The sale of Pioneer DJ took everyone by surprise. It seemed to most casual observers that their DJ gear had a monopoly on the market, second only to Native Instruments. In fact, “MI Salestrak, an industry sales tracking tool, places Pioneer at the top of their revenue list with more than 50% of DJ dollars spent going to Pioneer gear – outperforming Numark, Native Instruments, Rane, Stanton, and Denon combined.”
So why the sale? DJ Tech Tools speculates Pioneer may have wanted to focus on a larger market — cars. Pioneer was made up of three divisions: DJ, Car, and Home. “Home” was sold earlier this year, and according to DJ Tech Tools’ source, “when the Pioneer Home deal went through, they began considering selling the DJ division – and floated around a very high number to see if anyone would bite. Pioneer may have been surprised when KKR actually made a comparable offer, making the sale of DJ division very attractive.”
Freeing up capital for Pioneer Car makes sense – while Pioneer DJ is a high profit enterprise, its products appeal to a limited section of the general public with a pretty limited market size:
- There are 60 million cars produced in the world every year, with an estimated market size of over 1 billion vehicles
- The total DJ hardware market is generally estimated to be under 1 billion (with the larger MI market topping off at 6.81 billion in 2013 according to NAMM)
The CDJs have become a totem in the traveling producer world and, of course, users are concerned about quality of product after the sale. Fear not:
It will be business as usual at Pioneer DJ. The existing chain of design, manufacturing, and fulfillment will remain as-is, with no expected changes in engineering or product quality. If anything, KKR brings a big war chest of cash and will be looking for ways to grow the business.
As for what Pioneer will do next? DJ Tech Tools has got us covered once again.
Our source didn’t have much to share on future product plans – aside from the soon-to-launch HDJ-C70 headphones and DDJ-SX2. Considering the rapidly approaching holiday season, that might be the extent of things until NAMM 2015.
We’ve definitely noticed an interesting trend from a sales perspective that might start to tell the tale:
Pioneer DJ is slowly killing off budget mixer models. For example, the DJM-250 is discontinued – as are all other two channel mixers that Pioneer was producing. At the same time, the DJM-750 and 850 mixers have seen a price reduction in September. Our speculation is that Pioneer is moving the budget range away from mixers and towards the increasingly popular all-in-one controllers, including DDJ-WeGO3 and DDJ-SB. Even though the ubiquitous CDJ line is their most visible product, the mid-level consumer products outsell them by a margin of over 2:1.
Source: DJ Tech Tools
