Consumers are pulling the plug on the electronic organ industry. Faced with high interest rates and rising unemployment, fewer Americans are buying a home version of the king of instruments for their family room. Another blue note for the industry is the organ's lack of a significant following among the under-40 generation.
If short-term sales do not pick up, fewer organmakers will be around to worry about the long-term outlook. Only 138,000 home organs were sold in 1980, 21 percent fewer than in 1979, and 38 percent fewer than in 1977.
And organmakers do not expect to sing a happier sales song in 1981. In fact, Whirlpool Corporation predicted organ sales revenue at its Thomas International division would slump 13 percent below 1980's level. So the Benton Harbor, Mich., firm announced Nov. 5 it is exiting from the organ business.
Although Thomas is the first manufactuer to leave the business recently, Wurlitzer Company closed a factory in August and last year Conn Keyboards Inc. merged into Kimball International, a major organ manufacturer.
The recession has played a major role in taking the wind out of the industry's pipes. ''It is the economy and the cost of money'' says Ronald Reiner , Conn Keyboards' marketing manager.
''Organs are a postponable discretionary item and during an economic downturn are subject to severe declines in sales,'' a Whirlpool spokesman adds. Whirlpool is forecasting its Thomas division's organ sales will be $15.3 million in 1981 vs. $17.5 million in 1980.
With prices ranging from $1,300 to $30,000, some 50 percent of all organs are bought on credit. So high interest rates and a sour economy mean sales of the big ticket items are harder to make. ''An organ is the kind of thing most people can live happily without,'' notes Judd Taylor, merchandising manager of the Norlin Industries Inc.'s Lowrey Division, another major organ producer. Electronic organ sales Thousands Year of units 1975 205.8 1976 217.3 1977 222.4 1978 199.7 1979 175.2 1980 138.7 Source: National Association of Music Merchants
Not all organ customers have dropped out of the market.''What has happened is that the lower-end and middle-range customers are pressed for funds due to the economy,'' says Gary King, assistant sales manager at Wurlitzer.
''In the upper end you are talking a $7,000-to-$10,000 organ. Those people have money and buy it anyway.'' In the upper end of the line, ''sales have held, '' adds Conn Keyboards executive Reiner.
While there are some well-heeled organ buyers, the typical electronic organ buff is less affluent than a piano purchaser. ''We find our pianos sell well to middle- and upper-class adult heads of households who want to give the kids a musical education,'' says Baldwin United Corporation national sales manager Robert Boettger. ''White-collar individuals buy a piano, blue-collar individuals buy an organ,'' he says.
And organs appeal to an older crowd. Some 53 percent of Lowrey organ buyers are 40 year and older, according to merchandising manager Taylor.
''People who buy organs are looking for leisure-time activity,'' Baldwin's Mr. Boettger says. ''Sales are concentrated among people who are sedentary - once you are 45-50 you don't go water skiing.''
Given their aging clientele, organ manufacturers are worried about winning younger customers so they can stay in business. As Whirlpool pulled the plug on its organ operation, executives noted the business has ''discouraging'' demographics. ''Interest in organ music is declining in a growing number of age groups,'' a Whirlpool official says.
Young people would like organ music if they heard more of it, industry executives contend. ''The challenge is that younger people can't identify with anyone playing the organ as they can with the guitar,'' says Lowrey executive Taylor. ''The 40 and up group remembers theater organs.''
Organ dealers will have to woo younger customers, but first they have to survive the current sales slump. Small stores are best positioned to cope with light demand. ''The mom and pop operations will survive,'' says Wurlitzer sales executive King. Usually smaller music stores sell a variety of products so a slump in one line is not fatal. And since the owner usually works in the store, he can cut back on outside help and trim expenses.
Larger organ stores, often located in shopping malls, have a harder time cutting overhead costs. ''In a mall store your overhead goes on,'' notes Baldwin executive Boettger.
Lowrey moved into shopping malls about five years ago in a bid to win greater exposure for its products. The company negotiated deals for mall space, built stores to its specifications, and sublet them to dealers.
But Lowrey's strategy ran into problems ''when sales tapered off and high overhead costs began to squeeze dealers,'' notes Lowrey merchandising manager Taylor. Dealers began to default on their rent payments. As a result ,''we had to take over 30 out of 175'' stores, he says, leaving the company ''backed into malls without the greatest prospects.''
Although electronic organs are not selling briskly, they are still more marketable than the pipe organs they imitate. A small pipe organ now starts at $ 50,000, Baldwin sales manager Boettger says, ''and it is not hard for a good pipe organ to cost from a couple hundred thousand to half a million dollars.''