chinese instruments, coupled with falling volumes from
the US and Japan in particular that led to the fall in average unit values.
Japanese product continued to hold the largest share of import value with 34%.
Australian flute volumes compare reasonably favourably with that of the US. Music Trades indicates that in
2004 US flute sales totaled around 154,000 units. When converted to a pro rata basis (based on population)
the result would be sales of around 10,000 units domestically in Australia, meaning that the current average
imports over the past three years of around 9.300 unit per annum is not far from the US benchmark.
2005 at a glance
Units
-12%
Value
-22%
AUV
-12%
Value
+15%
AUV
0%
Segment leader by volume Taiwan 27%
Five year trend
Units
+15%
Clarinets
The clarinet segment was another of the band and orchestral segments to go backwards in 2005. Imports
fell by 15%, falling well below the 6,000 unit mark after five comparatively strong years.
The familiar story of import values falling faster than the movement in unit imports is not as evident in the
clarinet segment as it is in many others. True, the value of imports declined in the current year, down by
11% compared to the previous year, however, this was less than the fall in unit import volumes meaning that
average unit values went against the general trend and actually rose by 4% over the 2004 result. In 2005
the average clarinet cost around $1,200 when uplifted to a retail price.
Imports from China, the United States and Taiwan all increased in 2005 compared to their results for
2004. Chinese products accounted for 28% of all clarinet imports taking the largest share of the segment.
Indonesian and German sourced products also made significant contributions to the 2005 import volume
with shares of 23% and 22% respectively. When measured by value, French imports claimed the largest
share with 34% of the segment total value.
As noted above, imports from China, the United States and Taiwan all rose. All other major sources of
imports such as France, Japan, Germany and Indonesia recorded declining volumes in 2005 compared to
2004. In unit terms the fall in Indonesian imports, with around 500 fewer units imported from that source,
had the most effect on the segment overall.
French instruments continue to dominate the professional end of the market, and as a result control the
largest share of the segment’s value (34%) while accounting for just 8% of the total imports. These French
instruments are also supported by relatively small numbers of high value, professional quality instruments
from Japan, Germany and the United States. Typically professional products account for about 10% of the
total number of instruments imported in a year.
2005 at a glance
Units
-15%
Value
-11%
AUV
+4%
Value
+5%
AUV
+19%
Segment leader by value France 34%
Five year trend
24
Units
-7%
Woodwind
Saxophones
As expected, given the deflationary environment in which the music products sector is working
internationally, the value of the segment fell, the modest increase in unit volumes failing to offset the 2%
decline in average unit values. The result in value terms has 2005 recording a decline of 1% in 2005
compared to the previous year.
Units
6000
Units
+1%
Value
-1%
AUV
-2%
Value
+22%
AUV
-7%
5
4398
4000
4236
4
3626
$3.95
3589
$3.84
$3.91
3000
$3.43
$3.19
2000
3
$3.00
$2.77
1000
0
1998 1999 2000 2001 2002 2003 2004 2005
$11.98
12
10
$9.60
$2267
$ Retail Value Millions
$8.57
$7.97
8
$6.93
6
2
Saxophone Units
Saxophone Import value
2500
$9.88 $9.78
$2187
$2182
$7.51
2000
$1912
4
$1812
$ Average Retail Unit Value
2005 at a glance
5942
5000
The mix of products from the various sources from around the world changed significantly during the year.
Taiwanese imports dropped dramatically, handing market leadership back to Japanese imports which had
controlled the segment for several years. Japanese produced instruments claimed a 29% share of all the
instruments imported into Australia during 2005. Japanese products also accounted for the largest share
of the value of the segment claiming a 42% share. Chinese imports rose, but only marginally in number, as
did imports from France, the United Kingdom and the United States. However, it was Indonesian sourced
product that really offset the loss of volume from Taiwan, and with nearly 800 units imported Indonesian
instruments were able to claim 13% of all import during the current year.
The decrease in average unit values in this segment, which is similar to the trend for the industry more
generally in 2005, comes largely from the prices of Japanese, US and Chinese product prices easing in
during the past 12 months. This may be a result of a shift in the product mix, more alto saxophones for
example compared to tenor and other saxophone types, or come as a result of a stronger Australian dollar,
especially against the Japanese Yen in recent months. Offsetting the reduction in the value of products
from these sources to some extent is the average price of Indonesian products which are on average more
expensive in 2005 than the Taiwanese instruments they replaced were in 2004.
5869
5493
$4.79
5509
$ Value Millions
Imports of saxophone products edged a little higher in 2005 with 1% increase in total unit volume. In
many respects this is a good outcome as it builds on the 2004 result, which saw a 7% increase in unit
volumes. Certainly the past three years have seen much healthier results than those of the period from
1999 to 2002 where annual imports averaged just less than 4,000 per annum during that period. The
average unit imports in the three years since 2003 has been nearly 5,800 per annum, a more than a 40%
improvement over period from 1999 to 2002.
$1752
2
$1648
$1556
0
1998 1999 2000 2001 2002 2003 2004 2005
1500
Saxophones Retail value
Saxophones Average Unit Value
Five year trend
Units
+35%
Other Woodwind products
This segment is a catch-all for products such as oboes, cor anglais and bassoons, and ethnic instruments
such as fifes, bagpipes and panpipes. The majority of units, however, are recorders which account for
the high unit volume and low import value that typify the segment.
After an especially strong 2004 result (in the context of other results in the past five or so years) the
segment went into reverse in 2005 with imports falling by 6% in 2005 compared to the previous year.
In all, 211,000 units were imported. Though obviously below the 2004 result, these figures still show a
significant advance on the results which were being recorded in the period between 2001 and 2003, as
the accompanying graph shows.
Accompanying the fall in unit volume was a drop in the value of the segment. Of course, as is the case
in many other segments this year, a reduction in the average unit value of the items imported (in this case
by 15% ) has added to the loss of segment value. The end result was that the segment saw a decline
of around 21% with the value of the segment falling from around $2.2 million at import in 2004 to a little
more than $1.7 million in 2005.
The large fluctuations evident in this segment in 2005 are not uncommon in segments where a large
variety of instruments are captured as a single group. For instance an uplift or decline in the number of
bassoons or oboes in a given year can significantly affect the average value of the segment overall. The
figures in 2005 would suggest that there is a comparative lack of high value products, such as bassoons,
contained with these results, therefore significantly reducing the average value of the segment overall.
Indonesian imports continue to dominate in unit volume terms accounting for 41% of the total unit
imports and 15% of the total value. Other leading sources of supply are China (25%) and Japan (10%).
German instruments hold the largest share by value with a 25% share, while other leading suppliers by
value are Indonesia, the United States and China with shares of 15%, 11% and 10% respectively.
2005 at a glance
Units
-6%
Value
-21%
AUV
-53%
+24%
AUV
+30%
Segment leader by volume Indonesia 41%
Segment leader by value German 25%
Five year trend
Units
-5%
Value
25
Drums & Percussion
The Drum and Percussion category is divided into four
segments:
Drum Kits: sets of drums containing five or more components
Individual Drums: includes contemporary, ethnic, marching and
orchestral drums
Cymbals: including products ranging from finger to orchestral
cymbals
Educational and Other Percussion: consisting mostly of
drumsticks, heads and hardware, but also including Latin and ethnic
percussion, and tuned percussion items for orchestral or educational
use. This segment dominates the category in unit import terms
accounting for nearly 90% of the total unit import volume.
The percussion category accounts for a large proportion of
the industry’s total unit imports due to the number of consumable
products included in the segment such as drum sticks, mallets and
drum heads. As a result it is not surprising that drummers, like
guitarists develop strong relations with their music stores in ways
that piano or keyboard players generally do not.
The category has again delivered a strong result in 2005, especially
in light of the 15% increase recorded in the previous year. Unit growth
in the 2005 financial year increased by a modest 1%, imports rising
to more than 838,000 units, the continuing the upward trend evident
over the greater part of the past decade. However, unlike 2004,
the category recorded an increase in the average unit value of the
products imported, which in turn resulted in an increase in category
import value. The category rose by nearly 12% when compared to
the 2004 result, with average unit values also increasing by 11%
compared to those recorded in the previous year.
The drivers responsible for the category’s unit growth were the
Drum Kits (+10%) and Cymbals, up an extraordinary 29%. Imports
into the Individual Drum segment fell by 5% while the result for
Educational and Other Percussion remained essentially unchanged
in volume terms. All segments recorded increases when measured
by value.
26
26
According to Music USA 2005 the total percussion market in the
US showed a similar overall trend to that of Australia, the market there
increasing in value terms by more than 8% over the previous year.
Overall, it appears however that Australian consumption of percussion
products (based on category value) is not dissimilar to that of the US.
Similarly, there appears to be an upward trend for this segment in
both the UK and Canada during this period based on the available
data from Music USA 2005.
In this past year we are starting to see average unit values increase
again, in many cases for the first time since 2001 or 2002. The initial
fall in average unit values was attributed to the increased volumes
of low cost products, especially from China but also from Indonesia
and India amongst others. Of course at the same time the Australian
dollar was recovering from an historic low valuation against the US
dollar and other major currencies. There is little doubt that these
two factors have substantially contributed to the lowering of values
and consequently retail prices. However, what now appears to be
happening in this category is the beginning of an upswing in import
values. Previously we had seen this in some of the guitar segments.
It is largely a result of more mid-priced product being constructed,
so it is no longer only the entry point product that is assembled in
China and the other countries previously mentioned, as it was two or
three years ago. The change in product mix is seen evident through
increased average unit values.
While exchange rates have had little effect in the past year there
may be a case for transport costs also impacting on the price of
goods imported and sold.
The diversity of product and country of origin, a feature of this
category, continued to be evident in the current year with products
being sourced from more than 40 countries around the world. Around
5% of the total unit imports are made up of ethnic percussion
products sourced mostly from Africa, South America, the Indian subcontinent and the Middle East and demonstrate a continued interest
in drumming styles other than those found in western contemporary
or classical music.
A UASU
TS
R TAR
LA
I ALNI A M
I CS I ACS A
SS
OSCOI ACTI IAOT N
N UMSU
ION
Drums & Percussion
Drum Kits
Drum Kit imports increased by nearly 11% in 2005 further building on the strong upward trend first
established in 2002. This strong result sees the imports of drum kits (comprising bass, snare, two mounted
toms and floor tom drums) increase to over 12,000 units for the first time.
In a rare circumstance in 2005, the growth in the value of imports actually exceeded the growth of unit
imports with import value increasing by nearly 12% to a nearly $3.75 million.
Average unit values rose marginally with the segment recording a1% increase in average unit values in
2005 compared to 2004. This result seems to indicate that the segment pricing has stablised after the
dramatic fall in average unit values experienced between 2002 and 2003. When uplifted to retail the average
drum kit has a price of around $730 in 2005, up from around $715 the previous year.
Chinese drum kits overtook those from Taiwan in 2005 to take the largest share of volume with nearly
50% of all imports. The more than 6,000 imports from China in 2005 represents a 71% increase in volume
from that source. Taiwanese imports while still clearly the second most numerous within the segment fell
by 17% in 2005 compared to the previous year. Indonesian imports represent the third major source of
supply. Imports from Thailand, a previous major source of product, along with Japan and the US all but
evaporated in 2005.
When measured by value Taiwanese imports hold the leadership position with 43% of the segment total.
The major drivers behind the increase in average unit values were the Taiwanese and Indonesian imports.
Taiwanese import values in particular grew strongly in 2005 with a 15% increase on average. Additionally,
the average unit values of imports from Japan, Thailand, Britain and the USA also increased, though
the effect of this is limited as these countries collectively hold less than 10% of the import value into this
segment. Chinese imports went against the trend toward increased average unit values, falling by 3% in
2005 compared to the previous year.
In a segment where price does seem to be a driver of volume the results evident in 2005 mean that the
volume Chinese product has been able to establish a 10% price advantage over Indonesian products, its
nearest competitor in terms of price, and a 40% advantage of its nearest volume competitor Taiwan.
2005 at a glance
Units
+11%
Value
+12%
AUV
+1%
Value
+19%
AUV
-21%
Segment leader by value Taiwan 43%
Five year trend
Units
+51%
Individual Drums
This segment comprises drums that are not pre-packaged as kits. These include many individual
items from the leading brands produced in Taiwan, Japan, Europe, Britain and the United States, as well
as “extras” for standard packaged drum kits such as additional mounted or floor tom toms. Also included
within the segment are specialist drum products such as snare, marching and bass drums together with
congas, bongos and other Latin percussion. Ethnic drum products are also included.
Imports in this segment eased from those recorded in 2004, falling by around 5%. Overall more than 36,000
items were imported in this segment compared to the 38,000 the previous year. However, the 5% decline in
volume was accompanied by a 9% increase in import value and a 19% increase in average unit value.
The 15% increase in average unit values returns this measure to the figures typical of the segment
throughout the period from 1998 to 2001. The increase is primarily driven by increases in the average value
of products from three major sources of supply, being China, Taiwan and Indonesia. The 39% increase
in the value Chinese goods into the segment suggests a significant change in the mix of product being
imported from the country. The size of this change in average unit value from Chinese suppliers suggests
that more higher value products as part of the overall product mix have been imported. Previously we have
seen this trend occur in the guitar segments in previous years and will likely see the same thing occurring
in band products at some time in the future.
Units
-5%
Value
+9%
AUV
+15%
5
Units
+25%
$5.54
$211
$5.18
4
3
$5.34
$197
$195
200
$191 $191
2
1
$5.59
$170
$163
$165
1998 1999 2000 2001 2002 2003 2004 2005
150
Drums- Retail value
Drums- Average Unit Value
Five year trend
$6.31
$6.22 $6.12
6
0
2005 at a glance
250
$6.90
7
This segment is amongst the most diversified in terms of sources of supply with over 30 countries having
contributed to the 2005 result. However, 90% of the product imported and 80% of the segment’s value
are made up of product sourced from just a handful of countries notably China, Taiwan, the USA, Thailand,
Indonesia and India.
8
Chinese imports account for the largest share of both imports (38%) and import value (21%). In unit
terms Taiwanese and US products represent the next largest contributions to unit imports with shares of
16% and 14% respectively. These positions are reversed when measured by import value, with US products
accounting for 19% of the segment value and Taiwanese imports 17%.
Value
+11%
AUV
+3%
27
Drums & Percussion
Cymbals
The cymbal segment recorded an extraordinary 29% increase in unit volumes compared to the 2004
result, with imports rising to over 43,000 units. This growth in imports however, stems not from increased
volumes of Chinese products as we have seen elsewhere in this report but, from increase imports from
the USA (+7,0000 units) and Canada (+3,000 units).
With the increase in volume coming as it does from two high value products sources in the US and
Canada it is no surprise that import value also rose, in this case by 31% over the 2004 result.
Accompanying this increase in imports was a 2% increase in average unit values resulting in the average
unit price, when uplifted to retail, moving from $175 in 2004 to $180 in 2005. Again it is the impact of the
US product, which has had the greatest impact on the average unit value for the segment. In 2004 the
average unit value of US sourced product was, when uplifted to retail, valued at around $285 giving it a
63% price premium over the segment average unit value of $175. In 2005 however, the average value of
US imports fell (-30%) meaning that the price premium in the current year is just 11%. Canadian products
also declined in average unit value terms. This combination of US and Canadian import controlling 57%
of the segment volume and 67% of its value in 2005 effectively controlled the trends within the segment
in the current year. For the record, the average unit values of Chinese, German, Taiwanese and Swiss
products all increased.
As we have already noted the major drivers of import volume were the US with 41% of unit imports,
Canada, (16%), Germany (13%) and China (12%). Import volumes largely followed this group with the US
accounting for 45% of the segment value, Canada 20%, Germany 13% and Switzerland 7%.
Significantly higher imports were recorded from China (+192%) and Germany (+231%) while imports
from the United States and Taiwan also increased, though by a more modest 11% and 9% respectively.
Imports from Canada, Switzerland, Turkey and India all declined.
For the record the data for the September quarter (the first quarter for the 2006 financial reporting period)
shows volumes for this segment to be sufficient to generate a 40,000 unit plus result again next year. This
suggests that the significant increase in volume in 2005 is not as a result of shipping or scheduling, largely
eliminating one possible cause of the large movement in segment volume in the 2005 year.
2005 at a glance
Units
+29%
Value
+31%
AUV
+2%
Value +105%
AUV
+15%
Segment leader by volume USA 41%
Five year trend
Units
+82%
Education and Other Percussion
This segment contributes around 90% of the Drum and Percussion category’s unit volume. The
majority of the volume is made up of ‘consumable’ products such as drum sticks, drum heads and other
accessories. However, major products such as xylophones and tympani are also included in this segment
along with Latin and other percussion items and Orff-style percussion products for use in schools.
The 2005 result shows that the segment recorded imports of nearly 750,000 units, a near record result
and within 1% of the figures recorded in 2004. However, unlike many other segments in 2005 there was
a small increase in the average unit value items imported (+2%) which led to a 2% increase in the value
of the segment overall.
While there is a sameness about the overall figures, within the segment there were some significant
changes apparent. Chinese imports continued to increase (+15%) to claim 65% of the segment’s volume
and 39% of its value. Taiwanese and US imports also increased up by 35% and 15% respectively.
However, all other major sources of supply such as Germany, Indonesia, India and Japan lost volume in
2005 compared to the their respective 2004 results.
While the product captured within this segment is extremely diverse, so are its sources. In all, a record
36 countries supplied percussion products to Australia in 2005 including Cambodia, Trinidad and Tobago,
Ivory Coast and Malta.
12
Units
+13%
Value
+2%
AUV
+2%
Five year trend
Units
+17%
Value
+30%
AUV
-11%
10
8
6
$17.50
$7.83
$17
$8.32
$16
$15
$14
$15
15
$13.50
4
2005 at a glance
20
$11.61
$10.58
$10.52
$10.39
$9.64 $9.92
$13
2
0
1998 1999 2000 2001 2002 2003 2004 2005
10
Education and Other Percussion- Retail value
Education and Other Percussion- Average Unit Value
28
Guitars
The Guitars category is divided into five segments:
Acoustic, electric and bass guitars: these three segments are
the core products within the category representing 73% of the unit
volume and 68% of the category value. Acoustic guitars with over
91,000 units represent the largest share of units for the category
overall, electric guitars with an import value of more than $15 million
the largest share of category value.
Guitar amplification: representing 24% of the category’s value
and 27% of the total unit imports.
Guitar strings: one of the few consumable products within the
industry. ABS statistics only measure import value. The segment
accounted for around 8% of the category’s value in 2005.
Together these segments account for around 18% of the total
industry, the third largest category by value following professional
audio and keyboard products, though this category grew as a
percentage of the total industry by 6% during 2005.
The guitar category experienced its third significant increase
in the past three years. In unit terms the category grew by 6% in
2005, and follows the significant growth of the three previous years
where the segment has grown 14% per annum on average since
2001. Import value for the category also increased, adding a further
10% in value to the 2004 result. These results have had the effect
of adding a further $8.5 million to the value to the industry in 2005
compared to the previous year when uplifted to a retail sales result,
the equivalent of adding around $15,000 to every retail store’s turnover
across the country.
Average unit values for the category also increased, going against
the general trend for the industry overall. The growth in average unit
value however was modest with a 3% increase recorded in 2005
compared to the previous year. When uplifted to retail the average
sale of a guitar product is valued at around $430.
A significant driver of the increased average unit value in some
of the guitar segments was the increase in high value imports. In
previous years this report had noted the trend toward a polarisation
of products toward either high value ($1500 + when uplifted to retail)
or entry point products (less than $400 when uplifted to retail). The
consequence of this trend was the decline both in percentage and
MAARRKKEETT RREEPPOORRTT
22000044//22000055 M
in real terms of mid priced products. This year the further decline of
mid priced product imports, coupled with generally stable prices for
the low value products, which are most often sourced from China
plus an increase in the number of high value products (usually from
the USA) resulted in the increase in average unit values.
There is little doubting that both globally and here in Australia the
guitar and guitar-based music is back and back in a big way. A quick
glance at the Australian ARIA or Billboard International charts, which
were not that long ago dominated by either hip hop or girl and boy
groups, are now full of bands all heavily featuring the guitar or guitar
based singer songwriters.
Whether the music products industry leads the recording industry
or vice versa can be debated, but what is clear is that the presence of
guitar based music in the charts is coinciding with strong increases in
guitar sales volumes. For example the Canadian sales data available
to us through Music USA 2005 shows that guitar products in that
country jumped from some 300,000 units in 2003 to over 450,000 in
2004. A similar story appears in the UK, with sales increasing in the
past year from around 770,000 units to something like 870,000 units.
In the land of the guitar, the United States guitar sales increased in
the 2003/4 by some nearly 1 million units, a 41% increase in one year
to sales of more than 3.3 million guitars. The international trend, like
that of Australia, was for the growth in unit volumes to exceed that
growth in value, meaning lower average prices overall.
In the US both guitar amplification and guitar string data showed
similar upward trends in line with guitar sales. In terms of guitar
amplification the Australian market rose, though more modestly than
that experienced in the US. However, unlike the US, guitar string
imports into Australia remained virtually unchanged compared to an
18% increase recorded in America. Unfortunately at this stage there
is no data available for either Canada or the UK on guitar strings or
amplification sales.
Note: A revised method of analysing the guitar amplification
segment has been used in 2005. This change ensures that both
guitar amplifiers and their separate speakers cabinets are properly
recorded. The previous historic data has been amended to reflect
this change.
29
29
Guitars
Electric Guitars
This segment has continued to record year-on-year growth since its very poor 2001 result. The 2005
year saw a further increase in unit imports of 19% above the 2004 annual result. Overall, more than 62,000
electric guitars were imported in 2005.
Accompanying the increase in import volume was a 26% increase in import value. As a result total
imports for the segment increased to just over $15 million during 2005, the additional $3.2 million in import
value translating to an additional $8 million when uplifted to retail.
While these seem to be extraordinary figures they are broadly consistent with the trends seen in several
other countries during the same period. Music Trades (April 2005) reports that electric guitar sales in the
US rose by 44%, from 1.17 million units in 2003 to 1.68 million a year later. In Canada according to Music
USA 2005, electric guitar sales rose from around 130,000 units to 210,000 and in the UK and Spain the
same trend is also evident. And from the look of the Australian Bureau of Statistics import data for the
September quarter 2005 the trend is set to continue into the 2006 financial year.
Where Australia differs from the US, the UK and Canada is that average unit values also increased along
with volume. The average unit value for the segment here in Australia rose by 6% meaning that the ‘average’
electric guitar when uplifted to retail sells for around $600. In the US, average unit values fell by 22%.
The growth in imports is not surprisingly being underpinned by the arrival of additional Chinese made
instruments. In 2005, an additional 8,300 (+37%) Chinese made electric guitars arrived in Australia and
resulted in Chinese products claiming 49% of all imports. Supporting the surge in Chinese products were
an additional 4,000 guitars from the US, taking total US imports to over 9,000 units or 14% of the segment
total. Mexican imports also improved during the current year.
On the debit side, imports from Korea fell along with imports from Japan and Vietnam. Indonesian
imports changed little during the 2004/5 financial years.
When measured by value the tables are turned with US imports accounting for 47% of the segment
value while Chinese products claimed a 19% share.
When the average unit value of the segment is analyzed some interesting facts emerge. Average unit
values increased by 4% in 2005, yet the average values from most of the major sources of supply actually
declined. US imports declined by 10%, as did imports from China; Indonesian average value dropped by
14% while the average Mexican guitar fell by 7% and the average Korean guitar by 3%. So the while the
figures say average unit values increased, the underlying data shows a decline in the order of around 8%.
The difference between the reported and underlying figure is that the mix of product shifted. The surge
in US imports helped increase the average unit value even though the products imported in 2005 were
cheaper than those in 2004. Added to this, the very low cost Vietnamese product virtually disappeared
and this again meant that the average for the segment overall moved higher.
2005 at a glance
Units
+19%
Value
+26%
AUV
+6%
Value
+71%
AUV
+4%
Five year trend
Units
+63%
Bass Guitars
The strong result in electric guitar products has continued in a more modest way into the bass guitar
segment in 2005, further building on a series of solid recent results.
In all, more than 17,000 bass guitars were imported in 2005, with an increase of just 900 units or 5%
over the previous year. Like the other guitar product segments, bass guitar import value rose in 2005
however in this case it was as a result of the higher unit volumes and slightly higher average unit value
recorded. Average unit value crept up by 3% meaning that the average bass guitar would sell when
uplifted to retail at around $550.
The vast majority of the unit growth in the current year came as a result of a significant increase in the
number of Chinese and to a lesser extent US made instruments. It is familiar story, very similar to that of
the electric guitar segment this year. The growth of imports from these two sources has resulted in them
taking significantly larger market shares. Chinese imports accounted for 43% of the unit volume and 26%
of the unit value. Indonesian imports claimed the second largest share of unit volume with a 30% share
on import volume. When measured by value US imports accounted for 28% (though only 8% of the unit
volume) of the segment, heading imports from China (26%).
Imports from Vietnam all but disappeared while volumes out of Korea were also significantly lower.
With an average unit value of around $2000 per unit US bass guitars are valued at around 6 times that of
the volume Chinese product.
2005 at a glance
Units
+5%
Value
+8%
AUV
+3%
Value
+65%
AUV
+21%
Five year trend
30
Units
+63%
Guitars
Acoustic and Acoustic Electric Guitars
The strong growth of acoustic guitars segment evident since 2002 eased somewhat in the current year,
with import value and unit imports declining in 2005 from their peaks of the previous year.
In all, some 91,000 units were imported in 2005, down 3% from the 94,000 units of the previous year.
Import value also declined falling nearly 3% to a little over $11.6 million.
The decline in import value was softened somewhat by the rise in the average value of acoustic guitars
coming into Australia. Though the rise was modest, import value did increase in 2005, up around 1%
compared to the 2004 result.
Chinese imports dominated the segment, taking their 63% of the imports in 2004 to 76% in 2005. This
increase represents a 15% increase or an additional 9,000 Chinese guitars coming into the country. Not
surprisingly the Chinese share of the segment’s value also increased, rising to 47% in this current year.
The only other major source of product to show any significant growth was that of the US. Imports from
America increased by 37% to over 5,000 units. The high average unit value of these US made products
contributed to the increased average unit value for the segment overall, being as they are on average
nearly 7.5 times that of the average Chinese import.
The extent to which the bottom of the market and the top of the market dominate the segment has
become more pronounced in recent years. Until recently as the price of products increased, the volume
fell away. Now those middle price points once controlled by Korean or Taiwanese product has largely
disappeared. The volume of Korean and Taiwanese imports now barely exceeds that of US imports. This
means that the segment imports significant volumes of low value guitars from China and to a lesser extent
Indonesia and comparatively large volumes of high value product from the US, supported by products
from Canada. Japan and Spain.
The data presented in Music USA 2005 showed that there was dramatic growth in the US in the past
year (units up by 39%) and that similar growth occurred in both Canada and the UK. Our growth while
not mirroring the US experience year by year shows the same strong upward trend.
2005 at a glance
Units
-3%
Value
-3%
AUV
+1%
Value
+46%
AUV
+31%
Five year trend
Units
+12%
Guitar Strings
The ABS only collects data on the value of imports for this segment.
Imports of guitar strings decreased marginally in 2005 down 1% compared to the previous year. Import
value for 2005 was $3.4 million equating to more than $8.5 million when uplifted to retail sales value.
With the current strength of the guitar business this result seems counter intuitive. Without unit volume
data it is hard to say what trends underlie these figures. It may be that we are still seeing the benefits of
an improved exchange rate, especially between the US and Australian dollars, causing the decrease in
the value of imports, but not necessarily implying a poor performance in terms of the number of string
sets actually imported.
What should be evident is that with around 330,000 new guitar imports occurring in the past two years
this segment should be strong for some time to come, even if only a relatively small portion of these new
guitarists continue to play.
The segment is dominated by US imports, accounting for 82% of the total segment value, though this
figure has eased a little in the past few years, including in 2005. Supplies in 2005 were sourced from a
further 15 countries, the most significant of which continue to be the United Kingdom, Austria, Germany
and Mexico.
2005 at a glance
Value
-1%
Five year trend
Value
-12%
31
Guitars
Guitar Amplification
This segment also experienced some of the surge in imports that was evident elsewhere in the
guitar category in 2005. Overall, guitar amp imports increased by 10% in the current year, a strong
result given the 16% increase experienced in 2004. Total imports are now nearly 64,000 up and
additional 7,000 units on that recorded in 2004.
Import value also increased in 2005 rising 9% to over $9.8 million. This increase when translated
to a retail sales value means that around $2 million was added to the segment’s value in 2005.
Like many other segments in 2005 import values failed to keep pace with the growth of unit imports
due to declining average unit values. In the current year, average unit values declined by a modest 1%,
a much better position than the 13% fall in average unit value recorded in 2004. The small movement
in the average unit value of the segment in 2005 means that the average guitar amplifier sale when
uplifted to retail continues to be around the $400 mark.
This comparatively low figure of a little below $400 average unit value at retail suggests that the
segment is dominated by low end, low cost ‘starter’ products. In 2005 75% of the product imported
had a average unit value below $300 when uplifted to retail, emphaising the first time buyer/entry
point nature of the product. It is also interesting to note that the volume of guitar amp and electric
guitar imports are very similar in terms of total numbers in both the 2004 and 2005 financial years.
This demonstrates the interconnected relationship the two products have from first time buyer starter
packs through to high end high value amp/ guitar combinations selected by experienced players.
Chinese sourced products continue to dominate the segment, claiming leadership in both units
(70%) and value (41%). Much of the increase (7,000 additional unit imports during the current year),
came from China. At the other end of the market US imports continued to be strong along with
imports from Britain and Mexico as well as small numbers of specialized product from Germany and
other European countries.
The differential between the entry point Chinese product and the high value UK and US product is
also very evident. Chinese products on average are valued at just 20% of the UK/US imports. Also
evident is the falling away of middle price point product volumes. In unit terms there is comparatively
little product being imported into the $500 to $1500 price range. Products falling into these prices
ranges on average account for around 8% of the total segment volume whereas products valued
at less than $500 account for as much as 75% of the volume and those above $1500 17% of the
total volume.
2005 at a glance
Units
+10%
Value
+9%
AUV
-1%
Value
+27%
AUV
+14%
Five year trend
32
Units
+53%
Digital Electronics
The Digital Electronics product category is divided into four
segments:
Synthesizers: In 2005 this segment represented 29% of the
category value and 10% of the unit volume.
CAMS: Computer Assisted Music Systems, which includes
sequencers, drum machines and sound processors. It represents
18% of category imports but just 13% of its value.
Other Electronic Musical Instruments: An eclectic mix of
products including electronic drums and controller keyboards, sound
cards and modules. It accounts for 21% of the unit imports and 27%
of the category value.
Computer Music Software: Data for the Computer Music
Software segment is extrapolated from ABS import statistics that
include all software product imports. Using this data we believe the
segment to have contributed around 30% of the category value in
2005 with imports accounting for as much as a 50% share of the
total unit volume.
The Digital Electronic category accounts for around 2% of
the total industry’s unit volume and around 4% of its value. The
category’s share of the total market has continued to diminish in
the past two years as a result of the significant growth recorded in
other categories, particularly those of guitar, professional audio and
percussion categories.
In unit terms the category showed a strong 18% increase in 2005
with import totaling more than 36,000 pieces. Unfortunately, the
increase in volume could not be matched in either import value or the
average value of the items imported. In 2005 the category’s value
declined by 5%, wiping off around $1.5 million in value when uplifted
to retail. Average unit values fell by 20%.
It is obvious to us all that this category is suffering as a result of
computer based software and hardware products. These are replacing
many of the rack mount and control surface products that have been
the mainstay of this category for the past couple of decades. Where
the product cannot be replaced by a piece of software or a sound card
it is now being made more cheaply than ever before in China, rather
than in Japan or the USA as has traditionally been the case.
The conversion from hardware to software products is not merely
another evolution within the music products industry. With some of
the major computer manufacturers in the world now directly involved
in the category, the traditional music technology provider channel of
specialist music technology wholesaler and specialist retailer is to
some extent being bypassed by consumers. Software is used as
a hook to sell hardware and an investment in a software product is
not always secure as many products are quickly cracked and then
effectively rendered worthless.
New distribution channels have also emerged. The direct
downloads from the manufacturer are increasing as is the distribution
to the consumer via computer and electronics rather than music
stores. This is especially so of the introductory range of product
whereas more specialised, professional standard products continued
to be serviced by a relatively small number of specialist distributors
and retailers throughout the country.
The trends reported in Music USA 2005 show that hardware
products within this category all declined in the current year with
the exception of electronic drums. On the other hand the value of
software and sound cards recorded a significant 27% increase. While
our source data is not of a sufficient standard to provide us with such
an accurate picture of the position of software and soundcards, the
trends detailed in the US data appear to be replicated more or less
in our own market.
33
33
Digital Electronics
Computer Music Software and Soundcards
The computer music segment is amongst the most difficult to provide detailed information on, as the
Australian Bureau of Statistics data captures all computer software products without differentiation, and
therefore music related products must be extrapolated. As a result, the figures quoted are estimates of
the imports made by music products wholesale companies or sold by specialist music products retailers.
Added to this some software is being pre-packaged and bundled with the hardware products making
analysis even more difficult.
The estimated result for 2005 suggests that import value has increased by 17% compared to the
previous 12 months with unit imports rising by some 24%. This result would value the segment at around
$6.1 million when uplifted to retail with a unit volume of around 18,000 units. Using these estimations
the average unit value of a piece of computer music software is around $380.
This overall average value is skewed downward by the number of “how to” and “learn to play” products,
together with packages of add-on samples and loops for the bedroom DJ. The volumes of these products
reflect their broader distribution via electronics chain stores in addition to specialist music retailers and
feature price points ranging from $99 or less but generally no more than $499 at retail.
The higher value, more technically capable products retain specialist music retailers as their sole,
or at least primary, distribution channel. These higher value products include both music software and
music/sound related computer peripherals such as sound cards. The data from the US provided by
Music USA 2005 shows that around 80% of the volume comprises recording/sequencing software, 8%
notation software and 9% loops and other ‘plug in’ programs.
In addition the US data also shows that sound cards and other audio hardware peripherals are valued
at around a further $6 million when viewed on a pro rata basis here in Australia.
These items are largely sourced from the United States and Europe.
2005 at a glance
Units
+24%
Value
+17%
AUV
-6%
Five year trend
Units
%
Value
+8%
AUV
%
CAMS
This segment combines sequencers, sound modules, drum machines and samplers. These are
generally ’old technology’ items within the digital electronic category, many being replaced by computer
software programs or soundcards and other computer audio peripherals.
In unit terms, the segment increased in size by 11% compared to the previous year. However, the gains
made in imports were not reflected in the segment’s import value, which declined by 18%. Overall, just
over 6,700 units were imported at a value of $1.1 million, or around $2.8 million when uplifted to retail.
The combination of increased volumes and lower values means that average unit values for the
segment fell in 2005. Overall, average unit values for this segment tumbled by 24% in 2005 compared
to the previous year’s results.
Japanese products, which had traditionally been the largest source of items imported into this segment,
were replaced in 2005 by imports from China. Chinese products accounted 84% of the volume and 39%
of the value. Imports from Japan and the US were the other major contributors to this segment.
Small numbers of products were also sourced from Britain, Italy, Germany, Sweden, Taiwan and
others. The increase in the number of Chinese imports with their lower costs was the major influence in
the decreased average unit value and consequent fall in the total value of the segment.
The US results published in Music USA 2005 show that many of the key products contained within
this segment suffered major declines during the past year. Sales of drum machines and in particular
sound modules dropped significantly. Generally the decline in unit volumes was accompanied by an
even greater decline in sales value. Unfortunately there is no data available from the Canadian or British
markets however it is likely the trends evident in Australia and the US also exist in those markets.
2005 at a glance
Units
+11%
Value
-18%
AUV
-24%
Value
-18%
AUV
+2%
Five year trend
34
Units
-20%
Digital Electronics
Synthesizers
Synthesizer imports continued their trend downward as they have for the greater part of the last decade
but especially since 2002 when over 5,500 units were imported. The current year’s result saw as few as
3,600 items imported into this segment, a 15% decline from the result recorded in 2004.
Accompanying the drop in volume was a 23% decline in import value. This left the segment with
a value at import of around $2.7 million, a little less than $7 million when uplifted to a retail sales value.
A decrease in average unit values (-14%) further contributed to the loss of segment value in 2005 and
resulted in the value for the average product sold into this segment falling from around $2150 to below
$2000 at retail.
Japanese products continue to dominate the segment with a 53% share of all unit imports and a 63%
share of import value. While in percentage terms, the share of imports controlled by Japanese brands
eased only slightly, the loss of around 500 units from Japan represented the majority of the movement
within the segment in 2005. Italian products also recorded significantly lower imports numbers in 2005
than in the year prior, while imports from the US increased. In addition to imports from Japan, the USA
and Italy there are a comparatively small number of imports from Sweden, Britain, Korea, Chinas and
Germany.
The decline in average unit value came primarily as a result of the reduced cost of Japanese imports
in 2005 compared to 2004. Unit values from Japanese sourced items decreased on average by around
12% in 2005. The lower average unit values were also evident in imports from the USA and Italy during
the current year.
Music USA 2005 reports that synthesizer unit sales in the US remained virtually unchanged in the current
year. Overall US sales are reported to be around the 65,000 unit mark which, when sales are converted
to a pro rata result here in Australia (around 4,300 units), means that the 3,600 odd unit imports recorded
domestically in 2005 shows that we have slipped behind the US benchmark.
2005 at a glance
Units
-15%
Value
-23%
AUV
-14%
Value
-28%
AUV
+5%
Five year trend
Units
-25%
Other Electronic Instruments
This segment is an amalgam of a wide range of electronic components including electronic drum
pads and controller units, electronic stage pianos and keyboard controllers, and sound cards for use in
computer music applications.
Because of the catch-all nature of this segment it can be subject to fairly large fluctuations from year to
year, as was the case in 2005 where a 33% increase in unit imports was recorded. This result returns unit
volumes back to near where they were in 2003, which was a record result. Accompanying the increased
unit volume was a 15% uplift in the value of the segment, rising to almost $2.5 million.
The consequence of these results was a 14% decline in the average unit value of all imports into the
segment. This decrease means that the average retail price has slipped from around $940 per unit when
uplifted to retail in 2004 to around $795 in 2005. The decline comes as a result of increased numbers of
lower value Chinese imports into the segment in 2005 together with declining average unit values from
each of the major three sources of supply being China, Japan and the United States.
Chinese products continue as the largest source of supply into this segment. Chinese imports now
account for 52% of the unit total. The previous leader in this segment, Japan, has also been supplanted
by the US, pushing Japanese imports into third place with an 11% share. The now second placed US
imports accounted for 28% of all imports in 2005. When measured by import value it is the US product
that holds the leadership position with a 35% share of the segment overall. Chinese and Japanese
products contribute 28% and 22% respectively to segment value.
Both China and the US were the source of the unit growth in 2005. Chinese products increased by around
1,500 units to exceed 4,000 units in total while an additional 1,100 units were imported from the US.
Because this segment in Australia collects data on a diverse range of products we are unable to
ascertain how particular groups such as electronic drum pads or controller keyboards are performing.
The US data is better than ours in this regard with Music USA 2005 reporting a 7% increase in the value of
electronic drums sales in the current year, while at the same time recording an 1% decline in professional
style electric pianos and organs and a 21% decline in the number of controller keyboards sold.
2005 at a glance
Units
+33%
Value
+15%
AUV
-14%
Value
+91%
AUV
-30%
Five year trend
Units +173%
35
Professional Audio
The Professional Audio category is divided into four segments:
Speakers: representing the largest volume segment with around
50% of unit imports and 21% of value.
Amplifiers: with 12% of the category’s import volume and 13%
of its value.
Signal Processors: with 17% of volume and 23% of value.
Mixers and Multi-tracks: with 20% of volume and 42% of
value.
This category is the largest of the industry accounting for 23%
of the total industry value, a result consistent with previous years
since 2000.
Like many other categories in 2005 the Professional Audio
category recorded solid unit growth, however, this growth in units
was not matched by a comparable increase in the value of category.
Rather, the 8% increase in import volume, driven by increased
volume in the amplifier and mixer segments was accompanied by
a 2% increase in the value of the segment. This situation comes
as a result of an easing in average unit values in each of the mixer,
speaker and amplifier segment.
Overall, the average unit value for the category slipped by
6% taking the average professional audio unit from being valued
at somewhere around $720 when uplifted to retail sales value to
around $675.
What this data is unable to tell us is how much of the category
is sold through each of the three distribution channels available to
it (music retail, audio production and installation and electronics
retailers), and as a result how we might collectively or individual
choose to value it. What we do know is that this category represents
some $51 million worth of imports, or when uplifted to retail could
be valued at around $127 million overall.
From the available data it is not possible to accurately assess the
relative strengths of each of the channels and therefore accurately
36
36
predict just what share of the product is distributed through the retail
channel, which represents the bulk of the Australian Music Association
membership. However, the comparatively low average unit value of
the category suggests that most of the products imported are for
consumer, rather than professional use.
The data provided by Music Trades and Music USA 2005 suggests
that the professional audio market sales made via music retailers is
in the vicinity of USD $1.5 billion at retail. This includes the sound
reinforcement, signal processing, microphone and multi track mixing
segments. If we were to convert that market to a pro rata basis based
on comparable populations, and then translate that to Australian
dollars, we have a result that equates to a little less than A$130
million. This is about the size of the whole professional audio market
in Australia (not just what might be sold through music retailers or
AMA members businesses) based on the data supplied through the
ABS import statistics.
Overall the US data shows that unit sales in most of the major
segments is moving upward, and that while lagging behind unit
growth, segment value is also moving ahead. The current year’s
result shows a 5% plus increase in the value of the US market. This
means that like Australia, average unit values in the US are falling,
though this trend seems to have slowed somewhat based on the
figures published in the April 2005 Music Trades for many if not all
of these professional audio segments. There is little doubt that the
influence of Chinese products continues to have an effect both in the
US and domestically.
The Australian market may also be benefiting from the forthcoming
Commonwealth Games. While the event is not as big as that of the
Sydney Olympics, nor is there as much need to build infrastructure in
Melbourne to the extent there was in Sydney the coming of the games
may have some impact on professional audio sales, especially within
the production and installation sectors as venues are being built or
refurbished, or as television facilities are upgraded.
AU
US
S TT R
RA
A LL II A
AN
N M
MU
US
S II C
C A
AS
SS
SO
OC
C II A
ATT II O
ON
N
A
Professional Audio
Speakers
The speaker segment includes a number of sub segments namely: single and multiple speakers in
enclosures for use with instruments; and single and multiple speakers in enclosures for use for public
address types.
The consolidation of these four types of speaker products means the segment includes products with
widely differing prices and capabilities ranging form low priced ceiling speakers to high value enclosures
for PA, studio monitoring and for use with musical instruments.
The 2005 result showed imports increased by 5%, a similar result to the movements within the segment
during the previous two years. The increase in volume was accompanied by an increase in import value, the
segment recording a 6% increase in the value of imports in 2005 compared to the previous year’s result.
Chinese products were once again the largest contributor to import volume claiming a 44% share of
all units. This means that the Chinese share of imports has dropped back slightly during the past year,
with their total unit imports falling by about 1,000 pieces in 2005 compared to the previous year. When
measured by volume, imports from Indonesia, Malaysia, the USA, UK and Taiwan also featured strongly.
US imports were the dominant source of import value for the segment in 2005 with US manufactured
goods claiming 51% of the import value for the segment. This strong position stems from the fact that
US imports tend to be focused on the high value PA enclosure sub- segment. Other major contributions
to the 2005 value result came from Chinese imports plus those from Britain and Indonesia.
Average unit values rose marginally in 2005, up by little more than 1%. This is largely the consequence
of more US sourced products entering the country, though these US products in themselves actually
declined by 20% per unit on average. There is the additional impact of slightly fewer Chinese imports in
2005 than in 2004 (the consequence of more Chinese and Indonesian speaker imports in 2004), though
the average unit value of the Chinese goods is essentially unchanged over the two years.
The US data shows a similar increase in the value of the segment to that of Australia during the past
year with an 8% increase.
2005 at a glance
Units
+5%
Value
+7%
AUV
+1%
Value
+12%
AUV
-8%
Five year trend
Units
+22%
Amplifiers
The amplifier segment continued to edge upward in 2005 rising steadily, rather than spectacularly for
the third year in succession. The result, though still along way short of its peak (which was recorded in
1999 on the back of strong infrastructure programs linked to the Sydney Olympics), shows the amplifier
segment to be moving in line with the professional audio category overall in 2005.
Unit imports rose by 7% when compared to the previous year’s result. Import value increased, though
rose at a rate less than that of unit imports rising by just 5% in the current year. These circumstances mean
that average unit values fell within the segment by 4% during 2005 compared to the previous year.
Chinese and US imports hold the largest unit shares of imports with 54% and 13% respectively. These
results represent a further strengthening of the dominance of Chinese imports into the segment and a
weakening of the US position. When measured by value Chinese imports also hold the largest share of
the market. On this measure Chinese imports hold 45%, followed by the US and UK with 15% and 12%
shares respectively.
The average unit value fell overall with values easing on imports from the United States and Britain.
Balancing those declines was a 9% increase in the average value of Chinese imports.
Our local experience in 2005 appears to be similar to that of the US. Chinese products in that market
have continued to strengthen their share of imports resulting in lower average unit values (down 2% in the
current year) on a rising unit base.
2005 at a glance
Units
+7%
Value
+5%
AUV
-2%
Value
-36%
AUV
-15%
Five year trend
Units
-23%
37
Professional Audio
Signal Processors
This segment combines a number of similar product types such as graphic equalisers, reverb delay
and effects units, compressors, limiters and noise gates. These are supplied either as effects pedals and
processors for guitarists, or as rack mounted items for use with keyboards, recording, front-of-house or
permanent installations.
Imports into this segment have edged up a little (+4%) in 2005, though these results do follow a very
strong result in 2004 where imports jumped by 21%. As a result more than 32,000 items were recorded
as being imported into this segment in 2005, more than doubling the 1998 result. These results represent
a strong performance, especially when computer music programs can potentially substitute some of
these hardware items.
Accompanying the increased unit imports was a 3% increase in import value. Average unit values as a
result have remained virtually unchanged and when uplifted to retail are valued at around $890 on average.
US products have again claimed the largest share of the segment’s unit volume accounting for 41%
of the total. Other significant contributions in terms of units come from China (25%), Taiwan 12% and
Japan (6%). In the current year, imports from the US, China and Taiwan all increased their shares of the
market, while imports from Japan, Britain and Korea all declined.
When measured by value, US sourced products again hold the largest share of the market, claiming
a 47% share of the segment on this measure. Products sourced from Japan (10%), China (9%), Britain
(8%) and Taiwan (7%) also make significant contributions to the segment’s value.
While average unit values have changed little overall there have been some significant movements
within the segment. The average value of Chinese imports fell 36% in 2005 compared to 2004. This
of course suggests that there was a different mix of product involved across the two years affecting this
change. Balancing this fall was an increase in the average value of US and Japanese imports increasing
by 20% and 9% respectively.
The US data from Music Trades and Music USA 2005 shows that the US market volume rose by
around 13% in the current year, though for many of the same reasons as our own, import value slipped
into the negative as a result of lower unit prices.
2005 at a glance
Units
+4%
Value
+3%
AUV
-8%
Value
+60%
AUV
+22%
Five year trend
Units
+32%
Mixers and Multi Track
Like several of the professional audio segments, the mixer and multi track segment comprises several
sub-groups including powered and non powered mixers, and mixers with recording facilities.
The 2005 imports surged to record a 22% increase in unit volume. However, despite the increase in
volume, segment actually eased a little, down 1% on the 2004 result to record a figure at import of $21.54
million. These results mean that while over the past four years the Mixers segment value has recorded
results in a narrow band between $20.7 million (F2001) and $21.8 million (F2004), in effect adding around
1.25% in additional value per year between 2001 and 2005, at the same time unit imports have on average
increased by around 9% per annum.
These results stem from reductions in average unit value of the goods imported into the segment in
the past two or three years. The chart below clearly shows the declining average unit values from a peak
of over $2,000 in 2002 to a little over $1,400 recorded in the current year. The trends of rising unit sales
and falling unit values that are evident in Australia are also evident in the US. There average unit values
have tumbled from a 1999 high of around USD$980 per unit to a 2004 result where the average unit
value barely tips USD$500. During this same period sales have increased from around 326,000 units to
over 505,000 units, a 55% increase.
Overall, Chinese imports make the largest contribution to unit imports with a 42% share, followed
by the USA with a 29% share. When measured by value US imports control the largest share of import
value with a 27% share. Other significant contributions come from the UK, China and Japan. Within this
setting there have been a number of changes in the current year. The import volume of Chinese, US and
Taiwanese products all increased in 2005, driving up the segment overall. The year also saw imports
from Japan and Britain decline in number.
In addition to the volume of product from these major sources of supply there are a number low volume,
high value products from a range of sources including from Canada and a number of European countries.
When measured on a pro rata basis, US and Australian consumption of mixer products is remarkably
consistent at around the 32,000-34,000 unit mark.
2005 at a glance
Units
+22%
Value
-1%
AUV
-20%
Value
+35%
AUV
-12%
Five year trend
38
Units
+60%
Professional Audio
Microphones
This category, which includes both wired and wireless microphones, has recorded a 1% increase in unit
volume in 2005 taking imports from around 135,000 to over 137,000 units. Import value has remained
virtually unchanged over the 2004/5 period at a little under $9 million. Like other segments within the
professional audio category, sales of these products are distributed between music products retailers,
audio production and installation companies and electronics retailers.
Average unit value consequently dropped a little, moving down around 1% in 2005 and taking the
average microphone sale, when up lifted to a retail value to around $165.
Chinese imports continue to control the largest share of the segment with a 29% share of all units
imported. The growth in the segment can be attributed to increased imports from China, Mexico and
Taiwan in particular. Offsetting gains from those countries were declining imports from the USA, Germany,
Japan and Austria. When the data is viewed by value Mexican and US products are shown to enjoy
the largest share of the market (both 16%). Other major contributions to the value of the segment come
from China, Taiwan and Japan.
The data collected by the Australian Bureau of Statistics shows imports for both wired microphones
and wireless microphone products. In 2005 wired microphone imports accounted for 73% of the total
imports into the segment.
In the US, Music USA 2005 reports that the market for microphones has increased by 5% in value
during the past year. On a pro rata basis Australian volumes need to be in the 170,000 unit range for
them to be considered equivalent in size to the US, though the ratios between wired and wireless products
seem to be comparable between the two countries. At this point of time the US data remains the only
comparable data available to us.
2004 at a glance
Units
+1%
Value
+15%
AUV
-1%
Value
+2%
AUV
-17%
Five year trend
Units
+23%
39
Traditional Instruments
This category combines a number of smaller product groupings such as mouth organs, accordions,
ethnic stringed instruments such as banjos and other high value instruments used in producing traditional
or folk style music. Because of the diverse nature of this category the annual value and average unit value
results are susceptible to wide fluctuations.
In 2005 these fluctuations were most evident in the unit and average value measures, with import volume
increasing by 39% to over 105,000 and average unit values declining to around $75 when the uplifted to
retail, a drop of over 50% compared to the previous year. These changes appear significant, yet if we were
to amortise the last three years’ results we would see that in terms of import volume very little has changed,
with an average import volume over the period 2003 to 2005 of just over 90,000 per annum. This scenario
resulted in the total value of the segment remaining largely unchanged, with segment value falling by just
over 1%.
Because of the diversity of product captured within this segment we have products included that are
valued in the $10,000 to $20,000 range from France, Italy and Hungary for example alongside low value
items, often harmonicas with retail values of less than $10 per item from China, Indonesia and Hong Kong.
Falling between these two extremes are hundreds of accordions, banjos and other high value products used
in traditional and folk music from around the world.
Overall, China is the dominant supplier with a 47% share of the unit imports. The majority of the growth in
unit imports in 2005 can be attributed to a 28% increase in the volume of Chinese product entering Australia.
When measured by value, imports from the US (26%) and Germany (14%) account for the largest shares.
In the case of US imports this result comes from the importation of a relatively small number of high value
goods with an average value when uplifted to retail of over $2,000 whereas German goods are the second
most numerous, behind China though there value is almost twice that of the Chinese product.
2005 at a glance
Units
+39%
Value
-1%
AUV
-56%
Value +300%
AUV
+55%
Five year trend
40
Units
+93%
Orchestral Stringed Instruments
The 2005 result for this segment is the first in several years where volumes have declined. The category
while covering all orchestral string products including orchestral harps is largely made up of large numbers
of low end beginner violin sets for use in schools and by students studying the instrument in private teaching
studios around the country.
Nearly 21,000 orchestral stringed instruments were imported in 2005, a 1% decline in volume compared
to the previous year. While imports fell marginally, the value of the segment rose by 10% on the back of an
11% increase in average unit values for the segment overall.
Chinese products retain the dominant position in the market with 81% of all orchestral string imports and
68% of the import value. These results show a further strengthening of the Chinese position in this segment with
Romania now being the next largest supplier by volume and value with shares of 6% and 7% respectively.
Supplementing the Chinese and Romanian imports are small numbers of high value products primarily
from the US and Europe. In all, some 250 high value products were imported in 2005. This represents just
1% of the total volume for the segment. These products however, accounted for around 14% of the value
contributing over $417,000 to the segment at an average value of nearly $4,500 per instrument when uplifted
to retail.
The data published in Music USA 2005 suggests that, like Australia, average unit values are following a
downward trend in the US as volumes continue to increase. These similar trends are also evident in the data
available from the UK and Canada, making stringed instruments the strongest performing segment within the
school or educational music market internationally.
The relative strength of this segment internationally is likely to be as a result of increased awareness with the
community that young children have the most to benefit from learning to play a musical instrument. Violin is an
instrument that can be commenced at a young age – certainly younger than most brass or wind instruments
- it is comparatively inexpensive and there are increasing numbers of teachers available to teach.
2005 at a glance
Units
-1%
Value
+10%
AUV
+11%
Value
+7%
AUV
-15%
Five year trend
Units
+27%
41
Print Music
Total imports were valued at just a little less than $7.5 million in 2005, the import data also recording that around
1.1 million items of printed music products were imported during that period. When local production and imports
are combined, the total value of the segment ‘at cost’ (i.e measured on a similar basis to the import value of other
segments in this report) was a little less than $11.0 million in 2005 and increase over the previous year of around
5%.
12
10
$ Value Millions
This segment uses a combination of data supplied by the Australian Bureau of Statistics and information
provided by the Australian publishers and distributors via the Australian Music Publishers Association Limited
(AMPAL). Because this segment includes a substantial amount of locally produced product, the ABS import data
alone cannot be relied upon to give a complete picture of the segment. As a result it is difficult to get an absolutely
accurate picture of this segment.
$11.33
$11.61
$11.03
$11.12
$10.91
$10.01
$10.38
$9.48
8
6
4
2
0
1998 1999 2000 2001 2002 2003 2004 2005
Print Music Import Value
As usual the vast majority of imports were sourced from the United States. In 2005, the share of imports form
the US had increased marginally, now up to 72% of all imports. While volumes from the US increased the value
recorded from that source declined, claiming 60% of the total import value for the segment. The other major source
of supply is Britain where 22% of imported items originated during the past year.
The strength of the Australian popular music scene in 2005 should have assisted the sales of local print music,
as Australian artists held the number one position on either, or both, the ARIA single or album charts for a significant
period of the year. In addition to Missy Higgins artists like Pete Murray, Rogue Traders, INXS, Shannon Noll and of
course Anthony Callea have been regulars on our radios and televisions.
The impact of these Australian artists, together with an international pop chart that that once again features bands
making music like Green Day, Franz Ferdinand, White Stripes, Coldplay and Good Charlotte, amongst others, are
example so this revitalised band and guitar based music. There is little doubt that groups like these inspire the take
up of the guitar and as a result an increase in printed music.
Furthermore with the significant increases in imports of guitars and, to a lesser extent keyboards, over the past
year or two should be stimulating sales for printed music – including tutors, self teaching materials and repertoire.
2005 at a glance
Value
+5%
Segment leader by units USA 72%
42
Accessories
Accessories includes products such as woodwind and brass mouthpieces, reeds and their cleaning
and maintenance items, piano strings, electronic peripherals, cables and connectors, music boxes,
metronomes, music stands, cases, bags, picks, straps, capos, benches for pianos and organs, storage
media for electronic products and so on. Not included are guitar and bass guitar strings, and drum items
such as sticks and heads which are accounted for in their respective product categories. The Accessories
category is measured by value only.
Because the individual items in this category are often of low value, it may come as a surprise to learn that
the category is consistently amongst the largest of all those measured in this report. Accessories account for
around 7% of the total value of the market, which when uplifted to retail, equates to around $38 million.
Import data shows that there was a 4% increase in the value of the segment in 2005 compared to the
result recorded in the previous year. The value of imports exceeded $15 million for the first time.
The longer term trend for this category has been a steadily moving upward growth averaging a 4% plus
increase over the past five years. Without the benefit of unit import data it is not possible to tell if volumes
are increasing, but it would make sense if that were the case, given the increased numbers of products
in many of the segments analysed through this report being sold into the Australian market over the past
few years.
The source of these products mirrors that of the industry overall; imports from China, the US, Taiwan,
Japan, Korea and Indonesia dominate, and are followed by a plethora of lower import numbers from countries
that are distributed throughout the world.
Overall, US products represent the largest share of the category claiming 27% of total value.
According to Music USA 2005 the US accessory market increased by 8% in the current year.
2005 at a glance
Value
+4%
Five year trend
Value
+18%
43
DJ Products
The DJ segment causes some problems in terms of analysis, primarily because it is a consumer group
rather than a product segment. The consumer might be a DJ but he or she will buy products contained within
the professional audio category such as speakers and mixers, as well as from the Digital Electronics category
where purchases may include synthesizers and computer music products.
However, the data for turntable imports gives us some reference to the health of this market segment.
Of course, while the majority of these turntable are destined for use by DJ’s, some products, especially the
high value items are used by audiophiles who have a preference for listening to analogue rather than digitally
re-produced music.
Turntable imports totalled more than 26,000 units in 2005, up 4% from the previous year. Import value
however decreased by 3% over the same period. This resulted in average unit values declining by around 9%
compared to the previous year with the unit value in 2005 when uplifted to retail moving from around $512
to a little below $470 during the past year.
According to Music Trades Music USA 2005 DJ sales value rose by 4% during the current year. In their
commentary Music Trades and NAMM are saying that the DJ market has matured and is flattening, with DJ
CD players being the only area of growth in the past year. Canada is the only other source of data for this
segment we have access to and there results show a continued influx of product into that market, though
like Australia at reducing prices.
The majority of the growth in unit terms during the past year has been generated by Chinese imports.
These products continue to claim the largest share (58%) of the total segment imports, and 47% of the
segment value. These results indicate that Chinese imports have strengthened their position in the past
year. The other major source of supply is Japan with a 22% share of volume and a 24% share of import
value. In addition Malaysian and Taiwanese imports contribute 5% and 11% to the segment volume and 7%
and 12% respectively to its value.
2005 at a glance
Units
+4%
Value
-3%
AUV
-9%
Value +127%
AUV
-11%
Five year trend
44
Units +165%
Supply of this Report:
One copy of this report is available at no
charge to all fully paid-up members of
the Association. Extracts can be sourced
from the members-only section of the
Association’s website:
www. australianmusic.asn.au
Additional printed copies are available to
members at $40 per copy.
For more information or to place
orders please contact:
Ian Harvey
Executive Officer
The Australian Music Association
MBE 148/45 Glenferrie Road
Malvern. VIC. 3144
Phone: 03 9527 6658
Fax: 03 9507 2316
Email: info@australianmusic.asn.au

market report - Australian Music Association

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