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Issue Date: Vol. 49, No.5, May 2009, Posted On: 5/25/2009


Adding Value With Coin-Op: Touch Video Efforts Match Latest Bar Trends


Hank Schlesinger
swag@earthlink.net
Bar trends, Merit Entertainment, JVL Corp., TouchTunes, National Restaurant Association, Maureen Ryan, Robert Plotkin, Jones Baker, Angela Paoletta, Ron Greenberg, PlayPorTT, Megatouch, Mike Nickerson, coin-operated, coin-op, videogame, jukebox

It isn't surprising that the restaurant and bar industry has been negatively impacted by the current recession. According to the National Restaurant Association, the small apparent gain (2.8%) in dollar sales during the first quarter of 2009 was more than offset by inflation, and thus represented an actual decline.

"This is the most challenging environment in the past 20 years. The main factor is the economy. For the first quarter of 2009, eating and drinking places -- sales in restaurants and bars -- were higher than the retail sector and grocery stores," said Maureen Ryan, spokesperson for the NRA.

Bars and taverns are doing well, but restaurants have seen a decrease in traffic. "I think during this economic downturn, when consumers have less discretionary spending, they aren't dining out as much as they would like to, or they're just spending less. People haven't necessarily stopped dining out, but they're continuing to pay close attention to that price-value relationship," said Ryan.

According to industry experts, chain restaurants (with a few notable exceptions) and high-end eateries and watering holes have been particularly hard hit. So the location owner's goal remains the same as always, described in colorful language by the bar and tavern industry as keeping the meat on the seat. Aside from the gloomy economy, this has become increasingly difficult in recent years, as smoking bans have proliferated and DUI enforcement has become more stringent.

But there is some good news amid the gloom. For one thing, many locations are eager for new revenue streams, and thus more open to bringing in coin-operated devices and new types of promotions (like leagues) that draw in customers.


"It seems to me that places with a regular clientele can benefit tremendously from coin-op," said Robert Plotkin, a beverage consultant and author on the subject. "A savvy bar owner would perceive coin-op as a viable source of revenue. And everything about a food and beverage operation is about traffic flow ... the jukebox is perfect, it keeps people in their stools longer, it gets them dancing, and a coin-op machine on the bar is really viable in the right setting."

Interestingly, the current environment is producing some fundamental changes in the bar and tavern industry itself. According to William Baker, a principal in the Dallas-based architectural and design firm Jones Baker, bars, taverns and restaurants are currently transforming themselves and adapting to the times.

"What we're seeing with the current economy is people going back to comfortable and casual places – anything that has a warm, inviting kind of vibe. Smaller, more intimate places in the 2,000 sq.ft. to 4,000 sq.ft. range," he said. "People are going back to the authentic. They want a unique place that's not a canned design from a chain. Also, people want to drive less, and stay more in their own neighborhoods."

These types of locations, say hospitality professionals, are the equivalent of what has become known as "comfort food." They are very much the watering hole equivalent of the familiar grilled cheese sandwich or meatloaf with mashed potatoes.

"They keep building pubs, because they're all packed," said Baker. "The beers are on tap and the food is an aspect of it. There's better food with a little more emphasis on it, a little more creativity." And, according to Baker, coin-operated games can play a part in this design to make the places more inviting. "You have to give it the aspects of what makes the traditional corner bar successful," he said. And that means the friendly competition of pool, videogames, darts and other coin-op entertainment.

Plotkin compares coin-op to the complimentary salty peanuts offered at some bars. "Yes, they were free, but they also prompted patrons to drink more. Everything is engineered to greater gains, to the objective," he explained. "I'm saying coin-op is the same thing. It draws revenue in different ways. Not only does it draw revenue through the slot, it keeps people on premise longer."


BEHOLD, THE GREAT OUTDOORS

Smoking bans, sweeping the country, have been painful for many bar owners – but Baker and others see an interesting upside developing. New establishments and those with the capital to invest in renovation have begun adding outdoor smoking patios.

What may have started as an ashtray conveniently placed by the entrance or back door is now becoming a valuable architectural feature, and much consideration is being put into the design of such areas.

"With the whole antismoking issue, we're seeing more places that are trying to be more indoor and outdoor," Baker said. "A third of the space might be outside. And they want it designed so it isn't just some chairs sitting in the parking lot. So you're seeing better heating and better lighting, possibly heaters and fans, misting systems in dry climates and outdoor fireplaces and fire pits."

[There are now 25 states that ban smoking in restaurants and bars: Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Montana (effective Oct. 1, 2009), Nebraska (June 1, 2009), New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, Utah, Vermont and Washington state.]

Bar owners and designers are now treating patios and terraces as integral components of an establishment, rather than just a necessary-but-burdensome convenience for smokers. This makes perfect business sense. Not only do outdoor areas expand the occupancy of the venue – they also allow for another serving station and are relatively inexpensive to maintain once built.

So, where does coin-operated entertainment fit into these current trends in bars? As luck would have it, current games have been designed to address the very changes that are taking place.

Take Merit's RX countertop system, for instance, which is appropriate for indoor and outdoor use. The weather-resistant unit's networkable features also allow patrons to buy songs on the jukebox without leaving their seat.

"We had a request from bars and operators to solve a couple of problems. One was to create a countertop that was more weather-resistant, for bars with outdoor patios," said Merit Entertainment's Mike Nickerson, an on-premise promotions expert. "One of the big drivers in creating the RX was how the smoking bans hurt some of our operators' customers. And of course, when locations are hurt, it hurts our operators, so we created the RX to work in outdoor areas where smoking is permitted. We're trying to help answer the needs of our operators. If our operators' locations are going to evolve and change, then we have to evolve and change too."

The RX has a low profile that allows bartenders to serve drinks over it, and Nickerson pointed out that countertops are particularly well suited to spots where space is at a premium, like a patio.

He added that smart operators are seeing the growing impact of networking a countertop system with other screens in the bar, whether additional countertops or jukeboxes. Regarding Merit's products, he said that the current Megatouch line, which includes the Aurora widescreen, could link to Rowe jukeboxes to enable countertop-based remote song selection and payment.

JVL, another leading countertop provider, also has been paying close attention to new trends in bars and taverns. With the introduction of its Encore system in September 2008, the company entered the high-definition arena in a big way. The new unit features a 22" LCD widescreen and an ever-expanding library of 3D games, with 160 titles already available.

According to industry experts, the Encore is a major step in the right direction. Enhancements such as high-definition screens are neither bells nor whistles, intended to compete solely against other coin-op units on the market. Rather, they are technological necessities that attract players long accustomed to state-of-the-art home systems. For an industry that has lagged behind consumer electronics over the last decade, the manufacturers of touchscreen products are rapidly catching up.

"I think there is an expectation of high-quality graphic presentation in the games outside of their house, especially if you're intent on developing product to appeal to the next generation in the bar market," said Angela Paoletta, JVL's marketing manager. "For us it's a foundation for future enhancement. When we showed the system at AMOA Expo, the common reaction was, 'wow, it's so interactive.' The animations are incredible, so is the sound and music that goes along with the games. It draws you into each game."

According to Paoletta, the Encore's earnings are equal to or above any equipment on the market now, and the company is planning to offer streaming music through the countertop unit starting in fall, essentially turning it into a jukebox. "It will be an all-in-one entertainment system," she said. "We know the staples are music and games, and we're able to deliver both in one package."

Just as JVL, a game manufacturer, is planning to enter the music delivery arena, digital jukebox leader TouchTunes has already made its entrance into the game side of coin-op. Its new PlayPorTT tablet offers a 15.4" touchscreen, wireless connectivity and six hours of playtime. Seemingly tailor-made for the latest bar trends, the portable tablet unlocks from a "docking station" with a credit-card swipe to allow patrons to take it back to their tables, select music and play an assortment of videogames on the LCD. Charges automatically accrue on the credit card.

"You can be inside and decide you want to continue playing a game or music, but sit at a table outside with friends," explained TouchTunes vice-president Ron Greenberg. "You don't have to be sitting at the bar where the game system is bolted down, or standing near the jukebox."

The tablet, said Greenberg, is "restaurant-proof," meaning moisture-resistant and ruggedized. It also includes a previously introduced feature that allows patrons to select music for different zones within the establishment (inside or outside).

Greenberg describes the industry reaction to PlayPorTT, introduced last fall, as very positive and he anticipates growing interest in the unit in the future. He pointed out that PlayPorTT has many of the same capabilities as a touchscreen jukebox. It can be "branded" for chains, and run ads for dining and drink specials or special events. The PlayPorTT can also capture customer information for mailings and surveys.

"To me it's about flexibility -- however you want to use it and wherever you want to use it, it's now available to you," said Greenberg. "The whole idea is to get greater access points and greater flexibility, and let people get the entertainment they want. None of those things was available in one unit before."

The idea of location-specific portability that provides location-specific entertainment seems natural to a generation that came of age with cellphones, MP3 players and BlackBerries. "If this is the way it is right now, we all have to get creative and try new solutions for bringing business in," Greenberg said. "We're an entertainment company now."


Topic: Music and Games Features

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