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Issue Date: Vol. 51, No. 4, April 2011, Posted On: 5/3/2011


A Tale Of Two Operators


Marcus Webb
amusement operator, jukebox operator, it was the best of times, it was the worst of times, arcade games, coin-op news, vending, vending machine business, amusement industry trends, Marcus Webb, Vending Times, Charles Dickens, A Tale of Two Cities

It was the best of times; it was the worst of times. It was the era of opportunity; it was the era of danger. It was the spring of hope; it was the winter of despair.

The business climate was ripe for investment; the climate was ripe for retrenchment. It was the season of operators building up their businesses; it was the season of operators getting out of the business.

It was the age of optimists who try new things; it was the winter of pessimists who cling to past methods. We were all going to get rich; we were all going to the poorhouse.

In short, it was the present year -- or any year -- in the music and games industry.

There was a street operator named Sorrowful Jones who ran a tavern-based route Downtown. And, there was a fellow named Lucky Smith who operated a bar-based route Uptown.

Sorrowful Jones visited the national expo. In one booth he saw an innovative new model, built by a leading manufacturer. This new machine may have been an electronic pool table, a downloading jukebox or a networked, touchscreen countertop.

"Great machine," Jones said admiringly.

"Thanks," said the manufacturer. "How many do you think you'll be ordering?"

"None," said Jones.

"None?" asked the manufacturer, a bit shocked.

"If I buy one for my best location, then all of my locations will want them. I can't afford that," Jones said, as if it were the most obvious thing in the world.

Jones drifted over to flirt with the cute model who worked the booth. The manufacturer stood, shook his head and wondered why he bothered with this industry.

Into the booth walked operator Lucky Smith. "Congratulations, you've done it again," he told the manufacturer. "I'd like to cover my whole route with these."

"But you can't afford it," the manufacturer sighed.

"Not all at once," Smith agreed. "It will take me three years. I'll start with my A locations this year, next year cover my B locations, and so on."

"You're going to cover one-third of your route ... this year?" asked the astonished manufacturer.

"Sure," said Smith. "Gotta keep my inventory current, you know. Four years from now you'll revolutionize the technology again and I'll start the whole process over."

The manufacturer, feeling dizzy, held onto his machine so he wouldn't faint.

Sorrowful Jones overheard all this and rejoined the conversation. "Hey, Smith," he said in a skeptical tone. "Do all your locations really rate a machine like this?"

The manufacturer glared at Jones. He didn't want this sad sack talking Smith out of buying.

"If one of my locations doesn't rate it now, it will eventually," said Smith. "Otherwise, I'll drop it. I'm not in the business of propping up weak bars. I work with strong taverns and we support each other."

The manufacturer smiled. Maybe Sorrowful Jones would learn something about operating from Lucky Smith.

"How can you afford it?" Jones said.

"I can't afford not to," Smith smiled.

"Let's step into my office," the manufacturer said.

But Jones poked Smith in the chest. "Smith, if you put this machine in some locations, won't every stop on your route demand the same deal?"

"Sure," Smith replied. "And every location on my route can have this machine tomorrow. All they gotta do is sign a contract with minimums. My A spots already have. Some B and C sites have been holding out. This baby could get their names on the dotted line."

Jones frowned. "It takes money to buy new machines," he said. "I don't like being in debt."
"Who does?" said Smith. "But the leasing boys have great financing. Besides, the incremental income from the first round of machines pays for the next round. The value of my whole route goes up. That's my investment strategy."

"Humph," scoffed Jones. "I'm getting out of this business in a couple of years. I'm taking money out of my route, not putting money in."

Smith nodded. "When you're ready to sell, give me a call."

Lucky Smith and the manufacturer excused themselves and stepped into the manufacturer's office. They sat at the desk.

"You know the best time to be in this industry?" Smith asked.

"When there's new technology?" guessed the manufacturer. "When interest rates are low? When new locations are opening and they need new equipment? When there's some hit machine?"

"That certainly helps," Lucky Smith agreed. "But the best time to be in the business is always 'right now' ... if you're the right kind of operator."


Topic: Editorial: Music and Games

Articles:
  • Uncertainty In Bulk Vending's Brave New World
  • Luck Is No Longer A Variable For Bulk Operators
  • Churn, Baby, Churn. Declining Dynamism In Larger Economy
  • Lessons Learned From The Life Of The Mad Mogul Felix Dennis
  • Can Operators Cash In On Heavy Summer Traffic?

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