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EDITORIAL: Coin-Op Needs A 'New Deal'

Posted On: 10/13/2008

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As of this writing, Congress was busy passing a $700 billion economic rescue plan. By the time this issue mails, America will be 21 days from electing a new president. Also this year, "Web 2.0" -- the user-generated, social-networked, collaborative model of the Internet -- has quietly gone from controversy to consensus. Arguably, then, we're looking at a fresh start... a "New Deal"... in New York City, Washington, DC, and Silicon Valley.

Maybe it's also time for a fresh start in Chicago, capital of the American coin machine industry. This prompts the question: What would a "New Deal" for amusements look like? What kind of fresh start could jolt this beleaguered industry back to growth and vibrancy? Here are a few ideas.

1) The "Coin-Op New Deal" should deliver more transparency. According to The Wall Street Journal, one great way to wreck a market is by withholding vital information: "What accounts for the credit crunch can be reduced to a single word. Not 'greed,' which also exists in stable markets. The word is 'information,' the absence of which has put taxpayers on the hook for billions."

Today, the amusements industry's need for transparency is greater than ever, yet the supply of information is arguably worse than ever. VT provides statistical data with its annual Census of the Industry; but frankly, we could use much more cooperation. Equally troubling, our trade associations collectively do very little to create and report useful statistics for members and the industry.

2) The "Coin-Op New Deal" should offer more free stuff. This may come as a shock, since manufacturers (and trade magazines) constantly urge higher play prices. But the amusements industry should find a way to ride the rising wave of free giveaways that is flooding the consumer market.

This wave starts with the Internet, which offers free public access (Wi-Fi hotspots), free entertainment (84 million videos on YouTube), free serious content (Wikipedia, The New York Times news) and free utilities (Google, Yahoo, etc.). But giveaways have also become standard marketing tools for restaurants and retailers.

The "free revolution" has profound implications for traditional entertainment. For example, Steven Speilberg and George Lucas claim the old studio model is broken. Big-budget movies that profit mostly from box-office ticket sales will soon vanish, they say. Hollywood can't compete with free online distribution. If Hollywood can't beat "free," how can the amusement machine industry?

We can't. Whether it's giving away free tokens to FEC visitors or free games in street locations, this industry may well find itself someday offering much of its entertainment for free, and making its money from some ancillary revenue stream. Advertising? Premium services? Sales of related items like food and drink, or t-shirts, or game software and consoles? Nobody knows. But count on it, the most forward-looking minds in the business are already considering these things.

3) The "Coin-Op New Deal" should deliver more bipartisanship. This year's presidential race has largely been shaped by the public's disgust with old-fashioned party wrangling. The result: two maverick candidates, and abysmal poll numbers for Congress (below 20% approval).

In a refreshing contrast, AMOA, AAMA and IALEI have achieved a wonderful record of cooperation and harmony in the past dozen years (despite sticking points like the "one show" controversy). What's needed is still more of everything: more cooperation, more communication, more negotiation, more joint ownership, more cross marketing and more mutual attendance at each other's meetings, functions and trade shows. If we can't achieve industry unity by vote, maybe we can achieve it by osmosis.

Would this "Coin-Op New Deal" cure the amusements industry? No, but it would sure help. As the original New Dealer himself declared way back in 1932: "The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something."