DJ & PA Lead the Charge Amid Industry-Wide Softness in MI
Executive Summary
The U.S. Musical Instrument (MI) industry closed 2024 with a third consecutive year of contraction, declining 2.1% year-over-year. While a slight improvement over 2023’s 2.9% decline, this continued softness highlights persistent structural challenges. Chief among them are shifting consumer behavior, inflation-driven price sensitivity, margin compression, and renewed instability from U.S. tariffs on imported goods.
The MI market has now cumulatively contracted more than 7% since 2021. Longstanding legacy categories like pianos, acoustic guitars, and recording gear are in decline, while a new performance-centric core, centered on DJ and live sound, is gaining strength. Live Sound is now on par with Guitars in market size, marking a historic shift in how consumers engage with musical tools.
The market continues to bifurcate. Premium and specialized segments are proving resilient, while the middle of the market, especially mass-market acoustic and keyboard instruments, struggles to justify its place. Entry-level products face dual threats: tariff exposure and relentless DTC pricing pressure, eroding traditional channel economics.
Yet, there is reason for measured optimism. Younger generations of creators, performers, and learners are actively engaging in music in new formats, and some high-margin categories are seeing targeted growth. For manufacturers and brand owners, this environment calls for focus, adaptation, and operational discipline. Companies that rethink their product mix and innovation approach, invest in channel agility, and build with the customer’s needs as their north star, will be positioned into the next era of MI.
Note: this analysis is of United States consumer retail including e-commerce and direct-to-consumer sales, and it excludes cinema, tour, broadcast, and installation/integrators.
Market Context
Despite pandemic-era surges in 2020 and 2021, the MI market has now contracted cumulatively by over 7% in three years (2.3% in 2022, 2.9% in 2023, and 2.1% in 2024). Normalization of consumer spending on hobbies, declines in certain home-based and hobby segments, and macroeconomic uncertainty have collectively cooled demand.
The recent reimplementation of tariffs by the U.S. government, particularly impacting Chinese-made and other imported products, has introduced cost and sourcing instability. NAMM and other trade associations have voiced strong concerns, emphasizing how this disproportionately affects U.S.-based small and mid-sized MI companies. However, as of April 9, 2025, a partial retreat from the broader tariff escalation offers hope that the policy environment could become less volatile.
Performance by Segment
Macro Segments
Acoustic — $3.6B, -5.5%
Audio — $2.5B, +0.3%
Electronic — $1.3B, +1.7%
Product Segments
Live Sound & Production — $1.8B, +1.8%
Guitars — $1.8B, -5.6%
Band, Orchestra, and Institutions — $1.2B, +0.4%
Accessories — $927M, -0.3%
Electronic Instruments and Effects — $851M, +1.1%
Recording — $700M, -3.2%
Drums and Percussion — $335M, -2.5%
DJ — $314M, +11.6%
Pianos — $314M, -24.4%
Consumer Music — $137M, -12.8%
Observations
From the Top: Live Sound is roughly even with Guitars. The industry continues to evolve from being led by pianos to guitars to production systems.
Guitars: electrics and ukeleles posted growth, but this was overwhelmed by a sharp decline in acoustics.
DJ: the only double-digit growth segment, driven by strong sales in controllers and mixers; turntables continued their slow decline.
Pianos and Keyboards: collapse in traditional keyboard categories, with upright and grand pianos suffering double-digit losses. Player pianos continued their descent into obsolescence. Even synthesizers and keyboard controllers saw sharp contraction. Only portable keyboards above $199 and digital pianos showed opportunities in a declining segment.
Live Sound vs. Recording: Live Sound was a bright spot, with self-contained PA systems, mixers, loudspeakers, and power amps all contributing. In contrast, Recording fell across the board. Hardware, software, and even plug-ins and soundware (virtual instruments, samples, and loops) saw negative movement.
Electronic Instruments and Effects: a mixed performance with electronic drums and drum machines (Akai Pro MPCs, for example) up modestly, but with synths, controllers, and processors all in decline.
Band & Orchestra: a stable segment, buoyed by modest growth in brass and woodwinds, offsetting a decline in strings.
Drums & Percussion: broad-based, multi-year contraction continued, though drumheads bucked the trend with a tiny sales gain.
Category Leaders and Laggards
Top-Growing Product Categories
DJ Controllers, Institutional Organs, Self-Contained PA Systems, Mixers, Portable Keyboards >$199, Digital Pianos, Power Amplifiers, Effects Pedals, Electric Guitars, and Loudspeakers.
Largest Declines
Portable Keyboards <$199, Upright, Grand, and Player Pianos, Acoustic Guitars, Karaoke Machines, Instrument Amplifiers, Keyboard Controllers, Recording Software and Interfaces, Plugins, Soundware, Loops.
Market Structure
The top 20 product categories generate 80% of MI revenue. The other 30 produce 20%.
Electric and Acoustic Guitars, Accessories, Wired Microphones, and Print Music are the top five, accounting for about 30% of the market.
The lack of meaningful innovation that has resonated with customers among these key product categories, coupled with the significant inventory in the secondhand market, creates downward pressure on pricing, limiting profit capabilities of the industry. To say that another way, the industry must adapt its innovation model to become vastly more customer-centric or further contraction is a certainty.
The MI market is undergoing structural bifurcation. Premium and specialized segments are proving resilient, supported by differentiated value and brand equity. Mid-tier products and legacy categories are being squeezed out, caught between commoditized entry-level offerings and a shrinking base of price-sensitive consumers. Entry-level products face intensifying margin pressure from both tariff exposure and direct-to-consumer disruption, challenging traditional channel unit economics and forcing operators to reevaluate product and brand positioning as well as sourcing strategies.
Strategic Considerations for Operators
Evaluate whether you are sufficiently exposed to Live Sound and DJ.
Expect further tariff volatility and consider scenario planning.
Rethink your innovation approach, placing unmet customer needs at the center.
Experiment with channel strategy. It’s more nuanced than dealers vs. direct.
Invest in meaningful differentiation via design, UX, and brand.
Draw down or exit declining categories proactively.
Consider localizing supply chains, perhaps in partnership or consortium.
Outlook and Answers
The MI industry is in a transitional phase. We’ve squarely exited the high-growth phase and clearly entered maturity. And that’s not all bad. But different.
Structural demand is shifting, not disappearing. It’s driven by new generations of creators, performers, and learners. Operators should prepare for a cautious remained of the year as tariff impacts ripple through supply chains. Inflation- and uncertainty-weary consumers will remain selective. Any meaningful rebound will likely depend on stabilization in trade policy and successfully targeted product offerings that align with specific customer use cases.
To capitalize in the current environment, MI brands must invest in agility, data- and customer-centricity, and go-to-market adaptability. Operating based on outdated and insular assumptions and conventions and a losing bet.
How can we grow if the total market is shrinking?
By focusing on share gain, premiumization, and serving overlooked customer segments or use cases. Growth is available, but it’s not everywhere.
Should we go DTC or double down on dealer partnerships?
It’s not either/or. Success lies in a hybrid, channel-smart approach that protects your brand while improving margins and customer reach.
Are tariffs a short-term blip or a long-term structural issue?
Assume volatility. Build flexibility into your sourcing and pricing strategy to avoid being overly exposed to geopolitical shifts.
How do we know where to innovate next?
Start with unmet needs, not tech trends. Talk to customers, study product usage, and test value propositions before developing new products.
What’s the right level of investment in new categories like DJ or live sound?
Use a disciplined test-and-learn model: validate demand signals, understand the competition, and test- or soft-launch before scaling.
What does a successful MI brand look like in three years?
Customer-obsessed, digitally fluent, supply chain-resilient, and deeply serving its niche with products consumers can’t imagine living without.
The Help You Need with Strategy and Execution
If you’re an owner, executive, or operator of a musical instrument brand and this report resonates, you’re not alone—and you don’t need to navigate these transitions alone. I offer strategic consulting and fractional leadership to help your MI brand:
Reposition its portfolio for growth and profitability
Build direct-to-consumer capabilities that complement your dealer and distributor channel
Innovate with purpose, centered on customer needs
Navigate tariff, sourcing, and pricing strategy in a volatile trade environment
Create high-leverage, cross-functional operating plans that drive outcomes, not just activity
Whether you’re looking to evolve a legacy brand, build a roadmap for your next phase of growth, or simply make better, faster, more aligned decisions, I can help.
Let’s talk about where your business is headed and how to get it there. Reach out here to schedule a discovery call.