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Issue Date: Vol. 51, No. 6, June 2011, Posted On: 6/20/2011


What Business Are You In?


Marcus Webb
amusement operating profession, jukebox operator, vending machine operator, vendor, amusement vendor, juke box business, coin machine business, pool table, Amusement and Music Operators Association, operator, pinball machine, arcade machine, Brad Circone, Circone + Associates, Marcus Webb, Vending Times

Talk about ironic. The amusement and music operating profession is more than a century old but its members still can't seem to agree on exactly what it is they do. In fact, the Amusement and Music Operators Association doesn't even have a standard working definition of the word "operator."

In decades past, many music and games operators used to say "I'm in the moving business." About as many operators said their most important value was providing service. (Many still do, in fact.)

But there has always been a third definition of operating, even if it was a minority opinion. Clyde Knupp of Amuse-O-Matic (Fort Dodge, IA), who was president of AMOA in 1989, explained this view by emphasizing the primary importance of leagues and promotions to his route. Knupp always said, "I am in the sports marketing business." League operator became the preferred designation for some pool and dart vendors.

Today there is little call for operators whose main asset is a moving truck. And, since service increasingly means replacing a bad chip or line of code, the "operator-as-technician" era is also fading fast.

But operators who think of themselves as marketers ... operators who see their most important role as supporting locations by bringing in customers, then providing great entertainment to those customers ... will always have a job.

The challenge for today's "marketing operator" is to update this concept of his role to fit the realities of the smartphone and social-networking generation.

Into this picture steps Brad Circone, president of Circone + Associates. The son and grandson of operators, he is also AMOA's new marketing strategist. Circone has one of the sharpest takes on the future of operating that we've heard in some time.

According to Circone, here is the good news: "Years ago we heard predictions that Microsoft or some other corporate giant would go into providing on-premise entertainment, in direct competition with operators. They didn't. Why not? Because they don't want to hassle with the fragmented market. It takes too much handholding with all those location owners.

"Big corporations can't create standardized systems to do this in a way that makes sense for them," Circone continued. "They have decided to leave the job to somebody else. That somebody else is our industry. Somebody has to provide entertainment to bars and restaurants. We still do it."

Today, Circone said, the big question is how to leverage the operators' unique asset and greatest value -- namely, their exclusive and powerful relationships with some 400,000 U.S. bars and restaurants. He believes operators can generate huge new revenue streams by serving as the conduit for national brands that want to advertise and market to the 18- to 35-year-old customers in their locations.

Okay, you've heard all this before. So have we.

But Circone has some specific, actionable strategies for how operators can become allies and partners with the big entertainment conglomerates and big advertising brands. He also has a track record of working with some of the world's biggest entertainment and hospitality brands to lend credibility to his words.

"There is a specific role that we operators play in this capitalistic landscape," Circone said. "We give [the bar customer] the right to have one more beer, one more moment of fun, very affordably. The music and amusement business is basically selling two-minute excursions into fantasyland. It's 'everyday Disney.'

"We have to take that to an entirely different level now and build our business on the fact that we 'own' the on-premise consumption market," Circone continued. "We must open our minds to new revenue streams: DSL, promotion, advertising, food suppliers. For major brands, we can be the ambassadors to the on-premise market."

Circone is well aware that digital networks are revolutionizing the on-premise, pay-for-play music and games business. At the same time, he knows it's a mistake to focus too much on the technology. Operating success is not about the high-tech steak, he insists; it's about the marketing sizzle.

The marketing pro believes operators are psychologically ready to take the tough steps that may be required to get this industry aligned with modern realities. "I'm now more optimistic about operators' worldview and mentality than ever before," he said. "It's not just that we encourage each other with happy talk at trade shows. I see young operators and young-thinking operators who are ready, willing and able to take the industry to a new level."

If this kind of thinking sounds intriguing to you, read our feature on Circone in this issue. Be prepared to start thinking very differently about the nature of operating -- and about the future of the amusement industry.

See VT's June feature: Circone's Vision For AMOA: Operators Must 'Unionize' To Land Lucrative National Deal.


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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