by Peter Wolf.

Peter Wolf

NAMM 2008 was a very interesting show on many levels. Please refer to the Modern Guitars NAMM coverage on the Front Page as far as products and trends are concerned. As usual, I didn’t have the time and chance to see all the new stuff.

Oh…and just in case MG won’t mention anything about it: The Zoo in the Hilton bar arrived at a new level. Amongst many special characters, costumes and hairdo's, we had Darth Vader, Elvis Presley, Brave Heart, Highlander’s opponent and many other famous characters in great variety including a number of female look-alikes that took your breath away if you are into that sort of thing. I’m still not sure why but the Hilton Bar during a NAMM show has become a social event for Orange County and its inhabitants. The international flair and some rock stars seem to be making the locals show off in a big way.

I’m also not sure if musicians, whether they a pros, beginners or play occasionally, are too much interested in the corporate development of the Music Industry. In case you are, please read on. If not, you may leave it to the industry insiders to learn about my recent thoughts.

Well, my take is that things are changing fast these days and it remains to be seen if they are changing for the better or worse for some of the involved brands and their owners.

A few months ago we saw one of the biggest fish swallow another pretty big fish that owned six or seven brands. Last week we saw the same big fish nibbling away on another well-sized fish and it seems the two of them now are partners. At least for the time being.

I can’t help it but lately it seems the big fish are trying to eat every other fish until there is only one gigantic fish in the pond. We’ve known this from other industries and it’s starting to happen on a more regular basis in ours.

No matter where it happens, it usually either means that the candidate that gets swallowed hasn’t been overly successful or his owners want out, sell off and live rich until they die. Or both.

Mergers, acquisitions, takeovers, shareholders and outside money pouring into the musical instruments industry have become a common scenario and it has in some cases led to companies going public. And like in any other industry, people need to make more money in an increasingly competitive environment, although it seems only a few are acknowledging the economical challenges we’re facing.

When companies are getting to a certain size, the usual thing is that accountants and lawyers take over and since they usually have no clue as to what’s going on in the market place, it’s critical that they trust and support the people who know what they’re doing out in the field.

Otherwise, things get wacky - fast.

People don’t even blink anymore when a bank buys another bank. We don’t really seem to care what our cell phone provider is called, as long as the damn thing doesn’t stop working or unless every second call drops instead of every fifth. Unless they’re dealing at the stock market to make profit, people are usually not emotionally connected to any of these companies or brand names. I think one of the reasons is that it gets increasingly more difficult to understand and identify with corporations since the individual personal contact is reduced to speaking with answering machines most of the time.

Occasionally, and if you’ve been real patient with the machine, you may get a humane “I’m sorry, you have to call a different number”. But even if you get through to a helpful and knowledgeable employee of the corporate world you usually can’t speak to the boss, the owner, the creator or the name behind the product. This makes the experience very impersonal and unsatisfying.

I think it’s a little different with brand names in our industry. I think musicians care a bit more.

At least they have in the past. Musical instruments are very intimate things. A guitar is as intimate as it gets. Just ask any guitar player. Because of this, guitar aficionados connect to an instrument (and through it to a certain brand) in a much deeper way than we connect to a cell phone.

A cell phone is a device similar to a distortion pedal. A guitar is retreat, a few minutes of peace. It's a sound board for our emotions and feelings, an extended part of our body. It's something that vibrates and gives us the basis we are creating from. It’s much more than a tool to play music or make money. When something happens to our cell phone, like dropping it. It's broken and we get a new one. It’s an inconvenience more than anything. If a guitar we love breaks, we’re broken. Ask any guitar player, his girl friend or wife.

What I’m trying to say is that I think mergers and acquisitions in the musical instruments industry have far reaching consequences for the brands that have been taken over, their employees and systems. If the new owners are only trying to make more money as fast as possible by removing, changing or shortening the old systems, there is a high likelihood that these brands will vanish or become less important and desirable.

Besides financial aspects and their outcome for corporations, companies and brands, mergers and takeovers usually cause extraordinary stress on families, their living circumstances, their income and ultimately their lives. There are also a much greater number of people and organizations affected by acquisitions or mergers than we normally think.

Distribution systems change, locations, logistics, personnel and reasons for representing a brand or a company. The person you’ve been dealing with, the person who represented the brand and supported it through thick and thin is no longer present or able to take care of you. People and companies who have represented a brand in a certain market for decades or more suddenly lose the brand they have invested in and have helped to build.

As a result, their organizations often turn against their former brand. Even if they don’t, it will always be a thorn in their side.

A massive force of negative energy is suddenly released against a brand name and in a small industry like the MI industry, it usually doesn’t lead to more success or brand importance.

I call it Brand-Karma.

I think our actions in life, whether in business or in our personal lives and the decisions we make or have made in the past are impacting our future. We may not always be able to read the signs at any given moment but in the end everybody has to pay their bills, one way or another. The same I believe is true for brands and their representatives.

Let’s see how the year unfolds. It will, for sure, be an interesting year. Best wishes to you for a happy, healthy and successful one.

Peter Wolf