Inside the Ever-Changing Business of Jukebox VendingAugust 1, 2010 No Comments
When Joan Jett sang about putting another dime in the jukebox, it might as well have been the Stone Age. Jukeboxes have evolved at a rapid-fire pace within the last two decades to catch up with technological innovations, namely digital music and Internet connectivity. Today’s jukebox vendors, most of whom also distribute video games and other entertainment components for business and home users, are always looking for new ways to meet client demand. And for some, the business has proved challenging in recent years.
“Unfortunately, we no longer sell jukeboxes,” said Bill Watson, general manager of Weymouth Distributing Co., Inc., in Los Angeles. “It has been almost two years since we sold our last one. The sales numbers were not there for us, so we decided to focus on our core competencies, which are vending machines and everything that goes along with that.”
The Matter of Size
Other vendors throughout the United States have found that trends in digital music create new opportunities with longtime and new clients. George Thurber, owner of George’s Games & Music in Pawtucket, R.I., said clients prefer the newer jukebox designs because they take up less room. Thurber, who sells to bars, restaurants and taverns throughout New England, works closely with clients to get the most money from these compact devices.
“A lot of people like the wall units,” said Thurber, “because they take up less space. They aren’t really that different in size, but they have space underneath.”
He said most clients want Internet-enabled jukeboxes that allow people to download music for as much as a dollar per song. The price, he admitted, has not been a deterrent for customers. “They get the song they want,” he said. “And if they want to hear that song next, they have to pay another dollar.”
Thurber says location and competition for attention determine how much profit any jukebox makes. He recommended installing the device where customers can see it. “If there’s also background music, like bands, radios and DJs, you’ll lose money,” said Thurber. “But if it’s just a place with just a jukebox, you can make a lot of money.” Particularly, he said, on busy weekends.
“It all depends on the location,” Thurber explained. “Location wise, some people can make money and some people can lose money.”
Touch and Go
Rita Falcone, president of GGQ of Delaware, Inc., in Rehoboth Beach, Del., vends plenty of TouchTune jukeboxes these days. “I think because of the variety of music and the amount of music you can play on it,” she explained, “people really enjoy them.” Compared to CD jukeboxes, the digital TouchTune devices allow people to access more music than ever before. It’s music to many vendors’ ears.”
“If you have a CD player,” said Falcone, “you have maybe 100 CDs.” TouchTunes, on the other hand, uses broadband Internet access to download hundreds of thousands of songs. It also downloads a top 10 periodically based on customer selections.
Falcone said the Internet component can be tricky because it introduces a third party to a longtime client-vendor relationship. “You are partners with the client and TouchTunes,” she explained. “Fees involved are offset by the vendor and the operator unlike with a CD jukebox where there are no fees. The vendor simply puts the CDs into the jukebox.” But, she said, the new digital systems, with their breadth of music selections, far outweigh the initial costs. “The fees don’t matter after awhile,” she admitted. “The brighter the jukebox, the better off and more profitable it is in the long run.”
In Michigan, many businesses have been hit especially hard by the recession and challenges in the struggling automotive industry, which makes its home in the Midwest. Economic woes can naturally translate into less business for bars and restaurants, the main clients for Doug Wildey, president of Game Room Guys in Belmont.
“I think in recessionary times, we see a decline in dollar-per-play revenue,” said Wildey. “We in the Michigan market are affected more than most. So we’re trying to get the customers songs they want to hear on the 50-cent side to stimulate more customers to play jukeboxes.”
Game Room Guys works with many bar and restaurant clients and bowling alleys in the Lower Peninsula. “Most clients want background music,” he said. “And they want the customer to pay for music they choose.”
He said every one of his clients now operates digital jukeboxes. And it’s all because of selection. “Basically any song you ever want to hear is on that jukebox,” said Wildey. “I have faith and confidence that I’ll be able to pick the song I want to hear.”
Wildey tells clients to position jukeboxes near pool tables for greatest revenue potential. “The people who play pool, play music,” he said. “Plus, they have time to stand around between shots and are in larger groups, usually. If you’re not taking a shot, you have a tendency to do something else like play music.”
Wildey spends a lot of time marketing and tracking new technology in the industry. “I think that somebody will invent an app for the phone that lets me play songs on a jukebox,” he said. And if not, he admitted, he may consider introducing one himself.
Home Sweet Home
While many vendors target business clients in the jukebox industry, TNT Amusements in Southhampton, Pa., has changed its business model in recent years. The dealer has gone from working with bar and restaurant clients to home users.
“We became exclusive home sales dealers,” explained Todd Tuckey, owner of TNT Amusements. He said the company had vended to businesses for many years, including restaurants and bars, but identifies a huge market for home sales in Eastern Pennsylvania, New York, New Jersey, Maryland and Delaware. TNT also ships product around the country.
“We have sold more than 14,000 machines,” said Tuckey, who said, like his business clients, home buyers also opt for digital jukeboxes these days, particularly boxes that allow users to burn CDs to memory.
“Chicago Gaming has a beautiful box,” he said, “a bubbler that is not coin-operated. The CD jukeboxes are losing their luster with the customers. They like being able to load their own equipment.” He said with many digital boxes, customers can burn up to 700 CDs.
Tuckey admitted the industry is constantly changing. In recent years, his jukebox rental business for parties has taken a hit. Where he once rented five or more devices over a weekend for birthdays and special events, he’s now lucky to rent one or two. He blames the digital music revolution on the decline, especially as more people own their own MP3 players and speaker systems.
He’s braced for even bigger changes in the industry. “I think Comcast and Verizon are going to deal directly with bar owners and these big clubs and chains,” said Tuckey. “They will lease and service equipment directly and completely eliminate the vendor.”
He said because downloadable digital jukeboxes require very little maintenance, vendors virtually have no service calls. “It’s an untapped market,” he said, “where revenue will be made on the phone bill. I predict that these big companies will come out in a way to eliminate the vendors. They have less work and less gross money.” -
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