“In times like these, it’s good to remember there have always been times like these.”
That clever quip is irrelevant today. We have never seen times like these. As former Fed chairman Alan Greenspan testified to Congress in late October, we’re experiencing a “once-in-a-century” credit meltdown.We’re also undergoing a financial panic such as this country hasn’t felt since the Great Depression. America has never seen 1,000-point swings in the stock market, as we did last month. We’ve never before seen gas at nearly $5 a gallon, as we did in July. And we’ve never before seen trillion-dollar emergency spending packages – until now.
In the coming months, we’re going to see more unprecedented things. Some may be good, such as new levels of international financial coordination and revamped world banking laws. Some may be bad, including a war between Israel and Iran that could make last summer’s $5 gas prices look like a bargain, and push today’s recession into a true depression.
The amusement machine industry as we know it – with its three-tiered structure of manufacturer, distributor and operator – was born in the Great Depression of the 1930s. Quite a few operators, distributors and manufacturers have lately celebrated (or will soon celebrate) anniversaries that signify they were launched at this time, survived and thrived. Many industry members find these facts encouraging. These victories are certainly worth remembering.
At the same time, the last depression didn’t ask operators to compete with the Internet, iPods and legalized casino gambling in 48 states. The last depression did not coincide with sky-high prices for gas, food and healthcare. The last depression did not come with “Tobacco Prohibition.”
Today, the smartest minds in the business world disagree sharply on what will happen in the next couple of years and the best way to cope. Warren Buffet says recovery will arrive soon, so now is a great time to invest. Rupert Murdoch says the future is so “opaque” that it’s totally unpredictable; therefore he’ll stand pat for 18 months – or longer, if necessary – until he sees a clear direction.
Where does all this leave the amusements business? Some industry members are hopefully chanting their favorite mantra: “Tough times mean people need cheap entertainment.” True, but how should this industry compete with the explosion of free entertainment that has occurred over the past decade? We haven’t heard any answers.
Other industry members repeat a different bromide: “We can ride out this storm – if we simply keep doing what we know works, and wait for normal conditions to return.” Yes, but how long have we all been saying that? And, how much has the industry shrunk meanwhile?
Recent events should encourage us to mothball our “back to basics” clichés, step back and take a fresh, hard look at – well, everything. That includes the global economy, the U.S. leisure market, technology trends, this industry and our individual businesses. It’s time to start thinking in radical terms, because if conditions continue spiraling out of control, many companies may soon need to start acting in radical ways.
Nearly a year ago, VT published a story that attempted to forecast the industry’s direction for 2008. Perhaps the wisest statement in that story came from Russ Mawdsley Jr., about one year before he became president of AMOA: “Technology, especially in music, is changing so fast it’s hard to keep up with it, much less predict where it’s going next.”
The first step in acquiring wisdom is to admit that there are some things we just don’t know. The second step is to be prepared, psychologically and logistically, to make a drastic leap in any direction if needed. The third step may be to realize that if we wait long enough and nothing is happening, it means we should go out and make something happen.
In times like these, that moment may be coming … soon.