Legendary all-American company Fender has a problem.
“As an industry, we do not have a problem attracting new entrants,” Fender CEO Andy Mooney said in a presentation in New York City recently. The “bad news is we have a retention challenge.”
According to Fender, the majority of first-time guitar buyers — 90% — abandon the instrument within the first year.
That sharp drop-off rate presented a massive financial opportunity, Mooney explained.
Because “the 10% that don't give up ... they tend to connect to the instrument for life,” he said. “They own five to seven guitars during the lifetime, they buy multiple amps, multiple accessories, they drive the hardware side of the business and they spend about $10,000 through life.”
Introducing... Fender Songs
Over the last few years, Mooney, who has experience running other household brand names like Nike and Disney, has been trying to find ways to fix that.
He launched several apps to address the issue: Fender Tune, Fender Tone and Fender Play. Fender Play in particular was a subscription-based app that now boasts 117,000 active subscribers since launching in July 2017.
Mooney has now launched a fourth one called Fender Songs, which would serve as an all-in-one place for people at all stages to learn new songs on their guitar, ukulele, or piano.
The company’s second subscription-based app sits on top of Apple Music — using Apple’s streaming capability — and offers users hundreds of thousands of songs for $4.99 a month (or $41.99 at year with 10% off of Fender gear). The app is available in iOS in North America, and comes with a 7-day free trial.
Apple has been “very interested [and] very supportive all the way along the line,” said Mooney. Given the company’s hardware and software expertise, “that made the product development on Fender Songs a little more elegant than it would have been with some of the other players.”
Mooney indicated that the app will be made available soon on “more platforms” and worldwide — meaning on Android, as well as through other streaming services like Spotify.
If these investments in the apps pays off, “we could perhaps double the size of the industry,” Mooney said in a 2017 interview.
‘I am a heavy metal fan’
The private American company, which counts heavyweights like Eric Clapton and Jimi Hendrix as its customers, has had a long run since it was founded in 1946. Fender made history in the 1950s by introducing the Telecaster, which quickly became a hit. It followed up with the Stratocaster in 1954.
In past interviews, Mooney said that the Telecaster is his favorite brand.
Favorite song right now? “I am a heavy metal fan and my band is playing a five song Pantera set on Friday,” Mooney said. “So Cemetery Gates by Pantera is a song I cannot get out of my head right now.”
Aarthi is a writer for Yahoo Finance. Follow her on Twitter @aarthiswami.