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Done Deal: PROs, AMOA Sign New Juke Licensing Agreement; Pact Reduces Fee For AMOA Members, But Excludes Digital Systems

Posted On: 12/25/2000

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CHICAGO - After a year of intense negotiations, the Amusement and Music Operators Association signed a five-year agreement with the three Performing Rights Organizations on December 14 that will enable jukebox owner-operators to secure a single music performance license through the Jukebox License Office.

Jim Pietrangelo, chairman of the AMOA Jukebox License Committee, described the agreement as a "good deal for jukebox operators," one that justified the often difficult negotiations.

"The negotiations were long and tough , six meetings in four cities, weekly and sometimes daily conference calls, e-mails and other correspondence," he explained. "In the end, there was substantial compromise by both sides. I am extremely proud of our negotiating team. While it's true that the talks became adversarial at times, my colleagues and I maintain considerable respect for our PRO counterparts."

The agreement, which officially takes effect on January 1, 2001, concludes negotiations that started in late December 1999, when the PROs , ASCAP, BMI and SESAC , notified AMOA of its intentions to terminate the decade-long jukebox licensing agreement. The current license is scheduled to expire on December 31, forcing both sides to work hard to avoid missing the deadline.

Throughout the negotiations, AMOA officials say, two main issues remained at the forefront: new rates for license fees and how to incorporate new technologies, specifically jukeboxes with digital, downloading capabilities.

In terms of new rates, AMOA officials view the deal as extremely beneficial, as the association was able to limit the fee increase initially sought by the PROs. During the negotiations, for example, the PROs lobbied for higher licensing rates, noting that had the original average 1989 license rate of $64 increased by the average of the Consumer Price Increase over the next 10 years, that the 1999 average rate would have been $85 per jukebox.

During the final round of negotiations, the AMOA secured the following JLO rates: first jukebox: $350, with each additional jukebox at $79. The JLO's 2000 fees, in contrast, were $331 for the first jukebox, $63 for the 2nd through 10th jukeboxes, and $52 for all additional jukeboxes.

The agreement also calls for AMOA members, who generally have a very high JLO participation rate, to receive a significant discount, one that compares to the 2000 rates. Members will pay a group rate of $59 for each jukebox, with the exception of the first jukebox, which is $350.

The other focal issue, remote-storage digital jukeboxes, could not be addressed as part of the negotiations. One reason for its omission, according to AMOA officials, was petitions filed by certain jukebox manufacturers that are pending in the U.S. Copyright Office's Rate Court.

The PROs decided that they could not negotiate with AMOA on behalf of the industry while being forced to simultaneously address petitions on identical issues by individual firms that were also being represented by AMOA in the ongoing jukebox negotiations. "As a result of this and other issues surrounding the new technology, this new agreement does not include licenses for digital jukeboxes," the AMOA said in a statement.

As part of the deal, the AMOA will engage in marketing efforts to promote the jukebox category, the JLO license program and licensing compliance. The PROs will support these initiatives by contributing a small amount to the AMOA for each jukebox licensed by an AMOA member. The actual amount contributed in any given year will be calculated according to a formula agreed upon during the negotiations.

The Jukebox License Office will continue to issue the license agreements and certificates, collect fees and maintain records for the program. Jukebox operators were scheduled to receive the new agreements from the JLO by December 20.

The deadline for 2001 licenses is March 15, 2001.

"This agreement certainly makes membership in AMOA more valuable," Pietrangelo said. "I encourage any operator owning jukeboxes to join the association and save on their license fees."

With more than 625 AMOA operator members owning jukeboxes, Pietrangelo added that the negotiations, along with video content legislation, topped the list of the association's most critical issues. He thanked members of the AMOA Jukebox Licensing Committee, including Mike Leonard and past presidents Frank Seninsky, Don Hesch, Dick Hawkins and Dock Ringo, who served as lead negotiator throughout the talks with the PROs.

"I would also like to acknowledge Jim Hayes, who provided great leadership as chair of this committee prior to selling his business this September," he said. "AMOA also wants to recognize and thank the manufacturers who provided their input to, and financial support of, these negotiations: Rowe International, TouchTunes, Incredible Technologies, Rock-Ola, Wurlitzer, NSM Music Group and Ecast."