Economic consultancy finds that Steinway, a leading manufacturer of pianos, has elaborated a scheme to monopolize the market for grand pianos worldwide.
A recent investigation by Fideres, an economic consulting firm, has uncovered Steinway Musical Instruments Inc.'s anticompetitive practices following reports from competitors about their unfair conduct.
Steinway Musical Instruments Inc., renowned for its grand pianos, continues to assert its market dominance through exclusive partnerships with music academies and artists. These deals ensure that Steinway pianos are the exclusive choice for schools and concert halls, offering significant discounts in return. The Steinway Artists Program further enforces this dominance by requiring top performers to exclusively use Steinway pianos, making them a staple in concert halls worldwide.
The combination of the Steinway Artist Program and the All-Steinway School program creates a tightly integrated ecosystem of schools, concert venues, students, and artists, that stifle competition for piano manufacturers. As the exclusive supplier for many music schools and conservatories, Steinway ensures that students have no option but to train on their grand pianos, fostering brand loyalty among emerging musicians.
Steinway's market power is clear. In 2020, the company captured 39% of global acoustic piano sales, with the grand piano segment alone generating $47.6 million. An impressive 99% of concert halls, 97% of professional solo pianists, and 90% of conservatories use Steinway pianos. The All-Steinway Schools program binds institutions to predominantly purchase Steinway pianos, ensuring their pervasive presence in prestigious venues and institutions.
Despite comparable quality from brands like Yamaha, Kawai, and Fazioli, Steinway's exclusive deals maintain high prices, potentially violating competition laws. Fideres' analysis suggests this conduct harms competitors and leads to overcharging schools, venues, and artists. Preliminary findings show overcharges per Steinway grand piano up to $36.8k for model A and $45.9k for model B.
This case exemplifies the widespread monopolization and consolidation seen across various sectors of the US economy, resulting in higher prices, fewer choices for consumers, and diminished incentives for innovation.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240624583426/en/
Contacts:
Russell De Souza
press@fideres.com
+44 20 3397 5160 ext. 231
