Gibson is Killing Cakewalk and Taking the Money

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It takes something that I am either incredibly excited about or incredibly incensed about to write much of anything outside of work these days. This is particularly true of music, as my sentiments on that subject usually vacillate somewhere between “Meh” and “Lolbuttz.”

However, Gibson Brands, Inc.’s November 17, 2017 announcement that it was shutting down day-to-day operations of (and presumably phasing out support for) its subsidiary, Cakewalk, Inc., has me sufficiently rankled such that I feel compelled to reenter the blogosphere once again. Cakewalk was a company that had existed for thirty years, and was most famous for its Sonar line of DAW software. Needless to say, Gibson’s announcement came as a great disappointment to musicians and producers who rely on Cakewalk’s software for music recording and production, including myself.

Sonar has consistently been the DAW that has given you the best bang for your buck for the better part of a decade (and trust me, I’ve tried every DAW out there), and I am not alone in preferring many of its standard plugins over more expensive third-party plugins.

But my irritation that my “go to” DAW software is going away is nothing compared to how outraged I am at the way Gibson handled it–with no prior announcement, a mere two weeks after Cakewalk was rolling out new plugins and offering a discount to consumers on its DAW and related peripheral software as part of its “30 Year Anniversary” sale in October, as well as continuing to sell renewals of its yearly update subscriptions. This is not to mention the customers who had purchased Cakewalk’s “lifetime” subscriptions to its product updates, which were offered for the first time less than two years ago at price points ranging from $199 to $499, depending on a customer’s previous Cakewalk product purchases. Yay for 30 years! And now it’s gone.

So, all signs point to Gibson knowing or having reason to know that consumers were spending their hard-earned money on products and subscriptions that were soon going to become worthless (or at least, far less valuable than they were held out to be), and enticing them to spend this money anyway when Gibson knew it was going to shut Cakewalk down in less than a month. Unless Gibson is going to issue refunds (which it showed no indication of doing within its Thanksgiving week announcement), it’s hard to imagine that this won’t result in potential class action exposure.

But the Cakewalk fiasco is a symptom of a bigger problem with Gibson delivering ever shoddier products, abysmal customer service, and a brand identity crisis, all under the leadership (or rather, the lack thereof) of its CEO Henry Juszkiewicz, who has historically demonstrated that he as much better at being a madman who runs his company like a dictatorship than exercising any sound business judgment or treating Gibson’s employees with any modicum of respect. Make no mistake, the music industry at large is of the opinion that Gibson’s financial troubles are directly attributable to Juszkiewicz.

The fact that Gibson is a company in decline (the 2011 Justice Department raid for its violations of the Lacey Act notwithstanding) isn’t exactly breaking news though.

For instance, Gibson’s signature sponsored artists have been leaving Gibson in droves, the reasons for which Bill Kelliher from Mastodon recently described. You heard that right, a guitar company building signature guitar models for major label artists mistreats, and can’t even deliver conforming instruments to the very artists that are endorsing its brand.

Even worse are the instruments Gibson is selling to consumers, which are commanding historically high prices for new instruments, at historically low level qualities of craftsmanship and materials, with historically stupid innovations such as a self-tuning mechanism that few people like and doesn’t even work particularly well in my experience. I’ll take a guitar that stays in tune and plays well over one that tunes itself thank you very much.

Go to any Guitar Center (before that company goes into bankruptcy too) these days and pick up a few Gibson instruments–you’ll likely find that they will be the worst playing instruments in the store. Their guitars do not come set up, the fret crowning is abysmal, and there will frequently be “deadspots” on the fretboard. And this is true of its cheapest models offered under the Epiphone brand, all the way up to Gibson’s artist and custom shop models, which is a little ironic for company that still uses the branding, “Only a Gibson is good enough” to describe the quality of its instruments. So if it’s been your life long dream to own a Gibson Les Paul, think about getting a used one built in the 90s or earlier–anything new you’ll buy is virtually certain to disappoint.

The customer service at Gibson has also been described as every bit as bad as the instruments it makes, so good luck getting Gibson make good on its “Limited Lifetime Warranty” if there’s a problem with your brand new instrument you shelled out three grand for.

But guitars don’t even concern this company, as Gibson has long since abandoned the notion of being a guitar company in favor focusing on consumer electronics.  In fact, only 20 – 25% of its overall revenues come from instrument sales, so it’s evident where Gibson’s priorities are.

Although Gibson can’t exactly be faulted for diversifying, it also seems to be incapable of effectively managing the assets within its portfolio of subsidiaries. For instance, Gibson already owned TASCAM at the time it acquired Cakewalk, Inc. in 2013 and touted its intention for TASCAM and Cakewalk to essentially join forces under the name TASCAM Professional Software, presumably to marry Cakewalk’s proven software capabilities with TASCAM’s hardware. Not a bad idea, but it never materialized for reasons Gibson has never explained, and Gibson instead simply opted to jettison Cakewalk rather than follow through on its stated business plan.

How can a company with this many problems continue to stay in business, you might ask? Well, it can’t. Moody’s recently downgraded Gibson’s corporate credit rating yet again all the way down to Caa3 (which is near the bottom of Moody’s rating scale), and the Company is going to need to figure out a way to refinance over $500 million in corporate debt before August 2018 or go into liquidation. This means that not only is it the general consensus in the music industry that Juszkiewicz is running Gibson into the ground, this is also the general consensus with financial experts.

While the writing has been on the wall in terms of Gibson’s financial nosedive for quite some time, the Cakewalk incident has gone one step further. With Cakewalk, Gibson has actions have gone beyond simply failing to deliver quality instruments or decent customer service, and now more closely resemble fraud.

If you’ve had a negative experience with Gibson’s instruments or customer service in the last few years, feel free to share in the comments below.


Disclaimer: This article does not contain any legal advice or recommendation that you go sue Gibson or anything like that, and is for informational purposes only. In fact, you’re a moron if you think that it’s a good idea to make financial, legal, or other important life choices based on something you’ve read on a blog.

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