Price developments for music equipment in the studio industry
The entire studio industry has had to go through a lot within the last two years, among other things due to the pandemic, regardless of whether it is a recording studio or a mastering studio acts. Trade disputes between China and the USA, delivery problems and not to forget the current energy crisis are certainly responsible for a 2020% increase in prices for mixing consoles since 63! In the further course of the article we will now deal with the demand and price development in this segment and shed light on the background to the changes.
Price development for music equipment - the current status
An investigation by idealo.de on their platform in relation to the demand and price development of synthesizers, mixers and (special) DJ equipment (such as audio software, DJ mixers and media players) provides insightful insights here.
- Corona seems to bring more people to music: In the first year of Corona, the demand for mixing consoles and synthesizers rose by up to 55 percent, and for classical instruments by up to 50 percent.
- Average mixing console prices have increased by 2020 percent since 63.
- The Soundcraft Ui24R is the most popular mixer at idealo, and the FL Studio 20 Producer from Image Line is the clear favorite among the audio software
One could find out that since January 2000 the price of mixing consoles in particular had increased significantly. The biggest jump can be seen between July 2021 and April 2022 - during this period the price doubled.
Increase in demand in the guitar segment
According to industry association Somm (Society Of Music Merchants) based in Berlin, the demand for electric guitars from January to November 2020 rose by almost 30 percent compared to the same period last year, and by 20 percent for acoustic guitars. The increase in demand was of course a major challenge for the suppliers.
demand in the pro audio sector
In the professional field of audio engineering around recording studios, the demand seems to be similar to before the pandemic or even declining. Regardless of whether these are active studio monitors, analog Equalizer or audio compressors if you exchange ideas with colleagues in the industry, it seems as if the purchasing behavior of studio operators is at least not increasing exorbitantly. Due to the rising prices for a universal audio interface or a Flock audio patch xt, for example, investments are sometimes not made. Unfortunately, exact evaluations and statistics are hard to find in this segment.
Of course, the question remains open as to whether the price development is related to increasing demand or not (past) supply bottlenecks, increasing inflation or simply better technology had an influence on it. We can only speculate at this point.
Which problems are known to us and what influence they can have
The global semiconductor crisis
At the beginning of the corona pandemic in spring 2020, there were fears that the semiconductor market would collapse. In any case, due to the rapidly accelerating digitization in a wide variety of segments, demand was significantly higher than production capacities. Also due to the increasing employment in the home office and online conferences, the capacity gap became larger and larger.
The shortage of semiconductors is having an extreme impact on the automotive industry. During the lockdown and short-time work period, car manufacturers recorded production losses and falling sales figures. As a result, orders for semiconductors were reduced, and in many cases even canceled.
Not to be neglected here is the fire on October 20, 2020 at the chip manufacturer Asahi Kasei Microdevices, better known to many technology enthusiasts and audiophiles as AKM. Numerous manufacturers of high-quality stereo and multi-channel components rely on the Japanese company's exclusive D/A converters and Bluetooth chipsets. The powerful processors are manufactured in a dedicated factory in Nobeoka City, Japan.
The company's importance in the pro audio market is immense: the company's particularly high-quality digital/analogue/analogue/digital converters can be found in a number of devices - including Solid State Logic (SSL), Universal Audio, TASCAM, miniDSP, Merging Technologies, SPL Germany and RME.
Effects of the war in Ukraine
Even the war in Ukraine doesn't simply pass by the pro audio manufacturers. According to Behringer the situation on the market for chips has worsened again: Because of the war in the Ukraine, the production plants there for the noble gas neon, which is needed for chip production, had to close. A global bottleneck is imminent. Ukraine supplies around half of the world's neon production. Of course, this means that the production of audio interfaces or for analog equipment with a digital interface such as devices from Bettermaker Audio is at risk.
The current energy crisis and logistics problems
Price shock: In a year-on-year comparison to 2021, the gas price rose by an average of 184 percent, which means almost a tripling for private customers. Added to this are the developments in the field of fuels. The situation can of course also be adapted to the manufacturers. It doesn't get any easier for them to create great equalizers and compressors for mixing and mastering. Electricity is also required for the assembly of the components and the supply chains and transport costs are also significantly more expensive. The increased energy prices are passed on to the products and lead to an increase in the price of the goods.
You should also consider that logistics costs have increased tenfold in some areas. Containers are standing around at the ports and ships or freight trains are sometimes unloaded with extreme delays.
Increased costs for packaging material?
Right! The shortage of waste paper, which is due to the fact that less was printed during the lockdown and there is now less waste paper, leads to increased costs and a shortage of packaging material. Shipping in boxes from the manufacturer, such as RME or Universal Audio, to the wholesaler or retailer, including Thomann, is common, and then shipping to the end customer. It is hardly possible to send the goods without outer packaging made of cardboard/paper. An alternative would be plastic here, but in terms of the environment that would probably not be the case. The packaging material is a factor in the calculation of goods and naturally also increases.
Reduced magnesium production
The Chinese central administration had decided to meet its CO2 targets and to almost halve the production of magnesium as just one adjusting screw. With a share of 80 to 85 percent, China is the market leader in global magnesium production.
In fact, the alkaline earth metal magnesium is also important in the instrument industry. For example, this raw material is part of violin, cello or double bass strings, guitar strings or bottlenecks and other small metal parts for studio equipment such as microphone construction or our analog helpers in the recording studio.
Even if the situation is not really relaxed due to the war in Ukraine and the increasing costs in the individual process steps, it is to be hoped that the manufacturers will see this as an opportunity and that a rethink will take place.
A first ray of hope, for example, is that Intel and Samsung, among others, are investing in new chip factories. In the state of Ohio, for example, a construction is already planned. Production is expected to start in 2025. This could lead to relaxation in this segment and overcome delivery bottlenecks.