Steinway’s New Owners Invest For The Long Term
...the $512 million transaction last September 19, he said, “Over the last 160 years, Steinway has built an unprecedented reputation for excellence. We will uphold that tradition with the continued uncompromising pursuit of perfection.”
At this June’s dealer meeting, it was clear Paulson had backed up his words—with investments in technology, manufacturing, and marketing that promise an even brighter future for the storied piano maker. Dealers were greeted by breathtaking panoramic views of New York City from the 42nd floor of the Le Parker Meridien hotel at the opening of the meeting June 19, setting the tone for an uplifting two-day event that concluded with tours of the Astoria factory. “2013 was a great year for Steinway & Sons, with sales rising 10%, largely led by big increases in North America,” declared Michael Sweeney, C.E.O., president Steinway Musical Instruments. “That growth not only continues into 2014 but has accelerated, with sales gains hitting 16% for the first six months. We could not be more pleased with our results and our future prospects.”
For the last two years, Steinway management has hinted at the need to tap into the player piano market with a proprietary system that would accurately reproduce the touch of the finest artists while expressing the true tonal brilliance of a Steinway piano. At the meeting, the company revealed a prototype of a system developed jointly with player piano pioneer Wayne Stahnke. Stahnke, who is credited as the inventor of the modern solenoid player piano, has developed a new system with Steinway that in the demonstration at the meeting showed remarkable accuracy in recording and playback , as well as a soft-pedal shift mechanism. Stanislav Khristenko’s demonstration of the record and playback capabilities left no doubt that Steinway has developed a very serious piece of hardware. “I listened and watched for dropped notes and changes in the subtlety of the playback but could not find any,” said Paul Murphy, M. Steinert & Sons. “What we saw today is a remarkable system.” For users interested in a library of music, Steinway’s new system will link with much of the vast content held by its digital music delivery division, ArkivMusic. As a division of Steinway Musical Instruments, ArkivMusic specializes in the efficient delivery of the broadest selection of classical music titles in the U.S., direct to the consumer. There are currently more than 120,000 CD, DVD, SACD, Blu-ray Disc, and 320-kbps MP3 titles in the ArkivMusic database. In addition, ArkivMusic has more than 10,000 titles in its ArkivCD reissue program. These are recordings that have previously been out of print or otherwise unavailable. “Our goal is to marry technology with Steinway to both expand the market and drive our business forward while maintaining the legacy of our company,” said Steinway’s Eric Feidner, vice president of technology.
From a surge in leads generated through Steinway’s website to a record number of schools purchasing Steinway pianos, the meeting was filled with positive news that helps explains the company’s strong results over the last 18 months. “Our most promising news rests with all the new dealers who have shown their confidence in Steinway and invested in our brand with showrooms and products,” stated Ron Losby, president, Steinway & Sons - Americas. Losby went on to introduce representatives from the seven most recent additions to the Steinway dealer family: Michelle’s Pianos, Portland, Oregon; Artist Pianos, Latham, New York; Steinway Piano Gallery - Charlotte, North Carolina; Shirk’s Piano Gallery, Mishawaka, Indiana; Black Hills Piano Gallery, Rapid City, South Dakota; and Music Hall, Asunción, Paraguay.
With the same focus it’s brought to helping its dealer network expand piano sales to colleges, Steinway is now offering a marketing strategy to increase sales to houses of worship, K-12 schools, and a wide array of hotel and restaurant buyers. “By any measure, the market for acoustic pianos with these segments is vast,” said Todd Sanders, Steinway’s vice president of sales and marketing. “And just like the college market, these are not markets that will respond well without a lot of hard and very focused work.”
Tapping New Markets
But according to Steinway-commissioned research, untapped demand does not rest solely with institutional buyers. New Chief Marketing Officer Darren Marshall, who joined Steinway & Sons after careers with both Pepsi and Coca-Cola, spoke at the meeting to present the report’s key findings, highlighting substantial pockets of demand that could accrue to Steinway dealers. This research, available only to Steinway dealers, will act as a blueprint for the company’s future marketing and store design concepts.
After meetings at Le Parker Meridien hotel in Manhattan, dealers were transported to the Steinway factory in Astoria, where they spent the afternoon touring the plant. “For 30 years I have been making annual trips to the plant, and it has never looked better,” said Danny Saliba, Steinway Hall - Dallas, Ft. Worth, Plano, Texas. “Every remark or suggestion we have about landed quality gets addressed. Today, we receive pianos that come out of the crate and can go straight to the concert stage.” As Bill Metcalfe, Steinway Piano Gallery of Nashville, added, “What a great dealer meeting, and to end it at the factory is just fantastic. When you see the energy and enthusiasm of the Steinway team and the organization of the factory, you know this company has a great future.”
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