By G. Bryan Cornwall, PhD, PEng (MBA 2018)
Some of our most profound memories are linked with music: whether it is your first drive, first date, first kiss, or first anything, there is almost always a song that goes with it. Dick Clark is credited with the claim that “Music is the soundtrack of your life.” Music is art, music is emotion, music is life, and as noted by David Byrne, the former front-man of the band “Talking Heads” in his book: “How Music Works”, music is business .
For most of human history music was enjoyed in social venues or at home and necessarily played by live musicians. The invention of recording technology by Thomas Edison in the 19th century has allowed music to grow into a massive industry. The two main multi-billion-dollar verticals are the recording industry and the music instrument industry. The music recording industry generated $16.3 billion dollars in global revenue in 2015, still below their pre-recession height of $17.2 billion in 2007. This industry is comprised of contracting artists, recording, publishing music, and more. Notably, music recording is dominated by the “Big Three” of Universal, Sony, and Warner who comprise 85% of the total industry .
The music instrument industry, although smaller, is still large generating $7.4 billion dollars in the United States alone in 2017. This market has some notable leaders including Fender, Gibson, and Yamaha, but has a much more diverse assembly of small businesses. An improving US economy, a steady stream of new products, and some price hikes have contributed to the highest annual US sales in 2017 since the low in 2009 , as shown in Figure 1. While some members of the musical instrument industry are notable for their historic, conservative, and traditional approach, the industry has expanded with innovation.
Figure 1 – Music instrument industry US sales totals 1997-2017 .
Innovation and Music Instrument Patents
So, what constitutes innovation? Peter Drucker defined innovation as “… the disciplined effort to improve the business’s potential” . While this definition is broad with respect to generating potential for a business, one useful indicator of innovation in a space such as musical instruments is an issued patent. Musical instrument patent classification codes are organized into instrument segments such as wind-actuated (organs and harmoniums), pianos or key-related, stringed, percussion, electrophonic, etc. There is a broad diversity in the types of technologies innovated upon, from innovations in speech processing to guitar strings, as shown in Figure 2 . To gauge the changing dynamics of innovation in music instruments, we assessed the number of US patents issued by decade in the 20th and 21st centuries (see Figure 3) and every year in the 21st century (see Figure 4). Measurable interest in music instrument innovation continues to increase as evidenced by both the rise in the raw number of issued patents and the growing share or proportion of music instrument patents relative to the total number of US patents. The percentage of music instruments patents surpassed 1% of the total patents in 2016 & 2017. There was a notable dip in 2009, after the US economic meltdown, which mirrors the music instrument Industry US sales totals reported by “Music Trades” (see Figure 1) .
Figure 2 – Concepts within musical Intellectual Property; (compliments of Andrea Davis of Bodkin IP Research) .
Figure 3 – Musical instrument US patents through the decades compared with number of issued patents.
Figure 4 – Musical instrument US patents in the 21st century compared with number of issued patents.
California’s History of Innovation in Music Instruments
California has a rich history of innovation in musical instruments. In the late 1920’s the Dopyera brothers developed the resonator guitar, and two companies were formed to commercialize the designs: National Stringed Instruments in 1927 and Dobro Manufacturing in 1928. Guitarist George Beauchamp wanted to increase the volume of his guitar, to move from being poorly heard in the back of the band to the front of the stage. Musician Beauchamp and Engineer Adolph Rickenbacker left National to start their own company and pursue an invention that National Steel did not want to pursue: the electric guitar . Rickenbacker guitars started 15 years before Fender guitars. Leo Fender was a prolific inventor and advanced the business of electric guitars with his designs and focus on manufacturing. Although not located in California, another important innovator in the 1950’s and 60’s was musician Les Paul and his famous guitar manufactured by Gibson. Locally in San Diego, Taylor Guitars and Deering Banjos are leaders in their respective fields. Taylor continues to innovate being one of the first companies to incorporate robotics in the manufacturing. Luthier Andy Powers and Taylor Guitars were recognized for innovation at the 2018 NAMM show with a best of show award for the new V-brace technology in their acoustic guitars. Music instruments are a massive business and growth in that business is driven in large part by distribution and popular culture. The business also grows and evolves with innovation, which is on the rise as measured by patents. A large fraction of that innovation happens in California, which has a rich history in the space.
National Association of Music Merchants (NAMM)
The National Association Music Merchants (NAMM) is a 117-year-old trade organization originating in 1901 . NAMM moved their headquarters from Chicago, IL to Carlsbad, CA in 1984 – the same year that MIDI was introduced at the NAMM show. MIDI, or Musical Instrument Digital Interface, is the digital music standard that describes communication protocols, digital interfaces, and electrical connectors that facilitate communication between electronic musical instruments, computers, and more . In short, MIDI has revolutionized electronic music artistry and business by bringing powerful music production to computers. It has democratized the ability to make music and reduced costs in production and delivery. Although there have been technological advances and innovation in the instruments themselves, NAMM has witnessed an evolution of innovation in the business side of the music instrument industry. With digital music, online commerce, and streaming, the landscape has rapidly evolved. The members of NAMM have demonstrated a nimbleness adapting their businesses to the changing economy . One thing that has stayed constant and continued to flourish is the passion for making music.
Another individual that provided important perspective concerning music instrument innovation was “Music Trades” editor Brian Majeski. Brian and his brother Paul are third generation entrepreneurs in the family-run business. Music Trades has been published continuously since 1890, and they have been tracking and reporting sales data to compile authoritative trends in the music instrument industry. 2018 editorial topics range from a perspective of the industry relative to the general economy, what was Hot at the NAMM Show , and the historic mathematical basis of musical pitch from Greek mathematician Pythagoras 2,500 years ago . They have also reported on innovations introduced at the shows and evolutions in the business. The May 2018 editorial discussed “how to improve your survival odds” using sound business tactics and attention on the balance sheet. The demise of several large players in the music instrument industry is less about the decline of brick-and-mortar retail and the rise of online commerce. The cautionary tale is more about excessive growth and too much leverage with an accumulation of debt that became untenable  and demonstrated recently by the bankruptcy (Chapter 11) announcement of Gibson. While new products and innovation are important drivers of growth in the market, a decent balance sheet can help navigate the uncertainty in the market place of increasing competition, improving quality, more technology options, and evolving online commerce.
One of the pioneers in combining analog and digital technology is Marcus Ryle, a co-founder of Line 6, a southern California based musical instrument company leading the analog to digital transition for guitars and gear. Marcus and his future business partner were working at Oberheim Electronics in the early 1980’s and lived through that pivotal period of collaboration between industry and academics that led to the digital music interface standard finalized in 1983 and introduced to the industry at the NAMM show in 1984. As the industry continued to evolve, this was regarded as a tectonic shift in the music instrument industry. Marcus left Oberheim in 1985 to start a product design and development consulting company. He consulted for many companies developing innovative new products. Immersed in numerous development efforts and launches for other companies, he started to see a whole new blue ocean strategy for the traditional music industry. In 1996, they founded “Line 6” to commercialize their own products starting with the world’s first digital modeling amplifier. They continued to launch innovative products including the Variax® guitar. As we discussed the nuances of design that elegantly solve problems, it was evident that he was an engaged inventor and designer. He also spoke with the respect of a wise sage as we discussed the relatively recent history of MIDI development. With an impressive track-record of developing, launching, and successfully commercializing music instruments, Line 6 was acquired by Yamaha Corporation in 2014. As one studies the strategic investments made by Yamaha in digital music and in academic programs such as Stanford University , the acquisition of Line 6 was a strategic and a commercial success. Yamaha through Line 6 has demonstrated a continued commitment to the guitarist market and uses internal metrics and social media analytics to assess improvements in customer satisfaction and enthusiasm for the brand .
Another example of innovation in the guitar segment of the musical instrument space is IP attorney, Jonathan Spangler. Spangler’s innovation started by following his own advice that he had given to Engineers and clients for decades: “If you experience a pain and see a need in the market, create the solution you want and patent it.” Spangler, a busy in-house legal executive who loved playing guitar and leading the company band, he experienced first-hand the pain points of traveling with his guitar: added hassle and cost of checking as baggage, risk of damage if checked, and (last, but not least) getting the “stink eye” from other travelers when taking up overhead bin space. He wanted a good looking, premium guitar that could be easily transported . Unsatisfied with the commercially available travel guitar options, he invented a novel folding guitar that fits in a backpack or carry-on bag. The challenge was that accomplishing this goal, required addressing the sanctity of the guitar neck. Working with an award-winning creative Engineer (and fellow band-mate), James Lee, the pair patented a guitar that achieved the design goals by including three concepts: 1) a hinged neck, 2) a translating truss rod which selectively locks and unlocks the hinge in the neck, and 3) a floating bridge that selectively detensions the strings so they can “follow the fold” for elegant string management not found in other solutions. Spangler founded Ciari Guitars in 2016 and has been a member of NAMM since 2017.
Like any other industry, music instrument companies need to innovate to survive in this constantly changing world. Fortunately, the music industry is replete with passionate people that will continue to collaborate and evolve to enrich the lives of people who love music. There are so many people around the world who derive inspiration or love or healing with music. It’s a rewarding place to be contributing to the making of magic and inspiring others to make the world better – through music and innovation.
 Byrne, David (2012): “How Music Works”, published by McSweeney’s Books, San Francisco, CA. ISBN: 978-1-936365-53-1
 Majeski, Brian (2018): “Editorial: What the Sales Data Doesn’t Show” and “The Music Industry Census”, Music Trades, April 2018.
 Drucker, Peter (2013): “The Discipline of Innovation”. Pg. 145 “HBR 10 Must Reads: On Innovation”. Original article published in May 1985.
 Davis, Andrea (2018): Musical Instrument Intellectual Property research study.
 Burrows, Terry (2017): “Guitar Family Trees”, published by New Burlington Books, London, UK. ISBN: 978-1-85762-429-1
 Levey, Jane Freundel (2001): NAMM 100th: A Century of Service to the Music Products Industry”.
 Majeski, Brian (2018): “Editorial: A “Glass Half Full” Assessment of the Industry”, Music Trades, January 2018; “Editorial: What was Hot at The NAMM Show”, Music Trades, March 2018; “Editorial: How to Improve your Survival Odds”, Music Trades, May 2018.
 Nelson, Andrew J. (2015): “The Sound of Innovation: Stanford and the Computer Music Revolution”, published by the MIT Press, Cambridge, MA. ISBN: 978-0-262-02876-9
About the author: G. Bryan Cornwall, PhD, PEng:
G. Bryan Cornwall, PhD, PEng (FW 2018) is a Rady Fellow and will complete his MBA at the UCSD Rady School of Mangement in 2018. He is currently an Associate Professor of Mechanical Engineering at the Shiley-Marcos School of Engineering at University of San Diego (USD) with research interests in biomechanics, biomaterials and musical instrument innovation. He is a co-founder of Ciari Guitars (https://ciariguitars.com/ ) with a financial investment in the start-up and has been a member of NAMM since 2017. Ciari Guitars went through the UCSD Rady School “StartR” accelerator from October 2016 thru April 2017. Ciari Guitars has recently been accepted in the “Project Music” accelerator with the Nashville Entrepreneur Center from April 2018 through January 2019.