Talking Heads – MIN interviews leading figures from the MI industry to find out what’s on their minds.
MIN’s editor, Gary Cooper, speaks with Mark Gooday, one of the driving forces behind the powerhouse that was Trace Elliot and the founder and MD of Ashdown Engineering. In a frank and revealing interview Gooday talks about the current state of MI generally, the backline market in particular, why he has branched out into consumer electronics and why he thinks retailers are now better at their jobs than most manufacturers or distributors!
Mark Gooday isn’t just a gifted electronics designer. He has a design flair that extends beyond the circuit boards in his Ashdown amps and the other products with which he has been involved over the years. Gooday’s products don’t just sound good, they look good too and that matters a great deal as every retailer knows. Where other British MI products have sometimes performed well but somehow looked ‘wrong’ Ashdown gear has always looked world class and that has helped propel it to international success few other UK brands have achieved in recent decades.
Gooday has other qualities, too. He is a skilled businessman and an astute observer of the trade, which is one of the reasons Ashdown is still with us. He also understands the value of relationships and has had close friendships with many of his products users. A lot of companies in the music industry like to use the word ‘family’ but Ashdown has a better claim to it than most.
What makes him an ideal subject for MIN’s Talking Heads series, however, is that Mark Gooday has the reputation for ‘telling it like it is’. Ask him an awkward question and you will get a very frank answer – and there are some pretty frank responses here! That seems a good way to start what promises to be a very entertaining year.
GC: Would you give us a brief overview of how things in the industry look to you today, please?
MG: It would seem we have a few amazing retailers, globally, and the same with manufacturers. The risk is very high for small brands because of the reliance on powerful stores around the world. That said, there are too many brands, and many of them are losing money. Some are venture capital funded and prices/margins/profits seem to matter less to them than growth. Growth is nice if done correctly, otherwise it just hurts a market.
For us, we reduced overheads by 60% over the past five years. Control of our overheads is easier to achieve than control of your sales margins today, due to the sheer number of amp companies in the market.
GC: Why are there so many players in the market? What has been happening?
MG: This has come about because you can buy so much off the shelf or get it made. Then that comes onto who is making what. It’s not the brand in most cases. In fact there are very few companies in the UK/EU/USA who make anything – most products from the big names are built in multi-brand factories, and that’s not very clever in what we know is a declining market.
GC: Off the record you’ve mentioned that compliance is a problem and that not everyone is playing the game. Would you elaborate on that, please?
MG: The cost to make product and be legal is high and the policing in the UK is particularly weak. It is a very costly and complex nightmare globally and when add to this Weee, Rohs, Fcc, EMC, etc etc every single product costs a small fortune to make legally. I know from our unit sales and see what is in stores, and it seems to me that some companies simply cannot afford to be meeting the full compliance requirements. But, hey I may be wrong and just being a bitter old bugger, having been building amps for 35 years. <laughs> .
GC: The backline market in particular has suffered in recent years, with many musicians using smaller amps, or going direct with effects through the PA and so on. How much has Ashdown been affected by this? Have you any feel for the size of overall market reduction (ie not just as it affects Ashdown).
MG: Oversupply and Apple, have killed the industry. Have you seen the MI sales tracker reports on USA sales? I have and from 2006 to 2015, wow! Guitar and bass amp sales (bass amps sales in particular) are down over 50 % globally and we are no different and are down a long way as well.
Players going direct, using modelling amps, pedals, using no backline (like U2 although it is actually there – it’s just all hidden under the stage) these have all had an effect. Against that, we are finding our big UK-made valve amps are selling more, and our high end Direct box/DI pedals are as well, but the core, mid-range business is tough. Again much of that is down to the big boys and companies selling at a loss to show growth for investors, dropping the market prices.
Everyone thinks ‘Oh, let’s make bass amps – cheap ones and sell millions. well, good luck with that! Fender did an amazing job with the Rumble line, they were light, a brand name and good, and they bypass the normal distribution route as they are direct, so prices were incredible. We can actually compete as we have next to no overheads and are focused (most of the time!). As a small, 21 year old family company where no one earns big money, we can adapt to the changes and do so faster than most, so we survive. In fact we can, if we want, undercut most people on prices but then we would be being as bad as the big boys, if we did.
GC: beside the launch of Meters headphones, which we’ll come to later, how has Ashdown responded to this market change with its product development? Have you, for example, offered fewer more expensive products, or more towards the beginner market?
MG: We have gone up-market. We have reduced our overall offering worldwide because no one wants to hold inventory (stock in English). With a big range it is so hard financially for importers / retailers to hold correct models.
As for the products themselves, the market has moved to smaller, lighter amps which are often not as good but hey, it’s a trend. These smaller, lighter products have come a long way and we did make the first Class D, the first Neo. There was a lot of smoke and mirrors stuff going on in the amp market in the early days with claims of 250 Watt output from amps that were actually delivering 75 Watts – if you were lucky!
A lot of factors played into that. Marketing won and there was no agreed power rating ruling. Lack of user knowledge has not helped either, and we’re going to be trying to put that right on our new website, which goes live after NAMM.
GC: what’s the current position with Hayden, your guitar amp line?
We are selling it as a high-end product, sold direct and custom tuned here when you visit, so you walk away with the amp you tuned.
However this is a very interesting point. We rebranded our guitar amps due to pressure and we also made our pedals under the Dr Green brand … not Ashdown. In hindsight, this was a mistake. Too many names to grow into brands and no one really needs more brands, as I say myself. When we look at our higher turnover years, over 30% of our sales were guitar amps, so shot ourselves in the foot here, albeit for what we thought was good reason. We wanted to keep Ashdown as a bass brand – simple, but the interesting thing is we sold guitar amps globally as Ashdown. As a consequence at this next NAMM you will see Ashdown Fallen Angel guitar amps again. the same was true of Dr Green. These will all be tweaked, they’ll be cooler and they’ll all be Ashdown in 2018, making it a single brand focus across backline markets worldwide. But before you even ask, we will not be playing with PA. I did that at Trace Elliot and we spent more time and money on PA than anything. FAIL! It’s not what we know.
GC: OK, so there are too many brands, some of them are selling pretty questionable products and not even making proper profits. Presumably, the logical result has to be be a thinning out process. Do you see this happening?
MG: It will come with natural wastage as we have seen in retail worldwide. The lack of margin, the legalities, if properly adhered to, will all thin-out the backline market.
In that market, you will always have great little guys building amps and selling niche, however many of these should not be doing it and the dealers and importers really have to take care as to what are really fully legal and this is hard indeed. At the last Bass show in London, they had 11 bass amp companies. I know them all, and without Fender, Ampeg or ourselves, where are they actually selling? We visit most stores and it bemuses us. Yes, the niche stores support them as we are seen as a brand that is everywhere and not niche, so stores, importers, direct sales worldwide have a place and everyone likes to have “the new sound but – well, it’s just too many brands.
Having said that, can I just offer my heartfelt commiserations for Richard Ruse and his family, a great guy and friend? (Ed’s note: Richard Ruse, the founder of Trickfish amplification died in December, following a short illness).
GC: We do need to talk about your new Meters headphones, which seem, to have created a bit of a stir. Did you do the design and have them manufactured to your specs? How do you distribute and sell them?
MG: With backline looking like a decreasing market globally and our VU as our trade mark, it was something I wanted to do five years ago. We designed them here, in house, machined alloy dummies, then 3D printed models and had local custom paint shops (cars, of course!) paint them to look real. Then we began a hunt globally for the right factory. We found another family business and worked with them for a year to get it right.
The BIG cost has been IP protection, patents, approvals globally. Bluetooth BQB, battery and more cost huge money, mainly because we have used new tech, which no one else has used, so we have to pay. Bluetooth per product is $57,000 and then there are annual fees, so this has been a massive investment.
We have focused on the consumer side of things, not MI to start off, but in 2018 we will offer the line to MI as well as we all need this crossover today and spin-off markets towards music playing.
Let’s face it, a massive amount of the bass heard on albums worldwide has a Trace or Ashdown bass amp on them, so with a huge amount of work we have produced a great sounding line of headphones to match, with the help of U2’s Adam Clayton. Producers and stars alike are saying how good they sound and, yes, we get the ‘VU is a gimmick’ comment, but it is our trade mark image and it does measure to EU hearing standards, so you can watch your kids for safety. But yes, it looks cool. Hey, when you are in a flash car you can’t see yourself, you just feel unique and cool – this is the same!
We have a massive distributor here in the UK which is a first for me. They may be too big, as we still have to build the brand, and we have distributors now in 50 plus countries with the USA being the one we have not yet touched.
The amazing thing – and it’s relevant to the changing way of working and selling – is that our own website is outselling our UK distributor and at much higher prices than Amazon etc. so it is not all about the price – it is about the image, support and communication.
We have had amazing press, reviews, support, new advertising (where the hell do you do this today other than social media?) but cracking the consumer big boys is going to be hard, we know that, so we will put our own product manager on the road in January after the CES show in Vegas and with NAMM closely following after. It’s going to be a hell of a month!
GC: Has entering a consumer mass market changed your feelings about the MI business and the way it works?
MG: Yes. It has dawned on me that our MI business is way more professional globally today. Retailers in particular have really stepped up, either in bricks and mortar or web sales – they are in another league and sadly most distributors and manufacturers have a lot to learn and sort out for the future. Only a few manufactures are really in the same league as top retailers today and I would say no distributors do a job to the level they need to in each market. They have become more like fulfilment centres, leaving the rest to the manufacturers who need to step up to the game, which I think we are going to be showing later this month.
GC: Ashdown is a relatively small, British company in a market dominated by giant US and Japanese companies. Do you feel the odds have been stacked against companies like yours and, if so, in what ways? What could the UK government do to help small British manufacturers?
MG: I have met with the DTI for about 12 hours over the past months. The red tape is mad (other than with the MIA) and we missed-out on support at CES simply due to the time it takes to go through the whole process. I have to get it approved before I book a flight for instance, well you know they will only hold a flight for a couple of days, the same with a booth at CES, and you have to pay. By the time the DTI replied it was too late, so we had to pay and hence received no grant. It’s not easy but we are working closer daily and the support is now coming – more so in tech/web and social media than financial, so I think they are doing OK.
The odds are not stacked against us for the EU, however I often struggle with our company being sort of minimalised in UK magazines, who you would think would be proud of us. Maybe we need to spend more on ads?
The USA is where we find amazingly closed doors – some dealers actively say ‘we only sell USA made products’. So we set up with another company and made cabs in the USA and sent electronics over, put a UK/star spangled banner half and half badge on and gave it a go. And, no it didn’t work!
Then, the biggest mags in the world are American and they get around the world, so many have USA artists 99% of the time, unless it is Sir Paul Or U2 etc, which means many of our legends here are simply not seen or known in the USA. This is doubly hard, but we work on it, So special thanks Geezer Butler, a UK crossover giant, and John Entwistle, whom I owe much of my life and a lot of my success too, cheers John!
GC: Staying with that point, as you say, getting UK products distributed well in the USA has always been a minefield. Have you now overcome the obstacles and if so, how?
MG: Well we had a shock a few years back. After some staff changes and with another brand about to make bass amps (good luck with that!) we lost a fantastic importer, which was very sad to be honest. Then we and most other bass brands got nailed by Fender. They did a great job and took the market by storm, going from from number five or six in bass amp sales in the USA, according to the MI Sales tracker, to number one and that really killed everyone. It was not a good time for my poor new importer either, so it was not all their fault, but it damn well made things hard for a while here. I must say the not named company were 100% honourable and great on all fronts in the changeover, but I’m sure it cost us both a huge amount.
To the point, we set up an LLC, we set up with a warehouse, which is part of a factory we work with, and we started selling direct. Thanks to Jon Gold for the initial help to set up the bank and some reps. Having been doing this a while, we bumped into reps of old and dealers I have known in the past, and off we went. Sweetwater – OMG , thank you Matt and Chuck for the support you have given us in this changeover! In fact Sweetwater’s sales have caught us out and now Guitar Center/Musicians Friend are getting behind us as well, to the point that the growth sees me out of stock too often and shipping from the UK to keep them happy- sometimes at a loss.
With that in mind we are going to announce Davitt and Hanser part of the JAM group of Companies will be distributing Ashdown from the NAMM show in 2108.
The lesson we have learned is our family business attitude and 21 years has a value and we need to get to meet dealers in 2108 and say ‘thanks – here’s to another 21 years.
The USA has been the toughest market and we have had too many changes forced upon us in the USA , so we have had no continuity of supply, marketing or support. The last two years on our own I believe has helped us get back into the USA and set this opportunity up for the future.
It is hard. We are just nine people and that covers manufacture, service (part time – just three days, as we don’t get much) marketing, sales, web, social, PR, video, etc. Wow, we have a massive amount of this for so few people! This team covers all brands and companies, we outsource very little indeed these days. We have a talented team and I can proudly say my son Dan has skills that I cannot really pay him for, and my son in law Lee is on the case too.
GC: Finally, Mark, where do you see the UK’s MI sector in, say five years’ time and where do you hope Ashdown will be?
MG: Oh Shit – ask Simon Gilson … <laughs> or Hans Thomann that one! I see the distributors selling direct, non-brands at low prices because they can and because it’s so easy to buy from China at the moment .
I see big retail chains and online stores like Thomann, Andertons and PMT having more and more direct supply by brands which in turn is a vicious circle on prices but may give everyone margin which we all need.
What I can tell you is the business has become way more professional over the past five years, and these big retailers support the margin and help companies in a better way than in the past, so thank you. Us little boys need this, as much as the big boys. But that is the change, and we have to do a better job on marketing, social media, TV and more to make these people want to buy our brands, not just cheaper copies, or ‘off the shelf’ products, which is so easy now.
I hope Ashdown has grown. I hope we crack the USA. I believe we offer a service to the end user and retailer that hardly anyone can today and that is what comes of being a real family business with all of our incomes on the line, not someone else’s money!