Ponder This: Gibson Brands' Struggles
By: Ted Gavin, Managing Director & Founding Partner of Gavin/Solmonese
It’s not new information that Gibson Brands, famed maker of guitars, is struggling. And some of the coverage in last week’s PETITION sheds light on why. When Justin Bieber is the only current superstar artist of note that one points to that uses Gibson gear, that’s not a good sign for a brand built on traditional rock star names like Jimmy Page and Slash. Not that they don’t build great guitars – they do, I own several of them. But their problem isn’t aging guys holding on to their musical tendencies. Their problem is that the primary feeder of the market for guitar makers – which is new guitarists – is evaporating.
For the last decade or more, the notion of the rock star front man has all but disappeared. Today’s popular music – like it or not – is more vested in the singer and producer than the musicians. The musicians may be session pros called in for backing tracks on the recording and maybe the tour; or the music may be samples added in production and taken on tour in the form of a digital file. None of this creates the inspiration for people to find a way to pick up a guitar and learn to do that thing that the guitarist in the band they love does on every song. Once Eric Clapton and Buddy Guy are gone, there are no more Eric Claptonsand Buddy Guys to influence the next three generations of hopeful guitar buyers. The Allman Brothers band isn’t the same draw it used to be, and neither is Ace Frehley. Dave Grohl plays Gibson – I have one of his guitars (which is what 1,116,000 American Express Rewards points will buy you). It’s a fantastic instrument and it’s become my primary stage instrument. But not a lot of people are going to buy a $7,000 guitar (for example, I didn’t – hence the AMEX points). John Mayer is perhaps the most well-known mass market virtuoso guitarist-performer today. He plays Fender.
Speaking of Fender, they’re geniuses. They knew they had to make it easier to attract millennials to the instrument, so they created an online lesson system that fits into every learning stereotype of what millennials want. I’ve been a musician my entire life – you generally aspire to play what your teacher plays, and that creates lifelong loyalty. Loyalty entirely unlike what Gibson’s foray into electronic equipment created (hint: if it created loyalty, it was to someone else’s equipment). Gibson makes more than guitars, but nobody’s making bank on the mandolin market. A week ago, I had a beer with a guitarist bankruptcy lawyer friend and we couldn’t remember if Gibson actually made basses. As it turns out, they do (thank you, handy Internet) – but we couldn’t remember anyone who plays one.
And there’s the problem. Gibson is doomed because their market has gone away and they haven’t done the things they need to do to invent a new market pipeline. They say that kids come out of the womb wanting Oreos – that’s great news for Nabisco, but that’s not how it is with musical instruments. If you want a market, you have to constantly create new buyers. Gibson’s efforts in that regard have been ... *sigh* … off-key.
Ted Gavin is a Certified Turnaround Professional and the managing partner of Gavin/Solmonese. In 2016, The Deal Pipeline ranked Ted the #1 Crisis Manager in the U.S. based upon the number of active engagements. He has over 20 years of experience working with distressed companies and their stakeholders in diverse industries, including retail, transportation, regulated and non-regulated manufacturing, pharmaceutical and healthcare, professional services, construction, and metal-forming. He has served in leadership roles in engineering, manufacturing, information technology, and regulatory affairs functions. Ted has extensive experience in strategic planning and process re-engineering, with hands-on management experience in nonprofit, for-profit, and public sector operations. Ted testifies frequently as an expert witness on matters such as ordinary course of business issues in preference litigation, as well as on fiduciary duties of management in distressed companies.