An edited version of this interview appeared in the June 2002 issue of the UK MI Industry's trade magazine, MI Professional. I first met Hartley Peavey one evening in Frankfurt, at the MESSE trade show, when he was wandering around his stand, long after everyone else had gone, just making sure that everything was right. He seemed very Rock and Roll - especially back then, when so much of the industry was still rigidly wearing suits and ties. I suspect he still checks things are ok after everyone else has gone home. He remains, I believe, one of the great characters in the music industry and is, by any standards, a very remarkable man.
 

INTERVIEWS: HARTLEY PEAVEY

It's raining in Corby and Hartley Peavey has arrived from Frankfurt, minus his luggage. He's been in his UK headquarters since 8.30 this morning and there's a just perceptible edge in the air. Nothing is said, but you get the very definite feeling that Elvis is in the building. But if Mr. Peavey has the rats over his lost luggage (and who wouldn't?) there's not even a glimmer of it, when we start to talk. Maybe it's the Southern gentleman in him? Maybe he just likes to talk? Maybe his enthusiasm for his business is as sharp as it ever was and he is keen to explain? Whatever - he is politeness and courtesy itself. He also has a knack of answering short questions with long answers which, while they don't always get you quite where you intended to go, lead you through some fascinating territory. This is a man with a book to write.

He is also a man of considerable, restless energy. He remains more or less fixed to the spot while we talk, in deference to the limitations of my cassette machine's microphone, but throughout he twists and turns, occasionally gets up and paces around and, at one point, explains that he finds it hard to sit still. There's a clue to his success in this, I'm sure.

Uncharacteristically, I have a pre-prepared list of questions written down, which I try to ask during the two hour interview. I think I got them all in, but in the end some of them seemed less revealing than what was given, unprompted.

I began by referring back to an interview in 1999, in which Mr. Peavey had revealed his plans to make the Peavey empire (and it's bigger than you may think, as will be revealed) a billion dollar concern. Had he achieved that goal yet?

'The billion dollar thing is still alive and well,' he says, 'but if we're talking about the music business, I don't think we'll ever get there, which is why we're interested in other directions.' These other directions include not just the highly successful Architectural Division (which, it turns out, supplied the public address system to the newest Heathrow Terminal building, among other coups), but also finance and trucking companies.

There's a sense of frustration about the music industry that repeatedly surfaces as he talks. He is, as he admits, a restless man - physically and intellectually - and, clearly, he is not currently enjoying the constraints of the MI business - which is why he has set his sights very steadily on bigger game - notably, products for the Pro Sound industry.

'I think that's a big part of our future growth. I hear people say "I thought Peavey just made these little cheap amplifiers" and I guess that's because I'm basically a mechanic and not a marketing person and I've told my story very poorly, but Peavey is now one of the highest tech companies out there. Look at MediaMatrix. We're about to introduce a whole new generation of that, which will be both above where we are now and significantly below the current system. We'll have an eight-in, eight-out matrix version that will be a fraction of the price of our present system - I call it the poor man's MediaMatrix: Digitool. It's a Swiss Army Knife or a building block. Frankly, if somebody had told me twelve years ago that we'd be doing that and putting in the sound system at Heathrow, I would have said you have to be out of your mind, but it's happened.'

MediaMatrix aside (though in no sense to underplay what is a very significant product - and likely to become even more so), another string to Peavey's pro sound ambitions is Crest. Rumour has it that the transition wasn't entirely easy when Peavey bought the well-respected amp and console manufacturer, so how has it been going, now that the dust has settled?

'Crest has been problematic for us but it provides a very interesting area of growth. Crest does things that Peavey doesn't do - it sells these huge mixers, in fact they're the only remaining American manufacturer of big-format house mixers. Crest also has a great reputation - a wonderful reputation for high end stuff. What happened was that John Lee, who was the owner of Crest, called me up about three and a half years ago and asked me if I was interested in doing some contact manufacturing for them. I went up to visit with him and when we found that Crest wasn't in a very good financial position we ended-up buying the company. Then we realised we had all these guys walking round and talking big, but what I found was that that was what they liked to do best - just walk around and talk. So now we have everything in-house, with a concentrated group of people that can get things done.'

Was buying Crest the Lexus ploy? An attempt to get Peavey a brand name that Pro Audio people couldn't be snobbish about?

'No. You see, Peavey always had a limited dealer network, so I bought Crest as an avenue for growth that would not interfere with that network. Some people say there's about six or eight thousand dealers in the United States and Crest only sells to about 150 of them, so that means there's a gigantic market for Crest - plus, of course, the huge touring market, where Peavey has never been really involved.'

Over the years, Peavey has sometimes seemed to be the one music industry company that paid attention to prevailing theories of how business should work, according to the management gurus. This is distinctly curious in itself, as Hartley Peavey makes a point of being different to the point of cussedness, but all the same, when vertical integration was the buzzword, Peavey was in there with the real big boys (the computer giants and the car makers) and during the past decade it has been a leading advocate of the partnership concept. This, it has to be said, hasn't been an unalloyed success. While rich fruit has been born with MediaMatrix, ventures such as the partnership with Finish guitar maker Landola and Italy's General Music, haven't gone according to plan. How does Mr. Peavey feel about the idea, now? Have the failures put him off?

'They didn't all work so well: for example in Italy with General Music, but we'll try again. We could even be manufacturing in Italy at some stage. The idea was great but somehow we didn't get it off the ground. And with Landola, well, we don't make acoustic guitars and the guy who ran it was our distributor in Finland, so I said to him, "I can sell, well, 30-40,000 guitars. Can you make them?" And he said "Absolutely". Well, absolutely he could not. I think he thought I was lying, but I wasn't, so for whatever reasons he couldn't deliver. But it takes two to tango and we believe the best way to accomplish our goals is to partner. We've just announced a strategic relationship with a company called Selenium, in Brazil, where we work together because it's hell to get products into Brazil, due to tariffs. We're operating here on the principle that something of something is a hell of a lot better than all of nothing and it's a huge market with 160 million people.'

While we're on the subject of things that haven't always turned out quite as planned, what happened with the DJ market? Uncharacteristically, Peavey seems not to have seen this one coming, almost as if blind-sided. Did Homer nod?

'Well, in the USA the DJ market is perhaps the fastest growing area of audio and, yes I want to be in there.'

But isn't it a little late? Incidentally, Hartley Peavey, whatever preconceptions you may have, is very much the sort of man you can ask a question as blunt as this.

'You're right, it blind-sided me because the truth of the matter is that maybe I had some screwed-up ideas. I was afraid to get into the DJ business for fear of pissing-off my musician customers, until I realised that about half the DJs were musicians, And, frankly, I'm not a big fan of all this techno music and so on. I'm an old Rhythm and Blues guy, but it's the fastest growing thing out there and, let's face it, the DJ business is not terrifically complicated. We can make speakers as well as anybody and we can do it better for less. It doesn't matter if discos are my thing, which they aren't, but making equipment is. So Crest is going to be big in the DJ business - in fact both Peavey and Crest are. We've just hired a product manager to develop that market and we have a new mixer which has features on it that the DJs are going crazy over'.

The decline of the musicians' market is something that gets Hartley Peavey agitated. It's important to understand that this is bigger than money. Hartley Peavey grew up in his father's music store, where he was an early convert to what was called 'race music'. In his collection, he says, is every record BB King has made and his personal epiphany was at a Bo Diddley gig in the 1950s, where he decided that he, badly, needed to be a guitarist. Having grown up in Mississippi, where Rock and Roll, Blues and R&B were born, if you cut off his arm, you'd probably find the letters R&B stamped all the way through it, like a stick of Blackpool rock. His sense of frustration at the way live music has declined in recent years is more than palpable - it's visceral. To put it another way, he was born exactly where and when Keith Richards must wish he had been. Understanding this makes his trenchant views on the way the MI business is managing its slow decline all the more acute and all the more comprehensible. And, of course, laudable.

'Frankly, it's something I worry about, not only in the US but also in Europe. If you're a club owner, it makes a lot more sense for you to hire a DJ than a band. And it takes a hell of a lot less time to become a DJ than it does to learn to play a keyboard or a guitar or whatever. I don't know about the UK but I think it's probably true here - and it's certainly true in Germany in the United States - that we don't have trade organisation promoting people playing music. You see adverts telling you to drink more milk, eat more beef, yada, yada, yada, but what we have is a bunch of trade associations that claim to be trade associations, when in fact they're really just expo companies. We need to promote the consumer playing music and we aren't doing it.

'I talk to the NAMM people about it and they say "Well, Peavey, what are you worried about? The Expo's bigger than ever - it's twice as big as it was five years ago." And I say well, it's not about new, young dealers coming in. The dealers, your members, are getting greyer and greyer and you don't see a lot of new young dealers. It's the same with music. If it were not for music on television , MTV and so on, we - the collective 'we' in the music industry, on the retail side and the supply side - would be in deep shit. It's music on television that saved us. There was a time when guitars were nearly done. About fifteen years ago, you had guys acting like robots, wearing flowerpots on their heads, playing keyboards and guitars were becoming less and less and less. About that time, MTV, VH-1 and the rest came along and suddenly music became a visual thing again.

'We - the music and sound industry - need to promote ourselves. I've heard so many of these self-serving rationalists say things like: "Oh, the music industry's different, musicians are touchy-feely and they'll never buy off the Internet. Bullshit! Look at what's happening. I go to trade shows and the dealers come to me and they say, "OK Peavey, what's new, what's new? What do you have that's new?" And if I were to say "Well, we have three thousand and so products and I'm kind of happy with that, so this year so at this show, I've decided not to have anything new. You know what they'd say? They'd say "Nice to see you" and whoosh! they're off to see the wizard - whoever the wizard may be this week.

'But the amazing thing with the dealers, and I'm generalising here because there are some very good dealers, is that they don't do anything new. You go in there and they've got the same shop, the same paint, the same carpet. So when I do seminars I ask them about this. I say "well, you expect me to come out with new products, new promotions, new advertisements and so on, so what have you done Mr. Dealer that's different? Do you have new displays? Do you have new product lines? When was the last time your store was painted and you had new carpets? What have you done different, Mr. Dealer? And often they'll look incredulously at me and say "What do you mean?" And I'll say, "How would you feel if I brought you shit that I made 15 years ago? How interested would you be?" And they'll say, "Well, probably not at all" to which I say "Well, I'm looking at you. Are you doing the same things you were doing 15 years ago?

'Look, a dealer is my customer and he's looking at me to do something different. So how does the dealer think his customer is looking at him? For some reason music dealers want to sit back and make a full profit and they want somebody else to do the work. Well, that's some kind of mental masturbation. You see the dealer has a job and that job is to sell. If you think retail is a noun, you've are a man that's received a fatal dose of radiation. You may be walking around but you are f*****g dead. Selling is an activity, it's not a state of being! Retail is a goddamned verb, implying action!

'So many dealers think they're delivery boys and what I tell them is that if they think their job is a delivery boy's, they're going to lose-out to the guys in the brown, shiny trucks. You're not a delivery boy, you provide a service. So dealers say to me "Well, what about the big shops?" And I say, you find out what the big shops are doing and you do something else. It's the herd mentality. Everybody wants to follow the leader, but that's not the way you get where you want to go. You have to do your own thing, but dealers don't want to do their own thing, they want to follow the leader. In the United States the leader is Guitar Center. Well Guitar Center buys great big volume and sells at great big discounts (we don't sell to Guitar Center, by the way) and a lot of these guys just let Guitar Center do their selling for them and, in many cases, Guitar Center utilises the dealers - because a lot of our dealers stock the same as Guitar Center does, so they take just whatever scraps Guitar Center leaves them. Playing the other feller's game is stupid. I try not to play the other feller's game, I try to be different.'

My grandmother had a saying at moment's like these: 'Well he's just slobbered a bib-full' she'd exclaim. Now, leaving aside what that may reveal about the infant Cooper's table manners, I'm finding it hard to think of a better phrase to describe the simple key to his philosophy that Hartley Peavey has just revealed. Is it a lodestone showing the route to his phenomenal success? It's at least a part of it.

Though he claims Scottish ancestry, surely there must be Norfolk blood in the Peavey past? The county's motto: 'do different' fits like a glove. Evidence? Ask any British manufacturer who has tried to sell products in the USA and he'll tell you that one of the biggest difficulties is coping with the sheer size of the place and trying to secure distribution.. So how did this tiny manufacturer from rural South manage against the Fenders and Gibsons?

'It was because I did something different,' he says, says, then repeats it again for emphasis. 'You see, sadly, most people have the cow-path mentality - they just want to follow. You've got to be willing to take a chance. Conventional wisdom at the time I started said build high-priced stuff, like you had from Acoustic Control, Sunn and Ampeg. Everybody wanted to build high-priced amplifiers at the time and nobody wanted to build, not low-priced amplifiers, but medium priced ones. So I did what they didn't want to do. It's not that they couldn't do it - it's what they didn't want to do.

'There's a kind of bit of stinking thinking which says "you get what you pay for". If you ask the average person if he believes that old adage, without hesitation they'll say "yes". But I ask them well, have you ever been to a concert where you paid a lot of money for the ticket and yet it sucked? And they'll tell you, yes they have. So I ask if they've ever walked into a little club with no cover charge and heard a band that was really cooking? And they'll say "Oh, yeah". So yes, you get what you pay for but the caveat is this: you get what you pay for if all the other factors are equal. All manufacturers are not alike. If you look at Mr. Marshall here in the UK, the Shure family in Illinois and Peavey - these companies have stayed under the same management since day one. At Peavey I own all the stock. It's been very tempting to go public, or to sell or give away all the stock, but you see I had the good fortune to live through a time when all that was going on in other companies and I saw what happened. I saw that happen with Kustom in the United States and, like most public companies in this business, they tend not to last. So I had the fortune to see that and, as the Spanish philosopher Santayana said: those of us who don't learn from history are condemned to repeat it. So I stayed out of it.

'Look at this business, look at it and you'll find it littered with the bones of companies that made mistakes. You just look at what they did and don't do that. You see it's not important to be right. I don't present myself, nor have I ever, as any kind of a genius or a guru, because I'm not. I'm just a guy with some talents - frankly, not even the talents that I wanted, because I wanted to be a musician. I've said it before, but successful people, it seems to me, are those people who are willing to do the things that unsuccessful people aren't willing to do.'

Which leads us back to retailing.

'The prototypical buying encounter has changed. In the past a guy walked into a store and said he wanted to buy, say, a small bass amplifier. The dealer would tell him which ones he stocked, which he thought was best, but he'd offer him alternatives, then let him try a few and that's how the sale was made. These days he doesn't walk in and ask what you recommend. He points to a printout, or a page in some catalogue and asks the question, "what can you do on this?" This being the selection he made outside the dealer's shop. At that time the dealer has to make a value judgement. He can either supply this and match the price including carriage, or he has to talk him into buying something else which, oh heaven forbid, means you have to know the features, advantages and benefits of what you're selling! Either that, or you have to match that price - whatever the customer asks for. Sadly, most of them will opt for the latter - essentially, not being a sales person but being a clerk,. And dealers have the audacity to complain about profitability!

'There's simply no possible way that you can know the features and benefits of thirty different lines - there's no damn way. So if somebody comes and says, "I want Brand X" and you don't happen to sell Brand X and you want to talk them into Brand Y, how can you possibly do that if you don't know the features and benefits of Brand Y? The answer is, you can't, so you have the alternative of selling Brand X at zero, or very little profit. This is what is literally sucking the life blood out of the industry. But oh, dear God, the alternative would require the C word - commitment. Dealers don't want to make commitments. But no, whatever the customer asks for, they want to have it in stock. It reminds me of the guy who jumped on his horse and rode off in all directions.

'If you do the same thing today that you did yesterday, you have a pretty good idea what your tomorrow's going to be. You see this is why I'm always pushing and shoving and doing different things. Why did I get in the MediaMatrix business? Why did I get into software when I'm a hardware man? Why would I do that? It's because I knew damn well that if I didn't do it, someone else would. I'm practising what I preach. And dealers say to me, "Peavey, why are you telling me all this shit?" It's because I want you to survive - I want you to survive and if you don't change, if we don't change, we're dead. My own people in the company say the same thing to me, Why am I always coming up with new products and new programmes. They say "Jesus Christ, Peavey, why are you doing all this?" And I say do you want a better tomorrow? Because you can't have a better tomorrow unless there's change. Change is not your damn enemy, change is your friend but, see, I can't get that across to people.

'In any event I'm kinda done with our industry because they won't do anything different. It's the herd instinct. They want to create the glories of the past. They want to talk about the good old days but the sad fact is that each one of us will live the rest of our lives in the future. We won't live one day of lives in the past and that is a real problem.'

Which, while it is undeniable, is amusing, in an ironic sort of a way. On Peavey UK's MD Ken Achard's desk stands a model of a 1950's pink Cadillac (and lest you think this is the habitual journalist's sneer - on mine there's a turquoise green '57 Chevy Bel Air). Heaven only knows what model is on Hartley Peavey's desk but there's a suggestion it may not yet have been built. It's that Rock and Roll beat. It won't let him stand still.

As I start to put my tape machine away, Hartley Peavey suddenly frowns and says: 'Don't make me sound like I think know everything, will you? I really don't think I have all the answers.' He seems genuinely concerned that he might come across this way and it strikes me as oddly touching that he gives a damn. Still, I think he means it, which makes it all the more strange when it is abundantly clear that he has a far greater share of clues than most in the audio industry. As they say - 'respect'.

Ends.

2005 Gary Cooper