Friday 12/03/2010 ~ Vintage Guitars, Supply and Demand
Last week I went to the Philadelphia Guitar Show.
I've been going to shows every three to six months for the last 27 years. It's a way to sell some stuff, buy some stuff, and keep up with what's going on in the business. And most importantly, it's a way to spend the weekend hanging around several thousand guitars!
Here are some pictures from last week's show:
Quiet time before show opening. (This is just a fraction of the room.)
During the show.
Happy guitar dealers:
Jay from New Jersey.
Derek from Nashville.
The used/vintage guitar business has been a fun way to spend the last three decades. Last night as I was nodding off, I started to think about the changes... in both prices and people.
To look at the big picture, we have to start at World War II. After saving the world, thousands and thousands of soldiers came home and started to do the thing they were saving the world for... meeting a nice girl, getting married, and having a big family. The result was a dramatic increase in new babies. This large group of post-World War II kids are often referred to as the Baby Boomers.
To analyze the vintage guitar market, let's look at one randomly chosen fictitious Baby Boomer, Bob. (I like alliteration.) We'll look at his life based on years ending in 0 or 5. This won't be specifically accurate, but all history is eventually summarized into generalized power-points, so I think it will be accurate enough. (Note: our fictitious Baby Boomer could also be a girl... Baby Boomer Betsy?... But for the sake of brevity, in this story we'll just use Bob.)
We start with...
1950- Bob is born.
1965- Bob turns 15. The music world is turned on its head as The Beatles, The Rolling Stones, The Kinks and a dozen other British bands dominate the entertainment scene. Bob and every one of his friends wants a guitar. Guitar sales see an unprecedented spike.
1970- Five years later, Bob is 20. But many of Bob's friends have noticed that although the guitar is fun, it does require a bit of practice. They give up and go back to surfing. (And working on their cars.) This is bad news for several major corporations who, smelling money in 1967, swooped in and bought guitar manufacturing businesses. Previously small companies (Gretsch, Danelectro, Harmony...) now owned by big companies, go out of business. Meanwhile, acts like Led Zeppelin and Jimi Hendrix increase Bob's interest in the guitar.
1975- Bob is 25 and playing in a band. There are lots of used guitars around, and he is happy.
1980- Bob turns 30 and he notices that recently-made guitars aren't quite as nice as older ones. Guitar manufacturers are still trying to recover from the early 1970s downturn, and it shows in the quality (or lack-thereof) of their product. Bob starts looking for older guitars.
1985- Over the last five years, old guitars have become "vintage" guitars. Prices have started to increase, but they are still reasonable enough that Bob can buy them and use them in his band. "Guitar shows" which originally started as informal meetings of guitar-geeks a few years earlier, sprout up around the country. Bob is 35, and thanks to his day job, he can afford to buy guitars for the fun of it.
1990- Bob is now 40. And he now has a serious appreciation for vintage guitars. Furthermore, his childhood friends see the fun he is having with music, and even though they didn't spend their 20s playing in smoky bars, they start to buy guitars, too. And since they got their first guitar in 1965 (the one they gave up on, and have long since lost track of) they look for instruments from that era. Like Bob, these childhood friends now have decent jobs. And they can not only afford to replace their first guitar, they can afford to buy the higher quality guitar they wanted, but couldn't get, in 1965. With the increased demand, and the finite number of pre-1965 guitars available, prices increase further.
2000- By now Bob is 50. Since his kids are out of school (and moving out of the house) he has money. And he's getting evermore nostalgic about the innocent days of his youth and the guitars that he once owned. His guitar collection grows. The vintage guitar market hits full swing as an entire generation reaches mid-life crisis. As vintage prices reach into the thousands of dollars, guitar manufacturers react to the demand with "vintage reissue" models.
2005- Since vintage guitar prices have continually risen for over 15 years (performing far better than the stock market) "investors" of all ages enter the marketplace. Although Bob is still buying guitars, many instruments are being bought by non-players (and in some cases by non-guitar-enthusiasts!) just for the "investment" potential. But the problem with buying something for investment purposes, is that "value" is based on supply-and-demand. The "supply" on something made 50-years ago is obviously fixed. So, for the "value" to increase, the "demand" has to increase. But 2005's increased "demand" is not due to more Bobs entering the market. Bob is 55, and he's slowing down (in more ways than one). 2005's increased "demand" is a false read, inadvertently created by the very speculative investors who are counting on ever-increasing prices. Needless to say, this pattern of constant rapidly increasing prices can't sustain itself. Bob might still spend a few thousand dollars on a cool old instrument. But he's going to think twice about spending $10,000 on a guitar.
2010- Bob is now 60. Since guitars don't wear out, the collection he's amassed over the last 20 years is still in the basement, and the closet, and the spare bedroom. Bob may still buy a guitar now and then, but the kids are gone for good now, and the wife is suggesting a smaller house. So it's more likely that he'll begin to thin his collection. And since there are a lot of Bobs out there, we will begin to see more and more collections hitting the market. The "supply" of quality vintage will no doubt increase in upcoming years. What does this mean for prices? Well, they'll never fall as low as 1980... you have to factor in the value of the dollar, and the fact that there will always be Baby Boomers (like me) who would rather have guitars than whatever money they are worth... But the sky-high prices of 2005 are unlikely to return.
And how does all of this apply to last week's guitar show? Some dealers, like Pittsburgh Guitars, who have always specialized in reasonably priced instruments are doing fine. One thing that Baby Boomers truly succeeded with was the development of rock & roll music. And guitar sales are still strong, with all generations. The depressed dealers at last week's show were the ones who spent big bucks on guitars in 2005. When prices got astronomical, guitars started coming out of the woodwork... well, actually out of closets and attics... and many dealers paid a lot of money for them. Now that prices have settled down, they are seeing fewer and fewer Bobs, and none of the aforementioned, looking-for-a-quick-buck, "investors."
And how does this all apply to you? My advice is the same as it has always been. Buy for love. If a guitar speaks to you and you'll get many hours of fun out of it, and you can afford it, then buy it. If you don't like a guitar, don't buy it. That way you won't have to worry about "investment potential." Bob went through a lot of guitars, but he bought every one to use and enjoy. Be a Bob.
See you soon,
PS: Thinking back to the year 2000, I do remember selling a lot of guitars to guys who were turning 50. The conversations tended to include the words "I've always wanted one of these..."
PPS: And a surprising number of those "turning 50" purchases were Hofner Basses...
PPPS: Getting back to those Beatles, who inspired a generation to take up the guitar (and bass)... They are still an inspiration, as you'll see next weekend at Pittsburgh Guitars Big Beatles Show #8
** Saturday, December 11, 2010
** The Rex Theater
** 25 bands... hours of fun!!
** Cover charge: $5 or two cans of food
** All proceeds going to the Great Pittsburgh Community Food Bank.
** We will also be auctioning a Hofner Icon Bass autographed by the band Barenaked Ladies.
PPPPS: Customer of the week: The Clarks
Friday 12/10/2010 ~ Our Facebook Page
Six months ago I started a Pittsburgh Guitars Facebook page. But I've been unsure about what to post. I didn't want to put stuff like, "Our Martin Guitars Are Hundreds Of Dollars Cheaper Than The Guitar Center!" `cause that seemed kinda advertising-y.... And I didn't want to put any long-winded ramblings, `cause I have the Email Special for that! So, it has mostly been inactive.
Then I got an email from California.
A friend of mine, John Golden, owns an audio mastering company near L.A. I first met him back in the 1980s when my little record label, Bogus Records, was doing vinyl releases. With vinyl it's always a challenge to get your final pressed records to sound like your studio tapes, and John's mastering work was a great help in that area. As we were exchanging recent emails, we started to talk about the past (this tends to happen when old people talk to each other). John mentioned that in the mid-1960s he had a band in Ohio called "The UnCalled Four." Here's their picture. He sent me an old tape of the band. It was fun; they sounded pretty rockin'. Halfway through their set they did a cover of a song called "Nobody But Me." I recognized the song since it was a big hit for another Ohio band, The Human Beinz. Oddly, though, The UnCalled Four's version was a slightly different arrangement. I wrote to John and said, "I'm impressed that your band took liberties with a new, hit song. When doing a current hit, cover bands generally try to sound just like the record." He said, "Oh, no, that wasn't a new song. That was our own arrangement of the original recording. The Human Beinz saw us do it live, and stole our arrangement for their hit record." I said, "Really??" He said, "Yep. The original was done in 1963 by The Isley Brothers."
I was surprised! For some reason I had always presumed that it was an original Human Beinz song. (Mainly because I had never heard another version.) Now I've learned that not only wasn't the song original, the arrangement wasn't either!
If you're under 50 you've probably never heard of the one-hit-wonder band, The Human Beinz. But I'm sure you've heard the song. In fact it was used as the opening of the first episode of this season's The Office.
Here's the opening sequence of Season 7 of The Office. (Recording by The Human Beinz.)
Here's The UnCalled Four's arrangement of the tune. ("Borrowed" by The Human Beinz.)
Here's the original by The Isley Brothers. (The version that The UnCalled Four adapted.)
After hearing the original, then The UnCalled Four's version, then the final Human Beinz hit version, I think The UnCalled Four should have at least received "arrangement" credit on the record... But I'm not sure that you can claim credit for an arrangement of someone else's song...
Hearing obscure original versions of hit songs fascinates me. So I decided that's what I'd put on my Pittsburgh Guitars Facebook page! Links to original versions! It might not be the best ad usage of the page, but, hey, all of these songs have guitars on them! That's enough of a connection for me. If you're out in Facebook-land, stop and visit. Here's a few of the links I put up this week:
The original version of "Piece Of My Heart."
The original version of "I Fought The Law."
The original version of "Good Lovin'."
The original version of "Hanky Panky."
If you have any cool "original version" links, please send `em.
Meanwhile, speaking of bands who did cover songs, and had a lot of their songs covered, tomorrow is Pittsburgh Guitars Big Beatles Show #8. At The Rex Theater. Showtime is 7:30PM, doors open at 6:30PM. Come early because we put a lot of the young bands on first, and it's great to see young folks carrying on the tradition of live rock & roll music!
See you soon,
PS: Getting back to the Big Beatles Show... The cover charge is $5 or two cans of food. No glass containers, please. Proceeds go to the Greater Pittsburgh Community Food Bank. (And if you saw the giant boxes full of cans that I'll be taking to the Food Bank on Monday, you'd understand the "no glass" part. Those boxes are heavy!)
PPS: Also: last month I was able to get a Hofner Icon Bass autographed by the fabulous Canadian band, the Barenaked Ladies. Here's me, them, and the bass. We will be auctioning this bass at the show, and all money will go to the Food Bank.
PPPS: We'll have some prizes and gifts, too!
PPPPS: Speaking of The Pittsburgh Guitars Big Beatles Shows, you may remember that for last summer's show we had scheduled a special guest, Geoff Nugent of the fabulous Undertakers, from Liverpool, England. Geoff and his band were very big in Liverpool in the early 1960s and were personal friends of The Beatles. And Geoff is such a talented and dynamic performer that The Undertakers are still playing today in England and Europe. We were thrilled at the prospect of him appearing at the Big Beatles Show, but some wacky volcano in Iceland erupted and stopped all flights from England. Unfortunately, he wasn't able to get to the USA until after the show. But, fortunately, when he finally did make it to Pittsburgh we were able to record a CD with him! And it's now out! Here's a link. It's a fun collection of classic rock & roll songs. And a great example of the kind of talent that Liverpool, England, contributed to the world. Geoff rocks!
PPPPPS: Customer of the week: WGTRIO
Friday 12/17/2010 ~ Staying Current
Sometimes I feel bad... well, not bad... maybe dated... when I spend so much time in the Email Special talking about music and instruments from the 1960s. After all, no one wants to be out of touch with contemporary culture. Then, earlier this week...
Tuesday night I settled on the couch to watch a few shows. When I turned on the TV it was tuned to channel 213, and coincidentally the show "Glee" was just starting. I know the show is extremely popular, so I thought I'd give it a few minutes. In the first scene the teacher suggested that the class learn a song by Christopher Cross. (Cross is a singer-songwriter who had several easy-listening hits in the early 1980s.) One of the kids raised his hand and said, "If I may, I think I speak for all of us when I say, it's not that we don't like the idea of spending a week on this silky-smooth adult-contemporary, it's just, as teens, this isn't the easiest thing for us to relate to..." He then went on to suggest that they learn a song by Britney Spears instead.
Since this show is clearly meant for a younger audience than 1980s Christopher Cross fans, the kid's request made sense, and ultimately they did perform Britney Spears songs. (Yes, I watched the rest of it.) (No, I don't think the show is for me, so I won't be TiVo-ing it.) (But don't let me hold you back from watching it!) (Meanwhile, aren't those "teens" all in their mid-20s?)
Getting back to my point... The kid on the show said, "as teens, this isn't the easiest thing for us to relate to..." And as he was saying those exact lines, the camera did a long-shot of the glee-club room. And there, in the background, in the same camera shot, was a row of vintage red Kustom amps! I thought it was interesting that the kids couldn't relate to a 1980s singer, but they could relate to amplifiers made in 1968! (Specifically the amps were, from left to right, a K-100 head on a 2x12 cabinet; a P.A. Column; a K-200 head on a 2x15 cabinet, with the P.A. head on top of it; the second P.A. Column; and then another K-100 head on a 2x12 cabinet.)
(Yes, they were only on-screen for one second... but... hey, I can't help but notice the important stuff!)
Since I've never watched the show before, I don't know if these 1968 Kustom amps are used regularly during the music room scenes. But they sure looked great! And when I saw them on a new, popular contemporary show, I felt better about continually discussing vintage stuff weekly, here in the Email Special! So, OK!!! (By the way, here are some Kustom amps.)
On a different topic, a few weeks ago, I was at the Philly Guitar Show, and sold a guitar to a guy from Japan. (This isn't unusual. We've been selling to Japanese dealers at shows for the last 25 years.) As I was selling him the guitar he said, "Hey, you've been in my store!" And suddenly I flashed back to visiting him... although he clearly has a better memory than me, since that was fifteen years ago, in 1995! (Here's a link to his shop.) You see, a friend of mine, Frank D., used to travel to Japan regularly for business. And he raved about a band he saw in a Roppongi, a suburb of Toyko. They're a Beatles tribute band called The Parrots. Eventually Frank convinced me to go and see them. And they are great! Like many Japanese Beatle tribute bands, they don't speak any English, but they sing in perfect English. Here's a brief youtube clip.
While in Japan, I naturally visited guitar shops. And I have one very distinct memory about walking into the aforementioned store owned by the aforementioned guy: the first thing I saw, laying on the front counter, was a copy of Vintage Guitar Magazine.
Vintage Guitar Magazine has been around since 1986, and, as you might guess, it features pictures, stories, and ads for vintage guitars. We've had a subscription since 1987. I guess I shouldn't have been surprised that they would send copies to other countries... but in 1995 I was slightly taken aback to walk into a guitar store on the complete other side of the Earth, and see the same magazine laying on their counter that we had laying on our counter back here in Pittsburgh. I felt, as I do now, that music brings the world together. I had that same feeling during Beatle-week in Liverpool, too... when in a giant ballroom, hundreds of people, from all over the planet, were kind and friendly to each other as they sang Beatles songs together. When you think about it, this world would be a better place if there were more musicians and fewer politicians.
See you soon,
PS: Although I was surprised in 1995, in today's internet-connected world it would not seem strange to see an American guitar magazine on a store counter in Japan. We get emails from other countries every day, and it is now truly a small, small world. (It's amazing how things have changed in just a short time.)
PPS: Speaking of Vintage Guitar Magazine, my fabulous right-hand-girl-Friday, Betsy, has been taking the Email Special pictures for the last several decades. And we're proud to say that one of her photos is on the cover of this month's Vintage Guitar Magazine. They were preparing a story about Gretsch Duo Jets, and they heard that Pittsburgh Guitars owned one of the first Duo Jets made. Betsy took a fine picture of the guitar from our collection, and now it's being seen worldwide! Here's this month's issue of Vintage Guitar Magazine. Good job, Betsy!
PPPS: I'll explain Gretsch Duo Jets in the next Email Special.
PPPPS: Speaking of the next Email Special, the next two Fridays are Christmas Eve and New Year's Eve, so this will be the last Email Special of 2010. Thanks for reading! And thanks for writing back! I love the stories about your guitars... And I love that fact that no matter what the question, someone out there has the answer! Thanks, it's been fun.
PPPPPS: A special thanks to everyone who made last week's Pittsburgh Guitars Big Beatles Show #8 a wonderful success! Everyone had a blast, the bands were great, and we took a lot of food and cash to the Great Pittsburgh Community Food Bank! A good cause, good music, good players, and a good time! Here are some pictures, courtesy of Dennis Pushkar.
PPPPPPS: Customer of the week #1: Pegi Young
Customer of the week #2: Jesse Malin