Success of European operations drives shift to direct sales business model
LEEDS, England -- NSM Music Group Ltd., parent company of Illinois-based NSM Music Inc., said it plans to begin marketing and operating its own digital jukebox music platform in the U.S. The company is now testing its jukebox platform in bars and restaurants in select U.S. markets and expects to officially launch it in the first quarter of 2011.
NSM digital jukeboxes have been in service on four continents for the past seven years. Its Icon jukebox line, which is available in the U.S. on the Ecast network, has been placed in some 10,000 locations worldwide, the company reports. The Icon 2, which is among a half dozen pay-for-play digital touchscreen music systems offered by the jukebox manufacturer, has been designated as the official jukebox for the NSM music network in the U.S.
The Icon 2 wall-mounting box (pictured here) features a redesigned user interface with simplified navigation, an "error-free" touch keyboard, enhanced graphics and better artist imagery, among other features. Icon 2's software also runs YouTube and NSM's new advertising platform.
NSM also announced that it has begun offering its products directly to operators and locations. This distribution strategy, which circumvents traditional coin-op equipment sales channels, will provide the jukebox company with more control over its growth rate following several years of tepid performance "due mostly to the inefficiencies inherent in the coin-op channel," according to NSM chief executive Dr. Gurbakhash Sanghera.
Sanghera reports that NSM has had "tremendous" success in Great Britain, on the European continent and in the Middle East by marketing directly to operators and locations. "NSM's business in the U.S. has been too dependent on forces beyond our control," he said. "Something is wrong when the largest market in the world is your weakest performer. We took a long, hard look at the market, and saw two choices: leave the U.S or adopt a strategy that would bring us success. We are choosing success."
A flat-fee pricing structure for music content will be a central element to NSM's music strategy. NSM vice-president of sales and marketing Geno Giuntoli said the company will provide its music for a flat monthly fee for each jukebox to access the NSM music library, which is said to have millions of licensed tracks.
"Flat-fee music is something operators have been asking for since the introduction of the digital jukebox," said Giuntoli, who is based in NSM's Elmhurst, IL, office. He added that NSM's fee structure was designed to cost less than the revenue percentage rates extracted by other providers doing business in the U.S.
NSM has also extended its contract with Ecast Inc., the San Francisco-based music provider that uses NSM jukebox hardware for its network. NSM's Ecast-powered Icon jukebox will be available exclusively through coin-op distribution and will not be sold to locations.
NSM Music was founded in Germany in 1951 and is now headquartered in Leeds, England. In addition to the UK and U.S., NSM maintains offices in Dubai and Germany, and a website at nsmmusic.com. Among its early innovations was the invention of a mechanism that played 45-RPM records from a vertical stack and used different tone arms for the A and B sides of records. Today, NSM Music administers a music distribution server in the UK. It was the first jukebox manufacturer to be awarded the Phonographic Performance License for dubbing and downloading music in Europe.
Information on flat-fee music can be had by calling NSM's U.S. office at (630) 279-2244.