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Post by ptc on Jul 22, 2020 22:06:44 GMT
Yes, if there is not an identity that comes forward to fill the void for the closing of MTH, there will undoubtedly be less new product on the market. That's a no-brainer. But will this affect others, not just the customers of MTH?
For sure. My guess, MTH is the largest or second largest advertiser for the publications (and a forum) serving the O-Gauge community. When Mike stops writing the big checks for advertising, I see a ripple down effect. As soon as Mike made his announcement, I bet the "war rooms" for these firms that are the beneficiary of Mike's big checks were in full vigor.
There no doubt as a significant effort underway now to fill this void, but frankly, like a perfect storm, there is a shrinking number of smaller suppliers. This may well be a very tough or impossible mission. CTT is more fortunate in as much as they are part of a large publication empire and because of this position they are probably in the best position to weather this storm. Others may not be as fortunate. I spoke to several train dealers in connection with our recent Fundraising Campaign and they were all concerned about return on investment (ROI) for advertising dollars spent. A common response was to question the value they are currently receiving. My guess, the market is not rich with potential new advertiser's. In other words, mission control, we have a problem.
Just my take on possible fallout from the upcoming closure of MTH. Your thoughts?
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Post by Country Joe on Jul 22, 2020 23:04:32 GMT
I think you are right on the mark, Brian. The loss of MTH advertising dollars will be a big blow to some.
I wonder if MTH closing will mean that Lionel will spend less on advertising. MTH is their only big competitor. If no one picks up the MTH brand to compete with Lionel I see no reason for Lionel to spend big bucks advertising.
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Post by harborbelt70 on Jul 22, 2020 23:36:04 GMT
Well, like a lot of other things in this hobby sector, this is difficult to judge without figures, which nobody provides. No one really knows, for example, exactly how many of each model Lionel or MTH have produced, what the base cost of manufacturing them is and what is the real return on advertising dollars, even in rough terms. Nor does anybody really know either their respective market shares or gross revenues, let alone annual profits. A lot of the information about that which is bandied about on other forums is greatly out of date, derived from the great Lionel-MTH litigation of earlier this century.
I don't know, for example, if MTH is really the second largest O gauge advertiser of all. It might equally be a big dealer like Trainworld.
But I grant you that MTH (in its current corporate form) exiting the market will have an adverse impact on advertising revenue. I'm not sure that it will impact on Lionel's spend (whatever it is) because they don't have a completely captive market. They will want to attract people to cross the DCS/Lionel divide.
My sympathies in all of this lie mainly with the dealers who concentrated on promoting and supplying MTH products. I don't get any sort of warm feeling in Mike Wolf's direction for leaving them high and dry, as appears to have happened. I've noticed some dealers moving quickly to adapt - Mr Muffin's Trains in Indiana is one. I wish them luck.
Which brings us back to an old issue - can Lionel consistently produce a quality product? They have hit a few home runs lately (think VL Niagara) but overall the recent picture is - well, you don't need me to tell you. In the end, the fact that Lionel has been more committed to innovation than MTH weighs heavily with me, as does the fact that they show no signs of giving up and going away.
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Post by Deleted on Jul 23, 2020 0:04:19 GMT
Remember when TrainWorld was what, six or 8 page faces of ads? Kalmbach just shuttered two magazines and one big show. Laid off lots of folks. Ads is a big problem. Lionel doesn't advertise in CTT, no one is for sure why.
Not just 0 is facing this.
LS lost Aristo, being picked up by Bachmann from the owner of the tooling, but that market has been dry for a while. Hartland is gone, last month. LGB does what, one US prototype (read:repaint) a year? Rolling stock, building, track suppliers, gone.
With the way things are going, probably all hobbies will dry up. No money. Hopefully SS doesn't dry up.
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Post by ptc on Jul 23, 2020 0:52:56 GMT
"I wonder if MTH closing will mean that Lionel will spend less on advertising."
That's a very interesting and well thought out point, Joe.
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Post by JDaddy on Jul 23, 2020 2:24:26 GMT
It really is tough to say because MTH is more in limbo. They are still manufacturing new products for the next year until this transition happens. Advertising dollars will definitely be down. But will they not still produce a catalog in the future? Its tough to say. I think with people taking it on the chin with lower salaries/ unemployment/ fewer jobs/ no train shows/ no live train events... the hobby in general is going to take a hit.
All I know is if you looking for a remote for DCS ... your SOL... you may choose to buy Lionel products instead.
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Post by david1 on Jul 23, 2020 3:53:45 GMT
Jdaddy,
MTH did announce that the most recent catalog will be the last. It's tough to predict the future, but till somebody or not comes forward to buy MTH in full or partly we just have to wait until it all plays out.
The covid19 is really throwing a wrench into every small business and no matter what we think MTH is a small business. It will be tough to find buyers in this financial climate. I always thought that one day Mike wolf would buy Lionel but it could be the opposite in the future.
I have to look up and see if some seer had anything to say about this. 😁
Dave
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Post by Deleted on Jul 23, 2020 10:18:00 GMT
It would be nice if some segments of MTH survive. Especially their line of 18" Passenger Cars. I don't know the numbers, but, I'm fairly certain MTH had the market cornered on that front. Great bang for the buck. That is why I ordered their 18"ers to ensure that all of our Passenger Trains had cars to pull. In the future I will think twice about buying Passenger Trains if I can't find decent cars at a good price.
Gary.
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Post by josef on Jul 23, 2020 11:04:08 GMT
My only thought on the closure of MTH is now for the mass produced "O" scale items we will be at the mercy of Lionel, (there's little coming from Atlas, though Atlas if smart could step in and step up their products now and be beneficial to them.) MTH was innovative in many products including their control system in which one could even control and run Lionel trains, were as Legacy could only control TMCC and Legacy. With little competition we will be at the mercy of their output and their prices. Hobby Shops will have less items in stock and depend on Lionel to stay in business and take risks on so much now BTO items to stock and hopefully sales on these to stay in business. Lionel won't have to spend much in advertising since basically they will be the only game in town. We will have to wait and see with fingers crossed that there will be a new sheriff in town to take MTH place.
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Post by ptc on Jul 23, 2020 13:53:52 GMT
Most of the train dealers will be on a level playing field when MTH drops out of the picture. They will all face pretty much equal challenges.
But any business that is currently heavily reliant on MTH advertising dollars, no that's a whole different story. My guess, significant adjustments will have to be made to offset lost revenues. It will be interesting to see how this all shakes out.
Since the OGF is for the most part member financed, we get to sit on the sidelines, get some popcorn out, and just watch the show.
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Post by Deleted on Jul 23, 2020 14:28:55 GMT
I have no idea on MTH at this time and don't want to speculate. I think if Lionel was smart they would develop a system that will run MTH engines.
I believe some of the hobbies actually picked up business because of Covid19. Not sure how our hobby has done. I hope it has picked up and we see new comers to the hobby. We might all be surprised by the attendance at the next train show we attend.
Brian pass me some popcorn!
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Post by harborbelt70 on Jul 23, 2020 21:24:01 GMT
I have no idea on MTH at this time and don't want to speculate. I think if Lionel was smart they would develop a system that will run MTH engines. I believe some of the hobbies actually picked up business because of Covid19. Not sure how our hobby has done. I hope it has picked up and we see new comers to the hobby. We might all be surprised by the attendance at the next train show we attend. Brian pass me some popcorn! That’s my impression as well, at least with online suppliers, but I really don’t know if it had much impact in 3rail O gauge. Longer lead times with deliveries from you-know-where won’t have helped in that sector. I think that DCS is still a legally protected proprietary system which can’t be duplicated and I doubt Lionel would think it’s worthwhile buying and then supporting it, but who knows? Possibly the same goes for MTH’s tooling, including passenger cars. In Lionel’s shoes I’d think that MTH has done most passenger car paint schemes to death with repeated issues of the same few basic designs. I’ll shut up now because there’s too much of this subject I don’t fully understand and the factor of personalities and egos amongst those who actually run the train importers is a wild card.
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Post by keithl on Jul 23, 2020 22:07:44 GMT
But any business that is currently heavily reliant on MTH advertising dollars, no that's a whole different story. I’m wondering...what are these businesses that are heavily reliant on MTH advertising? I know that MTH is one of many sponsors of the OGR Forum. They might run half a page in OGR, CTT, and MR. But who is so heavily reliant on their ad dollars?
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Post by ptc on Jul 23, 2020 22:10:24 GMT
"MTH’s tooling, including passenger cars."
This poses an interesting question. The passenger cars are produced in China. Then who really owns, or for that matter, controls their future use once MTH goes away. If MTH products were manufactured in this country, no question that MTH would control the future of their tooling. China presents a whole bunch of challenges however.
With all that is going on worldwide with China now, are potential new suppliers of MTH equipment be willing to deal with this uncertainty? Time will tell.
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Post by trainsintheattic on Jul 23, 2020 23:50:57 GMT
Perhaps some of the individual product categories produced by MTH could be sold off to smaller industries ....PS3 purchased by 3rd Rail for example, Lionel Corp. to, say, Hennings. Think Ives or K-Line.
Better business minds could possibly make something work but I feel expanding product lines isn't a fiscal priority these days.
Bruce
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