New York City Market Profile

There’s no place on Earth like New York City. A stacked mash-up of countless cultures and massive economic forces crammed into a dense corner of the coast, the City That Never Sleeps offers an almost unending variety of opportunities for business. And as one of the world’s most important musical meccas, you can be sure that it’s home to a vast amount of MI business.

The capitol city of New York is the second-largest regional economy in the entire world, behind only Tokyo. It leads the global stock trading market and is a powerful headquarters for many of the most powerful media companies on the globe. But it’s the Big Apple’s arts and music scene that captures the imagination. It’s been the incubator for some of music’s most important innovators (Thelonious Monk, Sonny Rollins, Bob Dylan, the Ramones, the Beastie Boys, and Jay-Z barely even get you started). It’s home to some of the most revered venues in the world (Carnegie Hall, the Metropolitan Opera, Madison Square Garden) and is home base to incredible recording studios like Electric Lady, MSR, Platinum Sound, and Avatar. The world’s most famous house bands – Paul Shaffer’s “The World’s Most Dangerous Band” and the Roots – clock in here every day. And, of course, it’s a test lab for tens of thousands of musician hopefuls playing every genre imaginable in rock bars, jazz lounges, converted warehouses, and even their own little apartments – all forming the foundation of this sprawling regional music economy. MMR reached out to friends throughout the area to piece together a current picture of this one-of-a-kind market.

MAIN DRAG MUSIC

330 Wythe Ave., Brooklyn

Karl Myers

Founder and President

Located a little off of Williamsburg’s original hipster main drag, Bedford Ave., Main Drag Music has quickly established itself as one of the city’s essential independent music stores. The staff are experts in vintage and new guitars, synths, and drums, and host a great collection of boutique pedals.

What are the financial challenges of operating a retail store in New York City?

Real estate values have driven taxes through the roof, which in turn drives rent. Commercial landlords are often taxed at a rate based on estimated market value as high as $50/sqft. You have to sell a lot of guitar strings just to make rent. Labor, of course, is also very expensive.

What are the cultural advantages?

New York City is one of the cultural capitals of the world, and definitely of the United States, so there is a sizable market for almost every niche imaginable. This allows creative retailers to follow what they’re passionate about.

Brooklyn has changed drastically in recent years. What has that meant for your business in recent years?

We have seen a huge increase in international clients. What’s great is that they are still the kind of musicians we’ve always served, just from farther away. Because of this, we’ve been able to maintain or identity while improving and increasing the scope of what we offer.

Who is the typical NYC consumer?

I don’t know that I’m qualified to comment on what the typical consumer in NYC is like. I can tell you our local clientelle are die-hard music lovers who span the range from sanitation worker to MSG headliner. Some are native, some are transplants – every type of person imaginable!

GUITAR CENTER

25 W 14^th Street, Manhattan;

139 Flatbush Ave, Brooklyn

Christopher Bennett

VP of Communications & Corporate Affairs

The biggest MI chain in the world needs no introduction, but it is worth noting that GC has leveraged great locations in Manhattan and Brooklyn (not to mention the imminent arrival of a new Times Square store) to create one-of-a-kind event and product demo hubs with big-name musicians, establishing a unique connection to the city.

What are the financial challenges of operating a retail store in New York City?

The costs of real estate and staying in operation are obviously higher in NYC, so we account for those financial considerations. Moving beyond that, it’s about creating and keeping a loyal customer base, just like anywhere. Of course, New York is an extremely competitive market, and everyone is always looking for the best price and a “deal.”

How have you managed to set yourself apart in this market?

New York is made up of neighborhoods that might lean towards a particular genre of music. For instance, our Brooklyn store has a significant sector of its clientele from the hip-hop and EDM communities. We partnered with global Digital Music technology brand Serato to open an exclusive 2,500-square-foot in-store space offering a permanent home for DJs and aspiring music producers to demo and buy the latest products in Serato’s product line. This has been such a huge success, we followed it with opening up a similar setup at our Hollywood location.

The landscape of New York City is constantly changing – what has that meant for your business in recent years?

The New York market has been very good for us the past few years. As you know, we are on the eve of opening a new flagship location in the Times Square area. With the closing of many MI retail locations on the legendary 48th street, we feel our Times Square store will allow us not only to fill this void and service the midtown area, but also to expose the thousands of area visitors to making music and playing a musical instrument in whatever market they call home.

ELECTRO-HARMONIX

55-01 2nd Street, Long Island City

Mike Matthews

Founder and President

One of the most influential effects companies of all time got its start in New York City when an IBM salesman who was into rock’n’roll started distributing a fuzz pedal and a power boost pedal in 1968. Now an international force, Mike Matthews’ Electro-Harmonix operates out of a new headquarters in Queens and continues releasing groundbreaking pedals like the brand new B9 Organ Machine, which convincingly transforms guitar signals into a variety of classic organ tones.

How’s the new location in Long Island City?

We’ve got a really big place – 89,000 square feet and plenty of room to expand. It’s very comfortable and we love it. We have a huge parking lot, so anyone can drive to work but also play soccer during lunch breaks. The advantage of being in New York is that the city just has the biggest pool of labor and professionals that you could possibly ask for, probably in the world. Whenever we need somebody, we can add the right people promptly. Especially being in Queens, where we don’t have the crowd of Manhattan, where I used to be for years. With the subway system, we have people who can get here from the Bronx, Manhattan, Brooklyn, and beyond. Even the Long Island Railroad stops a half a block from the factory. It’s a tremendous advantage _ even though the taxes in New York are terribly high, the people are the key.

What operations happen in the Long Island City location?

We do all our final assembly here. We buy parts – chassis, printed circuit boards, jacks, and so on – from all over, but we do all the final assembly here. Doing that means quality control. If you run into a problem, you can solve it right away. Everything we assemble is immediately tested on the oscilloscopes. Once it’s tested, it’s sealed and then tested again with guitar. If there are any rejects, we know about them right away and can fix them right away. If they’re assembled somewhere else, who knows what’s happening.

Any new directions for Electro-Harmonix?

The B9 is taking off. In the first 36 hours that the demo video was up on YouTube, we had 86,000 views, which is amazing. We already have a very hot product that we’re having difficulty keeping up with production – the Soul Food pedal, which is our version of the KLON Centaur. We sell thousands a month. But now the B9 is just taking off. It just has tremendous potential. It’s a monster.

SAM ASH MUSIC STORES

333 W 34^th Street, Manhattan

Sammy Ash

COO

Long a mainstay on the Midtown retail scene, Sam Ash’s New York location offers a dizzying variety of instruments from every corner of the world and serves an audience that is truly international.

What makes NYC different than any other market?

We have been a known quantity in Manhattan since 1970. Our European and South American customers have sought us out even though we have moved. We have had a lot of great in-store clinics and meet and greets. We hosted the Rock and Roll Fantasy camp kickoff party, clinics with Donavan, Mark Tremonti, Billy Sheehan, Gibson Custom Shops (all three at one time).

How have you managed to set yourself apart in this market?

We sell everything from bagpipes to authentic African and Latin percussion, herald trumpets, and of course the components that no one else does, full sheet music (most ethnic titles are in stock) in every style of brass, woodwinds, and orchestral. Our used and vintage sales are quite healthy and brisk.

Second would be the family and the staff who represent us in NYC. The guy who runs the outfit is Ian Goldrich, who has been serving the Manhattan and International market for over 40 years, first with Manny’s and now with us for over 15 years.

The landscape of New York City is constantly changing, in terms of economy, real estate, culture, and more. What has that meant for your business in recent years?

Huge changes. There are no more frequent $100,000 studio deals, there’s new competition keeping us on our toes, making sure that we have individuals on staff who have specific language skills, and we’ve increased our service department since we see that people are keeping their instruments longer. Another significant change is the increase of electronic percussion – 99.9 percent of all Manhattanites live in an apartment and landlords do not allow the sound of an acoustic drum set. Also we sell in inordinate amount of headphones, compared to any other location.

In terms of economy, you really can’t be very poor to live in a city where the average apartment cost is now over a million dollars, so we see people starting to spend again and many who are no longer embarrassed to show us the money.

MATT UMANOV

273 Bleecker Street, Manhattan

Matt Umanov, Owner

Matt Umanov Guitars has evolved into a destination storefront and repair shop since its opening in 1965. Steadfastly focused on “guitars, and only guitars,” this vintage powerhouse has built a reputation for honest sales and unmatched service.

What makes NYC different than any other market?

Having been considered by many to be the crossroads of the business and the cultural world since the start of the industrial revolution in the early 19th century, we have at this point over 50 million visitors a year coming to New York. They are comprised of residents, business people, and tourists from as near as South Brooklyn and as far as South Africa, every single day, and a heck of a lot of them have a lot of shopping to do.

What are the financial challenges of operating a retail store in New York City?

Higher operating costs than in most other places in America; huge commercial rent in high-traffic areas, insurance of all types, myriad government fees – the list goes on.

What are the cultural advantages?

The enormous ethnic diversity, the music, the shows, the museums, the restaurants – more of it than anyone can possibly take in. It’s a cultural paradise.

How have you managed to set yourself apart in this market?

We have a reputation for only having the very best of every category of fretted instruments, both new and old, and have what has been considered to be the finest in-house guitar repair and restoration service in New York since the 1960s. The combination is a winner, both for casual musicians and for professional musicians.

LOOG GUITARS

119 W 72nd St. #335, Manhattan

Rafael Atijas

Founder

Growing out of founder Rafael Atijas’ thesis at NYU, the Loog is a three-stringed instrument that consumers put together themselves using only a screwdriver. The company, launched in 2011, is unveiling the first Electric Loog Guitar at this year’s Summer NAMM, as well as a few secret surprises in store for this fall.

Loog is a pretty fresh company, but you’re still pushing forward with new products. What are you looking forward to in the second half of 2014?

Right by the time of Summer NAMM, we’ll be delivering our first line of Electric Loog Guitars, which we launched through Kickstarter last November. We are super excited about this and we can’t wait for all the people and distributors who pre-ordered to have them in their hands. So, we are looking forward to the second semester when we’ll have our complete line of acoustic and electric guitars in stock for the holiday season.

What makes doing business as a supplier in NYC different?

One thing I really like about NYC – and one that people who never came here might be surprised to learn – is that not everything is as big-scaled as you could suppose. We still have mom and pop shops and stores that have been around forever, still managed by the same families. I love being able to walk into these stores and speak directly to the owners. Some are big, some are small, but we feel we are all together trying to make it.

How important is your geography to the identity of your brand?

Our products were born in NYC and therefore I feel that this is their natural place. I am constantly inspired by the city and all the beauty, the energy, and the opportunities that seem to appear at every corner. For instance, a few weeks ago our guitars were selected to be at the MoMA Design Stores; we take that as a huge accomplishment and with great pride because we feel the MoMA is so NYC.

PEEKAMOOSE GUITARS

251 West 30th St, Manhattan

Paul Schwartz

Owner/Master Luthier

The custom guitar and repair company Peekamoose has been around since 1983, building a reputation for classic American-style guitars and custom modifications. They’ve already released the brand new Model V guitar this year (a classy Les Paul-style axe) and are set to introduce a Model VI later this fall.

What makes doing business as a supplier in NYC different?

You are dealing with a very diverse client base. Lots of very different musical styles, instrument setups, personal preferences. But also we don’t just do business in NYC – we have clients on almost every land mass except the polar caps.

How important is your geography to the identity of your brand? Does it change how you’re perceived or how you market yourself?

The fact that we are a U.S. guitar manufacturing company matters. The fact that we are in NYC, I think in the large picture, is irrelevant. What matters most is how great our product line is.

The guitar market has undergone several changes since Peekamoose began. How has the company evolved?

The technology has advanced and so has the end user’s expectation of what an instrument should deliver in terms of performance and value. We have had to adapt as best we can to the trends in the market without sacrificing our identity and what we know is important when sending an instrument out the door. Our key issues are responsiveness, ease of play, accuracy, dependability, creating highly adaptive instruments which can deliver the goods for any style of music a musician wants to explore.

AGUILAR AMPLIFICATION

599 Broadway, Manhattan

Dave Boonshoft

President

Lifelong bassist Dave Boonshoft leads Aguilar Amplification, which manufactures all its electronics on the corner of Houston and Broadway in Manhattan and runs a unique Artist Loft in Chelsea.

What’s new with Aguilar this year?

We’ve expanded our pickup line to offer different sizes and different styles of pickups from P-Bass and Jazz Bass pickups to hum-cancelling soap bars, all for four, five, and six-string basses. We also have an OEM division, working with companies like ESP, Fodera, Roscoe Basses, Spector Basses, and F Basses. Also coming up in the next few months, we’re going to have some new pedals.

How is the Aguilar Artist Loft used?

Not only can we do clinics and masterclasses there, we also have a full video and photo studio. The other half is a completely floated and tuned room. You can get about 60 people in there for clinics and the room sounds great.

You’re from the Midwest _ how do you operate in the big city atmosphere?

The energy is tremendous. It can invigorate you and it can slap you in the head, too. Whether you’re trying to get home through traffic or any number of things. It does make you want to wake up in the morning and do something today. There’s no slow attitude or, “We’ll get it done next week.”

How have the city’s financial challenges affected Aguilar’s business?

We used to sort of operate as a craft shop, but now we use what’s called the “Toyota Production System,” where we’ve learned to do single-piece flow manufacturing so things become more and more efficient. So in a sense, you could say that the fact that it’s more expensive in New York City has been the impetus for us to make sure our manufacturing processes are really good.