[Trombone-l] End of the Music world is coming

[Chris Tune]

Maybe we should be careful about the CHICKEN LITTLE effect

If people USE the information they have and REWARD those who make fine 
instruments then amazing things happen.  The capital is alloacted (remember 
profit is ALSO capital. . .) to the right place.  This has been common 
classic econ theory since 1776 and "The Wealth of Nations".   Not only Yam 
is making very good instruments--and they ARE. . .they play great and Yam 
has invested in very modern tech equip and training to make their axes very, 
very good.   I may very well wind up getting a Yam bass bone when, and if I 
can save enough to get a bass bone.

You could also make an effort to buy from Kanstul in Anaheim, CA if you want 
an American made fine quality instrument. This is an example of a growing 
"boutique" moving into the majors. Steve Ferguson will tell you and all the 
local folk will concur they make fabulous horns. The horns are not quite up 
at the Shires--fully custom--top flite level of price, but they are really, 
really well made. Zig Kanstul has lots of different models and good design. 
Pricing is similar to Yam.

BUSINESS MODELS
What I think is happening here is one kind of business model (one which was 
particularly well suited to a place like Texas with lots of beginning 
players coming and going all the time) is giving way to another.  Somehow, I 
DOUBT that the big-box model will prevail over the long haul for specialized 
retail like musical instruments.

I especially feel sorry for the Oboists, Bassoonists, and other 
orchestra-only axes. The budget contraints around orchestras and wind 
ensembles has led to an emphasis upon smaller groups.  There is now some 
discussion (I heard it on this podcast--you can subscribe to a music-ed 
podcast called "EdTech Musician"--at http://edtechmusician.libsyn.com/rss) 
of using Rock-band sized groups to teach instrumental music.  That will lead 
to more and more keyboard, bass, guitar (many schools already have the gear) 
and maybe small horn section type ensemble (probably sax, bone and trumpet 
would still fit in).

The rising business model which, collectively, is selling lots of gear is 
the boutique (e.g. Steve Ferguson and his kind) and the internet.  We should 
also look at the Guitar Center business model.  They are doing quite well as 
far as staying profitable. Perhaps this music store chain should have looked 
at setting up regional centers to provide PA gear, DJ gear and home 
recording stuff and should have looked at increasing the general competence 
of its staff, rather than expanding into each and every region around the 
South Central and Western South of the US. I can see their logic in 
expanding.  On paper, each branch added looks like an incremental addition 
of profit. But mistakes, say inventorying mistakes like they mention in the 
news article, are AMPLIFIED.

Unfortunately, most business persons stick with what they already know how 
to do.  Maybe that is OK when growth is not important and you are not trying 
to create large scale.  But, when you try to manage a dozen or more store 
chain, you have to have more wide-ranging idea processing.  You cannot 
simply go about everything always in the exact same way.  There are very, 
very few business-persons who have the imagination and open-mindedness to 
look at what is likely to happen in the future and to give credit to 
alternative methods of retailling.

WALMART
Now, as to Wal-Mart.  My understanding about them, is that their UNIQUE 
feature is a form of cost lowering, by bringing suppliers more intimately 
into the supply chain.  Thus, they have more control over inventory, without 
having to actually invest in holding inventory.  It works using this 
mini-revolution of several years ago called B-to-B.  This is detailed, 
secure hookups between businesses with common interests.  This means that a 
manufacturer of musical instruments might be notified of each and every sale 
of trumpets in each store that their inventory is flowing through---in REAL 
TIME.  That way, the Chinese company making these trumpets would know that 
sales are up and that they better start making lots more trumpets right now. 
If you think about it, this is also done by boutiques like Ferguson--I'm 
sure each of his suppliers finds out very soon if there is an upswing in 
interest in their horns, cases , mouthpieces, misc equipment and so on. 
Steve is in a position to simply email out right away if some particular 
thing is a "hit".   The thing with WM is that this occurs over mind-numbing 
scales of dozens and dozens, if not hundreds upon hundreds of locations. . 
.and then the logistics is also handled carefully by systems. . .thus 
shipping is efficient also.

This way Wal-Mart saves on inventory investments, essentially offloading 
this investment to the suppliers.  The supplier has intimate knowledge of 
just-in-time nature, to allow it to wait as long as possible before ramping 
up production.   It is costly to add productive capacity and then  have to 
wait for the predicted increase in demand. Still, there are very good 
reasons that you have for wanting to predict demand increases and not 
winding up BEHIND.  You see, those who ramp up early enough, can compete on 
PRICE.  This is well known to be the KING of elements of most supply and 
demand equations.

QUALITY
Others here have pointed out that the qualities inherent in musical 
instruments go way beyond price.  And I agree.  I think we are seeing this 
business model change in an area where there are less emphases upon quality 
(you likely will not see this kind of thing in the PRO arena) .  This is 
because some areas of the country have lots of beginners who get into music 
just during Middle School and High School and then maybe a little in 
College.    But then, these players don't get involved in much more than the 
school groups.  As a teacher, I'd still council them that their experience 
would probably be more fun if they look for a quality instrument.  Maybe not 
every family is going to go that way.  People are watching every dollar more 
than ever with gasoline being more expensive.

I don't like the idea of thoroughgoing GLOBALISM more than anybody else.  I 
think that various nations are too command-and-control oriented (China, 
Vietnam, Russia and some of the former satellites) to really present a 
transparent and fair platform for international capital flow and 
international pure-market economic effects to really function properly. 
Look at the worry about China's and Russia's development.  Neither is really 
very well trained in market economy effects.  They continually examine our 
capital markets with a mind toward mimicking US and European capital markets 
(when I was at NASD, entire Chinese delegations would come trooping through 
even REMOTE outposts like the Los Angeles, regulatory and examining office I 
worked in. . .I could see from the faces that there was and "I just don't 
get it. . .how could THIS help the Americans. . ??"  and that is true. . 
.the tour should have been through the offices of Business Week magaziine 
and through the living rooms of thousands of invdividual investors. . .as 
well as through the very large number of smaller companies getting 
capitalized. . .this is how the magic really comes together. . .and stock 
capitalization doesn't really even KICK IN until the company is already as 
large or larger than this music store thingy in Texas--typically in excess 
of 100 million annual sales on an ongoing basis, for quite a few 
years--prior to that you have debt financing--most often through 
banks--sometimes through private placements)

If you want to read up on the international side I hear that NYT reporter 
Thomas Friedman has a very good book on the increasing globalization of the 
economy. I'd caution people to remember that war is antithetical to 
conducting orderly business--so even the most ardent supporter of business 
globalization would NEVER want to increase the amount of general WAR.  This 
is axiomatic and is one of the real flaws people have when they try in their 
own feeble way to understand American Business. The only companies that 
profit during war are the arms manufacturers, military equipment makers and 
munitions makers.  Look up who these companies are, and you will be 
surprised to find that other than the Aerospace and large military durable 
goods sector (e.g. Hummers, Shipbuilding. . most are not even very large 
businesses.   Example--rifles, handguns, ammo and so forth are made by very 
small outfits indeed.  Often these are family and closely held companies 
which have been around for a long time--example Berretta, a family owned 
business HQ in Italy, with substantial other operations world-wide, supplier 
of all handguns to the U.S. military.  Their model 92 automatic is the 
standard issue auto handgun as sidearm for each and every soldier and 
officer.

Examples of large war BUS- General Dynamics--Lockeed-Martin Aerospace, 
Boeing Corp


FINAL NOTE
Let's also remember that the FACE of MUSIC is really changing radically.  I 
remember being BLOWN AWAY by some gals playing in a violin group at NAMM two 
shows ago. They came from Japan or Korea but were really modern kids and 
they played acoustic fusion style violin ensemble.


Chris













----- Original Message ----- 
From: "Daniel Pliskin" <daniel_pliskin at hotmail.com>
To: <trombone-l at server5.samford.edu>
Sent: Saturday, July 22, 2006 10:14 AM
Subject: Re: [Trombone-l] End of the Music world is coming


>
>
>> Even if it has to be unsoldered and reassembled by a quality
>>craftsman, I'll take the horn 30 years old over a new one any day. They
>>were
>>made out of better stuff back then, and were actually made with the idea
>>that the horn could be rebuilt 2-3 times if reasonably taken care of. 
>>Trash
>>a newer one, and you'll end up buying another new one.
>
>
> It wasn't all that long ago when we were saying about the same thing about
> Yamaha instruments.
> with oversight and training, they too will be able to turn out quality
> instruments, in time.
>
> DanP
>
>
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