Piano Market: Did You Know?
As Finance Manager here at BLP, I get a unique peek into the world of piano finance. The piano industry is not a prominent feature of financial markets, but I’ve learned some interesting facts that you may not know:
- Hailun is one of the only piano companies that is publicly traded. When Hailun Chen founded the company it was co-owned by the Chinese government, but he gradually bought out their stake and attained full control of the company. In 2012, the company completed a $58 million initial public offering on the Shenzhen stock exchange.
- Steinway Musical Instruments was publicly traded from 1996-2013 before being bought by a private equity firm for $438 million. The unique part about Steinway’s stock was their stock symbol: LVB, a tribute to Ludwig van Beethoven.
- In 1920, approximately 70% of all pianos contained a player system. Player piano sales peaked in 1924, but advancements in radio and recordings and the stock market crash of 1929 virtually ceased sales. However, the technology did not go to waste as an inventor named Edwin Albert Link adapted it for the pneumatic system of his “Link Trainer” flight simulator. Link’s simulator is considered an engineering landmark and was used by almost every nation in World War II. You can see some of these vintage player pianos in our gallery.
- The piano market typically responds disproportionately to swings in the economy. Because piano sales heavily depend on consumer disposable income and the economic health of educational institutions and businesses, piano sales are subject to exaggerated volatility. The piano market is also heavily tied to the housing market. As new homes are built and purchased, pianos are often included in new furnishings. One of the few exceptions to this trend was the housing bubble of the late 2000’s. The housing market was inflated by subprime mortgages and the correlating low credit of consumers and high mortgage payments did not result in new lines of credit or additional disposable income for purchases like pianos.
- In 2013, a visual arts company created an audio representation of the S&P 500’s performance for CNN Money. Even though the sound is created by a keyboard, organ, and guitar, and doesn’t feature an acoustic piano, it’s still cool enough to warrant a mention (though they did create an an audiographic of the Dow Jones in 2010 with an acoustic piano but it has since been deleted). You can watch the video below.
— Finance Manager Will Cutler