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Circone's Vision For AMOA: Operators Must 'Unionize' To Land Lucrative National Deal

Posted On: 6/26/2011

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Amusement and Music Operators Association, amusement machine operator, jukebox operator, coin machine business, amusement business, amusement vendor, vending machine business, arcade game, Circone + Associates, Brad Circone, BJ Novelty, Golden Tee Golf, Ohio Coin Machine Association, Shaffer Distributing, Shaffer Services, TouchTunes, Musicati, AMI Entertainment, coin-op news, bar advertising, location-based marketing

CINCINNATI -- An industry that often seems fiercely determined to remain stuck in the 1940s has issued an unmistakable sign that it's finally ready to join the 21st century -- not only in terms of technology, but also in terms of marketing, product positioning and business models.

In February, the Amusement and Music Operators Association announced that it had put Circone + Associates, a Columbus, OH-based advertising and marketing firm, on a monthly retainer.

The national association of amusement machine and jukebox owners and operators intends to forge a lengthy alliance with C+A because AMOA leaders are hopeful that Brad Circone, the agency's founder and president, has the ideas, skills and relationships that can be instrumental in taking operators into a prosperous new era.

AMOA president Donovan Fremin, Delta Music Inc. (Thibodaux, LA), said a key assignment for Circone and his team was to "explore partnership and sponsorship opportunities, with the goal of offering greater value to AMOA members."

That may have been a polite way of saying, "It's high time we had a revolution in this business and Circone is the guy we've picked to lead the charge."

So who is Circone -- and what kind of revolution is he planning for American operators? To find out, VENDING TIMES spoke at length with the marketing man, exploring his background and his vision of the future of operating.

Brad Circone
PHOTO: Brad Circone is founder and president of Circone + Associates, a Columbus, OH-based advertising and marketing firm with experience inside and outside the coin-op industry.

Circone is the son and grandson of Midwestern operators, a man who grew up moving and installing Pac-Man machines and other games, recovering pool tables and counting quarters for Charie's Amusements (Columbus). He is also a former rock musician and successful recording artist who eventually segued into marketing and advertising with his own agency, but never lost touch with his coin-op roots.

"I want to be able to learn from other industries and bring that innovation to coin-op," Circone says today. "I want to stay in tune with coin-op because I love it. I have what I call 'noble equity' from my father and grandfather sweating a quarter at a time on the street to put me through college. It's humbling."

Yet Circone's unique qualifications to lead an "operator's revolution" don't stop with his coin-op past. His professional experience bridges the gulf between the often-insulated world of the amusement industry and the vastly larger worlds of hospitality and entertainment at the highest corporate levels.

Circone + Associates has worked with numerous coin-op organizations, including BJ Novelty, Global VR, Incredible Technologies and Medalist Marketing Co., along with Merit Industries (now AMI Entertainment Network), the Ohio Coin Machine Association, Shaffer Distributing, Shaffer Services, TouchTunes and uWink. C+A also helped to create Musicati, a Web-based service that allows independent artists to add their music to jukebox playlists on the AMI's music network.

Beyond the amusement industry, Circone's agency has also provided topflight marketing services for leading national breweries (Coors and Anheuser-Busch), hospitality groups, technology firms (AT&T and Nextel) and entertainment conglomerates (Time Warner and Geffen Records).

With this unique range of experience and understanding, Circone may be the ideal man to help U.S. operators recapture the close working partnership they used to have with the entertainment industry 75 years ago -- back when jukeboxes were the preferred way for music labels to break a new tune.

What would be the 21st century equivalent of that coin-op and entertainment partnership?

It might resemble something like a long-term alliance between the big digital content firms (plus adult beverages suppliers) and a united, nationwide "army of operators" who control millions of networked monitors in tens of thousands of bars and restaurants.

Together, this alliance could bring a high-saturation, high-impact message to 25 million consumers ages in that hard-to-reach 18-35 age bracket ... the younger demographic that doesn't watch TV or read newspapers and may not be as often reached through traditional advertising channels.

The idea of such an alliance sounds great, of course, and this marriage has been attempted several times before. But it has never been created successfully on a large enough scale to bring the entire music and games trade back to the vitality and profitability of its glory days.

Why not? Several key obstacles stand in the way of realizing this vision.

As a class, the nation's 2,000 or so amusement and music operators remain fragmented, dispersed and stubbornly independent. There is no easy way for a national advertiser or content provider to make a single, clean, simple deal with all of them at once that would provide nationwide coverage.

More than one aspiring deal broker has walked into the offices of a Sony, Disney/ABC or GE/NBC/Universal and painted a glowing picture of a comprehensive national alliance comprised of operators, locations and content providers.

Typically, the executive on the other side of the desk starts by getting very excited about the possibilities.

But he or she quickly deflates upon learning that (a) the entire American amusement industry can leverage fewer than one million monitors; and (b) even leveraging 250,000 monitors would require making separate deals with hundreds, maybe more than a thousand, individual operators.

Circone thinks AMOA can change all this -- and should.

"This is exactly the key role for AMOA to begin to play," Circone told VT. "AMOA can be a consolidated force that represents this loose union of entrepreneurs [i.e., the operators]. AMOA as a flagship has to become an emblem for the future. Just as individual workers have unions to unite them and give them power and leverage -- numbers, economic, connectivity -- so do we as operators need a unifying body as they are connected to bar owners."

AMOA's decision to retain C+A is a strong indication that the nation's leading operators are ready to band together for new levels of cooperation that would make them more attractive partners for entertainment and advertising giants.

"AMOA can represent lots of operators [who then speak with a single voice] so big national accounts don't have to deal with thousands of individual operators," said Circone. "I joke with operators and tell them I feel like we [Circone + Associates] are trying to manage the ever-scattering Indian tribes. We'll focus on how to build leagues and promotions through our entire industry, integrating every gaming device [into a unified network]."

If operators "unionize" under the AMOA banner, serious obstacles would still remain. The "operator union" would also need a credible liaison to the corporate world -- a representative who can speak the language of 21st century marketing, branding and advertising. This is a language that can sound very foreign -- and perhaps a bit highfalutin -- to the typical operator. Circone, however, excels in speaking this very language.

"For AMOA, I'm very interested in what branding, advertising and marketing can do for the industry," he told VT. "I think AMOA can act as a true lifestyle connector for lifestyle branding. AMOA has that power. We can reach outside the music and amusement industry to forge relationships with [national beverage, hospitality and content] brands that care about 'owning' the on-premise market, because we do."

Circone has come up with a compelling way of describing the opportunity that AMOA members offer to advertisers and content firms, through their access to locations and customers. Using language that resonates with marketing professionals in the upper echelons of corporate America, he said:

"We're focused on creating a connection between casual consumers on-premise and their abilities to participate in tiny, two-minute excursions through our game devices. We view bars and restaurants as retail outlets for Megatouch, jukeboxes, Silver Strike Bowling and other classic game and music delivery systems. We [operators] split the money with the locations, but we have the right to sell content in those moments of entertainment. Branding, marketing and advertising connect all those things to human lifestyle."

Circone may speak the language of corporate marketing, but he has not forgotten how to speak the language of operators. He takes pains to connect these millennial marketing concepts with the traditional coin-op outlook from its golden era of decades ago.

"If you look at the heyday of the industry, and even when my grandfather was buying the first pinballs and shuffle alleys, content migration and mobility was everywhere," he said.

Warming to his theme, Circone continued: "We live in a world where everything is branded. The United States has a brand, Barack Obama has one and Valley-Dynamo has its brand. We are connected through our perceptions of each other. In the AMOA Notre Dame executive management classes, I give sessions on branding. The greatest branding and participation model ever created is Facebook, which assimilates people's wants and needs in a democratic way. Eating chicken wings, drinking beer and playing Golden Tee Golf follows the same human decision-making process."

The fact that entertainment giants typically think in terms of reaching millions of media outlets at once is not an insurmountable obstacle to doing a deal with AMOA, Circone said. If the demographics of a small group of locations match the target markets of advertisers or content providers, then a deal can be attractive with well under 500,000 visitors, he claims.

"Sometimes you can do lucrative deals with one-off venues that have only 300,000 visitors a year," he said. "I am confident those kind of deals can happen [for AMOA's collective membership]. Frankly we've done deals on certain routes that are above regional monies. Anything from $50,000 to $1 million is a national branded deal. The key is assimilation, which means understanding the brand you are targeting and how that brand needs us, the operators, and locations that give them access to a desirable demographic slice of the consumer market."

Circone is aware that the metric which may be most important to some marketers is not the absolute number of screens or locations that operators control, but the aggregate number of "consumer impressions" that operators can deliver. In other words, how many consumer eyeballs a week will see an ad or video clip delivered over a nationwide network of AMOA member-controlled jukeboxes or videogame screens?

Circone would not be the first to argue that the amusements industry can easily deliver millions of consumer impressions per week through its collective presence in U.S. locations. It's simply a matter of delivering these consumers as a package or breaking down this collective market into submarkets, with the appropriate demographic slices served up to meet the needs of particular advertisers or marketers.

"Maybe we [AMOA] don't have a Budweiser-size budget," said Circone. "But we do have the ubiquity of entertainment in up to 400,000 permit holders [locations] across the country. As a collective force we supply the greatest volume of on-premise entertainment in America. That should change our ability to sell entertainment across this distribution platform."

Circone is genuinely enthusiastic about the potential for AMOA to lead operators to a transformative moment that could redefine the structure of the industry in many ways.

But he is also aware that the final obstacle he must overcome is an old-fashioned mindset among some operators. The industry is currently experiencing "a sort of operator Darwinism," he said. Today's business environment favors not just the survival of the fittest (those with the most machines or fattest cashboxes under the old model) but also the survival of the most flexible and forward thinking.

"There is a different operator out there right now and it's exciting as hell," Circone said. "This operator is new-thinking. He understands the value of on-premise participation through promotion. He understands this value as an essential component of his business, not as an afterthought. He understands mobile content ... We have to learn how to promote lifestyle, not just place machines."

For the past 20 years, some farsighted operators have been forecasting that the amusements and music industry could be drastically reshaped, or at worst replaced, by the advent of digitally downloaded entertainment content.

Some of these visionary industry members have predicted that operators would become minor technicians working for Time Warner. Others warned that many operators -- perhaps most -- could simply be wiped out.

Brad Circone agrees that the entertainment landscape has shifted dramatically and will continue to shift. Nevertheless, he sees a vital and ongoing role for the operator of tomorrow -- as long as that operator is willing to change how he thinks, how he defines his business and the type of services he ultimately provides.

"If there is a bigger canyon before us today," he said, "then we must grow wings and fly over it."