State of the hobby?

[Poppa_Zit]

It's my fault I tried to make sense out of your original premise that somehow what Lionel sold in 1953 could somehow be equated to today. I figured there surely must be a deeper meaning, because what you said was nothing more than overstating the obvious.

Well it shouldn't have required too much effort. Quite obviously in '53 (or 54 or so as you prefer) 160M people in the US spent about $33ish million on Lionel (in '53 dollars). Present population growth AND dollar value being what it is today I thought the conclusion somewhat self evident.

That's why I looked for a deeper meaning. What you originally stated was so EXTREMELY self-evident it really didn't need to be said.  

But then I wasn't sure when you went out on a limb to write:

"I'll hazard a hunch that compared to the 1953 population penetration Lionel is waaaaaay off that mark."

So if that's 'going out on a limb' are you saying that today Lionel HAS a comparable or greater penetration into the US market than it did 50 some odd years ago?

Absolutely NOT. I was being sarcastic because of so many changes (progress?) in the marketplace, and in the way people lead their lives with a multitude of new options to spend their free time, what Lionel did 50 years ago cannot be productively compared to anything today. It would be like comparing the sales numbers of Henry Ford's Model Ts to the automobile market 50 years later, in the mid-1960s. Can't be done to prove any point. 

[1688torpedo]

Hello All!    I bet this is what the Older Collectors in 1966 worried about. i.e "Will there be a market in 40 years? Will Lionel still be in Business?  Will Lionel have competition then?  This is not worth worrying about. When all of us have passed on it will be up to the younger generation to keep things going. All we can do now is enjoy our trains & help out others who are interested in joining our hobby. Otherwise, it is out of our hands when our time is over on this Earth. Take Care.

[chuck]

Toy trains used to be considered THE toy.  Trains were so prevalent/pervasive in peoples lives that they couldn't be ignored.  Prior to WW2 almost 10% of the countries working population were somehow involved with railroading.  Almost everyone knew someone or had a relative that was somehow involved in railroading.  Toys tended to mimic things people dealt with in their lives.  Since trains were everywhere, so were their toy replicas.

Lionel always considered itself a toy company, not just a toy train company.  This was probably it's most egregious failure/sin.   It wasn't able to adapt to the rapidly changing marketplace of 1950's and beyond.  Technologies had arisen that were shaking the toy business profoundly and upstarts like Mattel and Ideal were easily able to overtake Lionel.  The company also failed to realize the significance of the decline in importance of real railroads in people's everyday lives (very much like the real railroads).   Coupled with a baby boom that should have meant increased sales and prosperity, Lionel's failure to adapt made for a very rapid and near catastrophic decline.   

I grew up with the car/bus/airplane/electronic era brought about by the rapid transfer of technologies from World War 2 and the Korean War.  While air and road transportation go back to pre World War 1, they were not on the massive scale that occurred Post WW 2.  Toys based on cars/airplanes/and emerging space technologies easily overtook the toy train as a pre-eminent play things.  Relatively cheap and complex toys that required little or no set up time/space or skill were able to easily overcome the toy train as the number one toy.  Why buy something that will take at a minimum hours to set up when you can crack open a box, pop in some batteries and start blasting away at  Martians or Commies or Commie Martians/Martian Commies.

Things will never go back to the way they were before 1952/1953.  This isn't necessarily a bad thing.  People who buy the trains today are genuinely interested in trains/railroading.  They are interested in history, they don't mind putting in the effort (time/space/money/effort/skill), and in most cases they are much beter ambassadors for the hobby.  I fell the hobby is doing OK.

[pgtr]

It's my fault I tried to make sense out of your original premise that somehow what Lionel sold in 1953 could somehow be equated to today. I figured there surely must be a deeper meaning, because what you said was nothing more than overstating the obvious.

Well it shouldn't have required too much effort. Quite obviously in '53 (or 54 or so as you prefer) 160M people in the US spent about $33ish million on Lionel (in '53 dollars). Present population growth AND dollar value being what it is today I thought the conclusion somewhat self evident.

But then I wasn't sure when you went out on a limb to write:

"I'll hazard a hunch that compared to the 1953 population penetration Lionel is waaaaaay off that mark."

So if that's 'going out on a limb' are you saying that today Lionel HAS a comparable or greater penetration into the US market than it did 50 some odd years ago?

[Buckeye Riveter]

Being in the hobby with my own company, I will say that there is no shortage of consumers. I have a very small business with limited resources, but have no problem with demand.  There is season for trains, summer not being one of them. Fall, winter, and spring are what I call "the silly season".  Calls pick up, orders get bigger, demand goes up. Summer comes and I am lucky to get one order a week. I am sure the big companies go through the same thing. The hobby is strong, and in no shape hurting.

Isn't your success really due to the excellent photos of your product taken on a great layout? 

 

[Anonymous]

That's pretty much as I see it, Mike!  We can only do what we--as individuals--can do to share the hobby with others and hope it inspires them to become involved.  The industry side will continue to change and evolve, sometimes in ways that distresses some folks, but there's little the average hobbyists can do about that, and there's sure no point in worrying about it.

Have fun with what you have; buy the things that interest you most when they are offered and you can afford them; share the hobby with others when the opportunity arises; and don't fret about what the future holds.  That's about the best any one of us can do!

[custom mike]

It is what it is.  Enjoy what we have and don't worry.  If you want to do something to help our hobby do anything you can think of to expose more people to it.  That means adults and kids.  Keep everything positive.   It is going to be ok.

[nblum]

Toy trains are good.  More toy trains are even better.  Whatever state you live in and however many
Americans choose or do not choose to join you in your hobby.  On those state-ments, I think most or all of us can agree :).

[Poppa_Zit]

Points to consider before making the above comparison:

Not really necessary. It's a simple pair of numbers. Arounnd 50 years ago there were about 160M folks in the US and they spent ABOUT 33M on Lionel.

2 variables: Today the population has increased and 1953 dollars have to be multiplied by a valuation calculator of some sort based on inflation, CPI or whatever is your pleasure.

    1) In 1953, less than 20 percent of U.S. homes had a television set;

So? What does that have to do with the price of rice? They also didn't have internet ecommerce, global production and the most youth consumer oriented market in history.

    2) The 33M you say Lionel did in sales in 1953 means nothing unless you have the figures for net profits,

Incorrect. It means plenty and it's very understandable and simple: There were 160M people once upon a time and they spent approximately 33M on Lionel trains back sometime around 53 or so. That says plenty and most folks can wrap their brains around that without clouding.

 so here they are, corrected:

        In 1953 Lionel did $28.1 in sales, <SNIP> Source: http://www.rit.edu/~tbbeqa/SalesAF.html, among others.

Not so fast on the correction. Actually multiple sources list 32.9M (I rounded to 33M) for 53. Your own reference also shows the same 32.9M for 54. Hmmmm. Yet other references indicate 53 to be their acme without providing specific monetary values. I selected 53 as I was simply selecting the acme for their sales from the 'glory years'. If you insist it was actually 54 or want quibble over 28.1 vs 32.9 knock yourself out. I'll happily revise my statement to say 'approx 50+ years ago Lionel peaked doing about 33M in sales in a single year' and you can nitpick over subtracing 50 from subtracting the current year. But I'll be sticking to simple rounded numbers.

    3) There were two main choices in 1953 -- Lionel, or American Flyer -- and the two were totally incompatable;

What about Marx? Incompatible? So what? DCS and TMCC only have limited compatibility in 1 direction. Todahy's Z scale not exactly compatible with G either...

in the heyday of both companies (1946-1959) Lionel sold $250 million (65% market share) worth of trains while Gilbert sold $134 million (35% market share) worth of American Flyer. This does not include 1960-1967, when both companies posted net losses for the eight-year period when interest in trains started to slide among youth.

Nice. Picking year ranges and totalling them nicely convolutes things and makes comparisons much more difficult. Market shares between 2 companies within the same hobby has nothing to do with the comparison I was making above between then and now. The topic is about THE HOBBY, not about who has the higher percentage within the Hobby. Lionel was selected by me for what I thought would be obvious reasons based on it's leadership in the day and name recognition and relative leadership today.

4) It is therefore obvious in 1953 Lionel wasn't competing with MTH

Well OK. I guess I can buy that. ..and...?

 or any other strong contender for 3-rail dollars. It had cornered the 3-rail market with 65%; the other 35% was S gauge;

...and...?

5) In 1953 Lionel and American Flyer didn't waste ... er, expend huge dollar amounts on attorneys while suing each other over nebulous issues.

I somehow doubt that wasteful business decisions were invented in the last 5 years. But I suppose pink trains, odd diversification product lines and ousting the talent of Giaimo, Zier, Marfuggi were not wasteful.

So, if the margins are the same today -- roughly 4.5% -- MTH on $40 million in sales would have had roughly $1.8 million in earnings.

Based on the tangents introduced here there seems to be a miss of the basic point.

Considering Lionel to be a toy train hobby industry bellweather from approximately 50 years ago they did about 33M in one year which was spent by a population of about 160M.

TODAY, just to stay EVEN (status quo, no positive growth) with population growth since the glory days they would need to do APPROXIMATELY 475M sales in 2005 dollars. Are they?

Guess the model train biz ain't the pot o'gold some people think it is.

Yes, now we're getting it! Using Lionel as a bellweather: It's increasingly a niche hobby catering largely to a shrinking adult buyer customer base that is further facturered by sub-niches and manufacturer infighting (that no industry is immune to).

"Everyone is entitled to their own opinion. They are not entitled, however, to their own facts." No we can't. Charter Member J-CASS (Jaded Cynical Ascerbic Sarcastic Skeptics) Notary Sojac & Retired Foo Fighter "Where there's foo, there's fire."

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