Based on the results of a new jukebox market survey released by AMOA last month, the music sector is “the bright spot on the route” for many operators today. So says Russ Mawdsley, chairman of the AMOA jukebox licensing subcommittee. Yet, he said, jukeboxes also face a couple of big problems…and some strong opportunities.
Problem one, the traditional jukebox market is shrinking as “coin-op unfriendly” corporate chain locations replace mom & pop bars nationwide. “Given the state of the bar and tavern industry,” Mawdsley predicted, “it also seems inevitable that our overall market for jukeboxes will continue to shrink.”
Problem two, competition from hi-tech alternatives, iPods and satellite music primarily, is far more widespread than AMOA had previously believed. “I was somewhat surprised by the extent of inroads made by alternative music sources,” Mawdsley admitted. This problem is not confined to a few big cities; it’s also in rural areas nationwide. Satellite radio is present in 27.8% of the locations in which jukeboxes are operated, while MP3 players are also used in 13.4% of locations, says the survey.
In an interview with VENDING TIMES, published in this issue, Mawdsley calls for the industry to take aggressive action to combat both of these problems. “Given the ongoing changes in entertainment technology,” he said, “we’ve all got to look at new ideas and maybe open doors [to new types of locations] that we never considered before. Changes are so rapid, sometimes it is difficult for us to react. We are used to working on a slower scale than other industries and we have to get up to speed on that.”
Mawdsley also said: “There does seem to be calcification in a declining [tavern market], yet downloading jukeboxes also open opportunities outside that market. We as operators must get ourselves and potential locations to set aside previously conceived notions of what a jukebox is and where it should be.”
Bravo, Mr. Mawdsley. You have forthrightly described the problems and pointed the way to possible solutions. Now, what specific steps can the industry take to turn those possible solutions into real-world strategies and revenue streams? The oldest business advice in the world is to find a market where there is a need, and fulfill that need. Jukeboxes are an ideal solution to problems now faced by two of America’s best-known, and fastest-growing, chain accounts: Starbucks and Dunkin’ Donuts.
Starbucks has begun selling CDs, but entertainment division president Ken Lombard noted last month that “We are connecting with customers who no longer have a music experience…Ours is a focus that goes beyond the top 40, and we are digging deep to try to find good music.” Lombard also said that iPods and other portable music devices have become an important part of the consumer lifestyle…and this represents a challenge for the Starbucks music program.
“Customers want to bring their devices into our stores,” he said. “We don’t have a solution today, but we are committed to finding one…We are continuing to figure out how to create a world-class experience for our customers.” A Los Angeles-based team will begin addressing that problem this month. Sounds like an ideal opening for TouchTunes, Ecast and Rowe/AMI, three companies that pride themselves on providing the uniquely customized level of individual choice that Starbucks patrons crave…especially if they plan on upgrading to MP3 point of sales services.
Meanwhile, Randy White of White, Hutchinson Leisure & Learning Group reports in his latest Leisure e-Newsletter that Dunkin’ Donuts is about to expand its current 6,800 U.S. location chain to 15,000 stores by 2010. DD executives desire to upgrade their atmosphere, increasing the “fun yet unpretentious” ambience preferred by loyal customers. Could there be a better opening for the many 45 and CD jukeboxes that will soon be “bumped” by downloading machines? The nostalgic appeal of low-tech fits right in with Dunkin’ Donuts’ theme. Will somebody please make a phone call and set up an appointment with CEO Jon Luther?