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Thread: Are Music Stores in Trouble? Retail Sales Flat for Musical Instruments

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    Default Are Music Stores in Trouble? Retail Sales Flat for Musical Instruments

    A thread started by Lexer titled "Buying drums at Guitar Center...", compelled me to start this thread.

    With Sears closing down many of its brick and mortar stores in 2017, a recent article published on Market Watch (April 30, 2017) titled "Will Guitar Center be overwhelmed by its debt?" had me wondering if any of the smaller independently owned music stores are suffering from the same stagnant sales? If you look at the long faces at my local indie store, the answer is "yes".

    According to a recent Bloomberg report (see graph), musical instruments sales have been stagnant since 2007. Ten years of flat sales have many stock market analysts wondering if the big leveraged buyout wave of 2005-2007 is about to claim another victim?



    According to the article, "In 2007, GC was taken private by Mitt Romney’s former private-equity firm Bain Capital in an LBO valued at $2.1 billion that left it saddled with $1.6 billion of high-yield debt. Coming just ahead of the 2008 financial crisis, the company struggled with its high interest payments for several years."

    GCI (Guitar Center Inc.) has $1.6 billion bond debt due to mature within two years from now and some market analysts say "it's a hole too deep to climb out of".

    Unrelated?

    GC has ditched the yearly Drum-Off competition for 2017 amid rumors that this is the first sign of major changes (bankruptcy) to come down the pipe. Probably a few of you here can care less if the Drum-Off has met its demise but for many up and coming drummers, trying out for a spot at the regional level was something to be proud of.
    ------


    -----

    What are your thoughts about the longevity of the brick and mortar music stores? (Please, no GC bashing)

    Is offering music lessons enough to keep the door open?

    Guitar Center Sacramento:

    Last edited by late8; 08-23-2017 at 03:31 PM.

  2. #2

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    Congress has side-stepped this issue for years; they have bypassed the opportunity to allow the states to equally tax the on-line retailers the same as the brick & mortar stores.
    Since that has not occurred, the B&M stores have a disadvantage.

    The Quill decision was handed down by the US Supremes in 1992; at that time the on-line and mail order business was $35 billion. This year (CY17), the on-line and mail order business is estimated to total $534 billion. Since Congress has shown they have no huevos to do anything, this will need to be resolved in the courts. The case in South Dakota may be the earliest vehicle in which to act.

    At the current rate of growth for on-line sellers and the current rate of demise for the B&M stores, if the courts don't act quickly we may not be able to enjoy any local sellers for long.

    As for the situation with GC, I don't know how much of GCI is from MF.....................whatever that portion is, it is growing.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  3. #3

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    I have to drive over 45 minutes just to get to an l&m. I live a couple minutes out of the city but still. There are hardly any music stores left here. Just one that comes to mind. There are another few big box stores like St. John's music and quest music. But they only have 1 location each.
    Quote Originally Posted by rickthedrummer View Post
    There is intelligent life out there. The problem is that there isn't any here.

    -Mike

  4. #4

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    Quote Originally Posted by Ricardo View Post
    Congress has side-stepped this issue for years; they have bypassed the opportunity to allow the states to equally tax the on-line retailers the same as the brick & mortar stores.
    Since that has not occurred, the B&M stores have a disadvantage.

    The Quill decision was handed down by the US Supremes in 1992; at that time the on-line and mail order business was $35 billion. This year (CY17), the on-line and mail order business is estimated to total $534 billion. Since Congress has shown they have no huevos to do anything, this will need to be resolved in the courts. The case in South Dakota may be the earliest vehicle in which to act.

    At the current rate of growth for on-line sellers and the current rate of demise for the B&M stores, if the courts don't act quickly we may not be able to enjoy any local sellers for long.

    As for the situation with GC, I don't know how much of GCI is from MF.....................whatever that portion is, it is growing.
    I'll go out on the limb. I think the brick and mortar music stores will be a thing of the past. The biggest local indie store in my area closed one out of three retail locations due to lack of sales (Modesto CA). I don't see their second location lasting beyond this year (Elk Grove CA). The "flagship" store has been in business for over 35 years (Sacramento) but I think a high enrollment in their music program is keeping the foot traffic flowing.

    Quote Originally Posted by FlyByNight View Post
    I have to drive over 45 minutes just to get to an l&m. I live a couple minutes out of the city but still. There are hardly any music stores left here. Just one that comes to mind. There are another few big box stores like St. John's music and quest music. But they only have 1 location each.
    Thanks for chiming in Mike. I was wondering how the Canadian music stores are fairing. I know the exchange rate can make a big difference when buying U.S. products through and online retailer but can it be a "deal" breaker on a lot of the high priced gear?

  5. #5

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    The other day I was talking to the owner of my local Five Star Drum Shop and he told me that many drum shops around the country that have been in business for many, many years are starting to close their doors because the younger musicians prefer to buy gear either online or at the local GC. The owners told him that they just can't complete and I believe it. However, he's still in pretty good shape because his shop is the sole supplier of back line drums and percussion for the New Orleans Jazz and Heritage Festival and he is also heavily involved in the school band market in the New Orleans and surrounding area.

    I personally think that he'll be around for a while because he sells service, knowledge, and professional level instruction in addition to gear, charging a handsome premium for those coming into the shop with requests for service, trade-in, or sale on gear that they obviously bought "online" or at GC. He is in the New Orleans area and his demand, while not great, has always been pretty good and stable, even during Katrina.

    Personally, I hope they stay around or experience a resurgence in popularity but I will admit that shipping is rapidly closing the gap on sales and service and quality instruction can be found just about anywhere these days, especially online which is becoming an increasingly viable option ...
    Last edited by dangermoney; 08-22-2017 at 08:55 PM.

  6. #6

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    I can attest that the internet has had the biggest impact on local mom & pop neighborhood businesses. Not just music stores, but EVERYTHING. Now with Amazon's purchase of Whole Foods, the groceries business (which has been immune thus far) is the final frontier of internet commerce.
    As consumers, we no longer require trained sales and service personnel to make an informed purchase. We can do "user rated feedback" research, price and availability shopping and purchasing from the comfort of our own home. If the local stores want to stand a chance, they need to have product in stock locally. To add another wrinkle; many people go to a local store to have a "hands on" experience with a product....then walk out and make the purchase on-line.
    In truth, I can spend a couple hours researching a product and gather as much or more unbiased knowledge about it than I can get talking to most sales people. I can shop the entire USA from my chair to find the best price and specific model/item I want, then purchase it at the best price...and most times not have to pay for shipping or sales tax. Also, it's easier to spend money on something you don't need or can't really afford on-line than it is in person. The internet makes it easier to detach ourselves from the personal buying experience.

    The exception in my case are the local used music equipment stores (like Music-Go-Round). I spend a ton of money there, as do many local musicians. Used gear is much better to buy locally "in person" for obvious reasons. The prices are dirt cheap compared to new and you know what you're getting. In addition, the inventory is constantly changing on a daily basis. It becomes a "quest". I'll stop in once every few weeks, just to see what they got in.
    -Brian

    "Too many crappy used drum stuff to list"

    Play the SONG......not the DRUMS!!!

    "I think that feeling is a lot more important than technique. It's all very well doing a triple paradiddle - but who's going to know you've done it? If you play technically you sound like everybody else. It's being original that counts." ~ John Bonham

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    It is slim pickings here in Los Angeles as far as M&P music stores. This is suppose to be the "entertainment capital of the world". Pro Drum in Hollywood and another drum store called Lone Star Percussion that just opened in Fullerton Ca about 10-15 miles away. These 2 stores are the only drum/percussion stores I know of in southern California. In my immediate area I'll say a 10 mile radius I can name 3 music stores that sells drums also:
    Bellflower Music
    Downey Music
    Gilmore Music
    Gilmore is the oldest opened in 1944 at the same location they are today. Out of the 3 they offer lessons, rehearsal studios, and lockouts. Not sure if this is what/is keeping them a float but they're managing. My local GC fluctuates sometimes I go and it's a ghost town maybe 5 customers. Other times it's packed I don't know if all those people are buying stuff. It might be too late but these B&M stores need to go back to the drawing board dig deep and get competitive. You don't have to be #1 just place in the top 5. I learned this from the trucking industry. At one time Schneider trucking was the #1 trucking company in the United States. Followed by JB Hunt, Swift, and Werner. Of course everyone wants to be on top but Swift was happy at 3rd. Of course they can do better but they are/were not in a bad position still making money. I bought a stick bag last week from an online for $7 free shipping and store pickup within 2 days. The cheapest stick bag at my local GC was $14 in stock. The GC is 10-15 minutes away, the store I ordered from was 3 miles away. This is what I'm talking about no competition.

  8. #8

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    I want both........................
    I like to see, hear, and touch the choices at the B&M stores.
    I like to be a patron of the local business and appreciate the owners.
    On the other hand......................
    I like to shop on-line and get free shipping.
    I like to pay no sales tax.
    I like it when the big brown box on wheels puts new stuff on my doorstep.
    I like it when I don't need to go to the store parking lot and get my cars doors banged up.
    I like it when I can go out and shop without some a$$hole pointing a gun at me wanting my cell phone and money.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  9. #9

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    I won't go into any details.. but since I work at a small family own music store I can tell you we are in serious debt.
    One of the only thing keeping us alive is that we have a huge contract with a lot of schools for music instrument rentals and repairs. We rent out hundreds of instruments during the school year.

    The other saving grace is our lesson program. We have 10+ teachers to cover all the different instruments. Hundred students which is good money for the store.

    As far as inventory it's seriously extremely tough to keep things in stock people want because everyone has such different taste. We have two or three high end kits that have sat for years because people around our town are cheap. Or they want something different then what we have if they are serious musicians ready to spend the big bucks. Parents around my area want $300 throw away kits and then complain when they don't last. Fake cymbals that just bend and break. Plastic factory heads that don't last a week. I mean you get what you paid for!! But they can't grasp that concept. I constantly ask my boss if we can keep this in stock and keep that... and we should order this or that... but he always responds with we just don't have the funds to keep them in stock.

    It's sad to see but we are barely keeping are heads above the water.
    19pc Yamaha Maple Custom Vintage | 12pc PDP X7 | 9pc Ludwig Jr. | 8pc Pork Pie ZebraWood | 6pc Sonor | 5pc Orbitone |4pc Sonor Martini | 5pc Gretsch Energy | 41 Snare drums and growing!

  10. #10

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    The family owned music store I shop at can't compete and here's an example why. I'm shopping for a bamboo Eco-X DW Collectors snare and found one that's been sitting on their showroom floor as a new item since 2007. It's priced on "clearance" for $499.98 +tax. MSRP is $1,098 and clearly marked on the sales tag.



    This snare was probably the first prototype DW produced back in the early 2000's since it has the Gold and Silver badge:



    Old throw off:



    Old butt plate:

    Last edited by late8; 08-23-2017 at 10:16 AM.

  11. #11

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    continued...

    The new version of this snare is $425+tax and has the current hardware offered for the Collector's line. We know where I'm getting my new snare from right?


  12. #12

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    Like a car dealer, perhaps your family-owned B&M store could persuade DW to provide a manufacturer's rebate due to the improvements now offered.................couldn't hurt to ask.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  13. #13

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    It's interesting that many are comparing B&M to online stores. I have done marketing for many online stores for years, not just in the music industry, and I can tell you that we shouldn't be thinking about it in terms of 'B&M vs. online'. It is mostly online and B&M stores vs. Amazon. Three of my smaller online accounts have closed up shop and I'm aware of hundreds more outside of my direct industry that are struggling and they all say the same thing... "Amazon".

    Amazon is negatively affecting even the mammoths like GC, Sears, Macy's and this list is too long to mention everyone. They have literally changed the landscape of retail in this country and unfortunately have put so many treasured American businesses out of business.
    - Tom

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  14. #14

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    Quote Originally Posted by Ricardo View Post
    Like a car dealer, perhaps your family-owned B&M store could persuade DW to provide a manufacturer's rebate due to the improvements now offered.................couldn't hurt to ask.
    I tried to persuade the manager of the family owned music store to meet the current price point for the Eco-X snare and he flatly refused to budge on the price. I was told over the phone and again in person that he could not go below "cost". So it appears that $499.98 was their cost? My loyalty will always be for the family owned store because they support their community in so many ways besides being a brick and mortar store but in these tight economic times, I rather get the best bang for the buck and wait for the brown truck to roll up to my front door.

  15. #15

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    Quote Originally Posted by drummer View Post
    It's interesting that many are comparing B&M to online stores. I have done marketing for many online stores for years, not just in the music industry, and I can tell you that we shouldn't be thinking about it in terms of 'B&M vs. online'. It is mostly online and B&M stores vs. Amazon. Three of my smaller online accounts have closed up shop and I'm aware of hundreds more outside of my direct industry that are struggling and they all say the same thing... "Amazon".

    Amazon is negatively affecting even the mammoths like GC, Sears, Macy's and this list is too long to mention everyone. They have literally changed the landscape of retail in this country and unfortunately have put so many treasured American businesses out of business.
    Thanks for the insight. I didn't know the extent on how Amazon has dealt a blow to the other online businesses on top of the B&M stores.

  16. #16

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    The local B&M stores here have started selling low to mid range gear because they can't compete with Amazon and others when it comes to high end items. They took out the Fender Strats and Teles, and replaced them with cheaper Austin brands. The highest end drum kit is a mid grade Mapex. They sell more "beginner" Mapex Rebels than anything. Quite simply, they don't have the market here to sell high end items, not even in the PA side of the house.
    Six piece Mapex Horizon kit. Sabian B8X cymbals. Vater Drumsticks.


  17. #17

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    Sucks to see that beautiful Bamboo snare sit there for all these years and still more expensive than the new version.
    19pc Yamaha Maple Custom Vintage | 12pc PDP X7 | 9pc Ludwig Jr. | 8pc Pork Pie ZebraWood | 6pc Sonor | 5pc Orbitone |4pc Sonor Martini | 5pc Gretsch Energy | 41 Snare drums and growing!

  18. #18

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    Quote Originally Posted by late8 View Post
    I tried to persuade the manager of the family owned music store to meet the current price point for the Eco-X snare and he flatly refused to budge on the price. I was told over the phone and again in person that he could not go below "cost". So it appears that $499.98 was their cost?
    Quote Originally Posted by SpazApproved View Post
    Sucks to see that beautiful Bamboo snare sit there for all these years and still more expensive than the new version.
    That is why it might make sense if John Good or the powers at DW could offer the buyer a $100 rebate (or some amount) and the mom & pop store could get their money back.
    Seems that DW would like to keep vendors happy too.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  19. #19

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    Quote Originally Posted by DrumWhipper View Post
    The local B&M stores here have started selling low to mid range gear because they can't compete with Amazon and others when it comes to high end items. They took out the Fender Strats and Teles, and replaced them with cheaper Austin brands. The highest end drum kit is a mid grade Mapex. They sell more "beginner" Mapex Rebels than anything. Quite simply, they don't have the market here to sell high end items, not even in the PA side of the house.
    I know exactly what you're talking about as far as the low demand for high end kits at the B&M stores.

    I was eye-balling this DW Collector's kit pictured below for six years at this store. It had a price tag at MSRP of $6,799.98. It sat on the showroom floor for nearly nine years.

    Walked in one day and found it marked down to $3,399.98. I waited a year and found it marked down again to $2,300+tax. I walked out the door paying $2,500. Grant it that it's over nine year old but that didn't matter to me and it came with a one year "new kit" warranty from DW.






    Quote Originally Posted by SpazApproved View Post
    Sucks to see that beautiful Bamboo snare sit there for all these years and still more expensive than the new version.
    My feelings exactly and I know where the store was coming from as far the price but I went to them first before I started to shop online and found a much better deal.

    Quote Originally Posted by Ricardo View Post
    That is why it might make sense if John Good or the powers at DW could offer the buyer a $100 rebate (or some amount) and the mom & pop store could get their money back.
    Seems that DW would like to keep vendors happy too.
    Great idea for a rebate from DW. I'll keep my eyes open for a used snare on Ebay. I found the exact same model snare used online for $235.00 + $26.00 for shipping. No sales tax too but it got sold before I had a chance to make a bid.
    Last edited by late8; 08-23-2017 at 03:24 PM.

  20. #20

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    Quote Originally Posted by dangermoney View Post
    The other day I was talking to the owner of my local Five Star Drum Shop and he told me that many drum shops around the country that have been in business for many, many years are starting to close their doors because the younger musicians prefer to buy gear either online or at the local GC. The owners told him that they just can't complete and I believe it. However, he's still in pretty good shape because his shop is the sole supplier of back line drums and percussion for the New Orleans Jazz and Heritage Festival and he is also heavily involved in the school band market in the New Orleans and surrounding area.

    I personally think that he'll be around for a while because he sells service, knowledge, and professional level instruction in addition to gear,
    It's just my personal opinion, but as a previous owner of a pager and cell phone shop, I feel that most brick and mortar shops will vanish.
    Number one, they get tore up on phone lines and any installation.
    I had 3 personal lines at home and I paid more per month for one business line than all 3 of my home lines.
    When the telephone company came in to install, the bill was 4-5 times higher than when I had a similar install done at home.

    Also, I found out real quick that I could not compete with the big boys in the business because they could buy so much more stock at one time than I could so they got a better rate on their products. I was paying full price for my stock where as they got a great discount.
    We found out really quick that providing a repair service was going to help us survive so we were doing pager repairs for the big 4 companies in our area. And then Cricket entered the cell phone market and they slaughtered the market causing many many shops to close and a lot of the big boys were defaulting on what they owed to me making it difficult for me to stay open.

    I eventually closed it down and took a heck of a beating, but experience earned, something learned.

    I also think another reason why more people are going to online buying is because you don't have to deal with the idiots out there.
    I was in the mall a couple of years ago when the thugs all decided to break out and fight any and all and I decided then that I would never go back as long as they allowed these uncivilized heathens to come there. My life is worth more than trying to support a brick and mortar.
    Take care and seeya!

    Jim

  21. #21

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    It all boils down to distribution leverage on the manufacturers. Small shops/stores do not have the total sales and buying power that monsters like Amazon & Walmart do. The DW Bamboo snare is a perfect example. Manufacturers don't want to engage in commercial sales. They're not geared for it. They want to build stuff and sell it in the highest volume possible. When you can place a 5 or 6 figure stock order, manufacturers beat each other up trying to get their product in your store. Many times they require you buy a variety of different product configurations (like less popular sizes & colors) in order to get the pricing level you want. You can then sell the popular stuff that moves fast at high profit and heavily discount the less popular product in order to keep your inventory turning. "Earn & Turn" is key for inventory control. What the store owner who has the 10+ yr old DW Bamboo snare doesn't realize or accept is that he's already lost the cost of the snare many times over by keeping the snare in his inventory for 10yrs. He probably lost money after the first 6 months it sat on his shelf. Now, he's refusing to take a $70 loss right now and will keep the snare on the shelf for another year and lose another $200, LOL. It's like investing $500 in a CD that yields 2% when the cost of inflation is 4%.
    -Brian

    "Too many crappy used drum stuff to list"

    Play the SONG......not the DRUMS!!!

    "I think that feeling is a lot more important than technique. It's all very well doing a triple paradiddle - but who's going to know you've done it? If you play technically you sound like everybody else. It's being original that counts." ~ John Bonham

  22. #22

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    Quote Originally Posted by jgraham798 View Post
    It's just my personal opinion, but as a previous owner of a pager and cell phone shop, I feel that most brick and mortar shops will vanish.
    Number one, they get tore up on phone lines and any installation.
    I had 3 personal lines at home and I paid more per month for one business line than all 3 of my home lines.
    When the telephone company came in to install, the bill was 4-5 times higher than when I had a similar install done at home.

    Also, I found out real quick that I could not compete with the big boys in the business because they could buy so much more stock at one time than I could so they got a better rate on their products. I was paying full price for my stock where as they got a great discount.
    We found out really quick that providing a repair service was going to help us survive so we were doing pager repairs for the big 4 companies in our area. And then Cricket entered the cell phone market and they slaughtered the market causing many many shops to close and a lot of the big boys were defaulting on what they owed to me making it difficult for me to stay open.

    I eventually closed it down and took a heck of a beating, but experience earned, something learned.

    I also think another reason why more people are going to online buying is because you don't have to deal with the idiots out there.
    I was in the mall a couple of years ago when the thugs all decided to break out and fight any and all and I decided then that I would never go back as long as they allowed these uncivilized heathens to come there. My life is worth more than trying to support a brick and mortar.
    I hear you but this shop is different. The revenue from the annual Jazz Fest, School Bands, and professional instruction probably more than makes up from the expenses and lost sales revenue so he can afford to take a bit of a hit in those areas. Also, the owner is a well known and established drummer around town and has a loyal following of well known professional drummers that frequent his store.

    And as far as his pricing, it's on par with online. I purchased a brand new Ludwig Classic Maple shell pack from him a couple of months ago for less than I would pay online. But that could also have been due to the fact that I've been a loyal customer of his for the past 20 years or so ...

  23. #23

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    no issues here

    good access to everything i could need

  24. #24

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    Brick & Mortar retail is in trouble in general. Big stores, small stores......they're all losing out to the online retailers. Tough business to be in right now.

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    I think back to 83 when I bought a brand new Tama Swingstar shell pack from the Auburn Blvd store Rich mentioned. The showroom was packed with entry level stuff even back then. Yes they had nice stuff too, good cymbal selection and the great wall of sticks but still I had to order a Pearl brass snare through them. I didn't want the stocked steel that was readily available.

    These days (sorry to say) I do most of my shopping on line. No hassle shopping. I like reading reviews and hearing sound files. I know that is a sketchy way of shopping for an instrument of sound but it's my preferred way.

    I can say this though... when I do go to do some hands on testing and rummaging through shelves of heads and sticks I only like to go the m&p shops.

    Atlanta Pro Percussion is a great store, a total throwback to the old days. I would like to go over today just thinking about it.
    Last edited by slinky; 08-24-2017 at 09:26 AM.
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