A couple of years ago, it seemed that dramatic pronouncements of the death of the electric guitar were becoming increasingly in vogue. However, guitar sales have actually been quietly on the rise over the last decade, amid the changing demographics of the industry.
According to Fender CEO Andy Mooney, 45 percent of the guitars sold by his company go to new players. Mooney also noted though, that not all beginners retain the hobby for long.
90 percent of beginners purchasing a guitar for the first time, according to Mooney, also abandon the instrument within their first 12 months of playing.
"As an industry, we don’t have a problem attracting new entrants," Mooney told MusicRadar. “We have a member retention issue."
"We did the math. The 10 percent of the salmon that make it through the dam have a lifetime value of $10,000 [each],” Mooney said. “They buy five to seven guitars, they buy multiple amps, they drive the hardware side of the business.
“We felt if we could reduce the abandonment rate by just 10 percent we could double the size of the industry," he continued.
"[There are] a million new entrants in English speaking countries alone every year; only 100,000 of them commit. If you could reduce abandonment by 10 percent, that's an incremental 100,000 with an average lifetime value of $10,000. That’s an incremental billion dollar retail business every year."
A 2017 report from IBISWorld found that the acoustic and electric guitar manufacturing industry is already expected to continue to grow until at least 2022 as it is, so one can only imagine what sort of growth would be achieved if Fender and other guitar giants managed to improve these less-than-stellar retention rates.