And Finally

Music to the ears

Steinway rides China’s piano mania to IPO


Wang Yujia: a fan of Steinway

Some 40 million people in China play the piano regularly, according to the National Musicians’ Association.

That’s almost seven times the number of American pianists.

The vast majority are children, spurred on by parents who didn’t have the same opportunities to play the piano in their youth.

Since for-profit tutoring in academic subjects was banned last year, the number of children taking music classes has soared – all of which bodes well for Steinway & Sons, the New York-based piano maker which is hoping for a harmonious $1.5 billion listing based on demand for its  instruments in China.

Steinway, which was taken private in 2013 by US financier John Paulson, mentions China 156 times in its IPO prospectus. For comparison it uses the word ‘pianist’ 44 times.

China currently accounts for 29% of Steinway’s sales, but the company argues there is huge potential for growth because of new support from the government for the arts and the rising number of wealthy families. “China represents a unique market for Steinway due to two primary cultural and structural factors: a deep-rooted reverence for classical music, specifically piano music, and a sizeable and rapidly expanding middle and upper class with an appetite for luxury Western products,” it said.

Steinway was founded in New York in 1853 by German piano maker Heinrich Engelhard Steinweg (who later anglicised his surname) and its instruments are favoured by musicians ranging from famous Chinese concert pianists Lang Lang and Wang Yujia to pop icon Billy Joel.

A Steinway grand piano typically takes up to a year to make and while prices across its range vary dramatically an average one costs around $200,000. In China most Steinway instruments are bought by private clients rather than institutions, the prospectus said. “The piano market in China is the world’s largest, with an average of around 400,000 pianos (of all brands) being sold a year from 2017 to 2020, compared to an average of around 30,000 per year in the United States over the same period,” it said.

To make its goods more attractive to buyers who can’t play the piano, Steinway also sells self-playing instruments – called Spirio Steinway – so the owner can listen to live piano music played by a virtual Lang Lang or Martha Argerich, all controlled from a smart phone.

Steinway also has two non-luxury brands called Boston and Essex.

Paulson will remain in control of the company after the IPO – extending his successful tenure as owner of the 170 year-old institution.  Paulson, better known for predicting the subprime crisis in 2008, bought Steinway nine years ago in a leveraged buyout worth $500 million.

Traditionalists worried about having a Wall Street trader at the helm, but his stewardship has hit all  the right notes, with sales increasing 40% since 2016.

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