Saddest O of the Week

[Steinway & Sons]

Dear List,

Let me offer some thoughts on the state of the piano market in the U.S. and
the rest of the world.  It seems that though the number of new pianos sold
in U.S. continues to decline there will always be a market for quality
instruments.  Please keep in mind that these are my own opinions and do not
necessarily reflect the position of Steinway & Sons.

Here are the numbers: In 1988 there were 141,600 accoustic pianos shipped
to the US market from domestic and foreign manufacturers.  In 1996 the
number was down to 84,000.  Digital piano shipments during the same period,
went from 49,500 to 58,000.  The good news is that accoustic piano
wholesale dollar sales for this period are up from $569 million in '88 to
$629 million in '92.  These numbers come from "The Music Trades Magazine".

Of the 84,000 pianos shipped in 1996, domestic production represents about
35,000 units.  This is not an insignificant number.  A domestic piano is
defined as one which is more than 50% American made.  This 50% rule is one
used by most industries today and is necessary in light of our global
economy.  By Les's definition, 100% American, not even a Steinway
qualifies. The grand keyboards come from Germany and the upright actions
are built in England.

Some of you may frown on the idea of a Japanese piano assembled in North
Carolina or Georgia being refered to as domestically produced, but consider
the Hamburg Steinway factory.  I can assure you that they consider the
pianos built there to be German.  In fact they refer to Steinway, Hamburg
as a "German Company" which happens to be owned by Americans.  Now, the
attitude when I worked in Lincolnton, North Carolina wasn't quite the same,
but give them 110 years and they'll probably think of those pianos as being
as American as the BMWs being built down the road in Greer, South Carolina.
 My point is that the name of the company and where the profits go is less
important than who is doing the work and where that work is being done.

But, all of this is a side-bar.  The big point is that when you look at the
numbers you'll notice that the average wholesale piano sale was roughly
$4,000 in 1988, by 1996 it was closer to $7,500 per unit.  That change
represents, among other things, a larger number of grands as a percentage
of the whole (from about 1/5 to nearly 1/3).  Grand pianos are good news
because they mean more profit to the dealers and manufacturers and,
hopefully, better quality all around.  I can also tell you that Steinway is
doing better than ever (check the numbers at "www.steinwaymusical.com") and
Boston (designed by Americans, not an imitation of the Asian pianos), which
didn't even exist in 1988, continues to grow - in a shrinking market.

Are pianos now out of the reach of the average person?  Well, they've
always been a luxury item and a status symbol.  In fact, most piano
companies bank on the fact that their product is regarded as a sign of
success, especially in emerging markets like China, Singapore, post-war
Japan, and turn of the century America.

The beginning of the end was the radio and pre-recorded music.  There's no
need to play your own when you can have Horowitz right there in the living
room.  And if we can survive CDs, DVDs, and digital pianos that sound and
play like the real thing, we will all have jobs for as long as we have
Sitka Spruce.


Stephen K. Dove

New York