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TouchTunes And Calendar Organization Introduce National Jukebox Day; TouchTunes CEO Looks At Industry's Future

Posted On: 11/8/2016

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TAGS: jukebox, National Jukebox Day, TouchTunes, Charles Goldstuck, National Day Calendar, music licensing, digital downloading jukeboxe, Jukebox Selfie Contest, TouchTunes jukebox credits, jukebox history, Louis T. Glass, first coin-operated phonograph

NEW YORK CITY -- TouchTunes in partnership with National Day Calendar announced that the Wednesday before Thanksgiving has officially been designated National Jukebox Day. The occasion will be observed each year on the fourth Wednesday of the month, the day before Thanksgiving, which TouchTunes identifies as "one of the biggest bar nights of the year as Americans flock to their hometowns for the Thanksgiving weekend." This year's National Jukebox Day will be celebrated on Nov. 23, 2016.

To get National Jukebox Day off to a fast start, TouchTunes will call attention to the inaugural observance with promotions for operators and patrons of its networked digital downloading jukeboxes. The Jukebox Selfie Contest will encourage users to post a photo with a TouchTunes jukebox to Twitter or Instagram for a chance to win a year of free TouchTunes jukebox credits. In a parallel program, TouchTunes plans to crowdsource song recommendations for a National Jukebox Day playlist, enabling social media fans and followers to help curate an ultimate list of "jukebox anthems."

Finally, TouchTunes is assembling a Social Media Fun Kit to help operators, locations and patrons alike to get involved in ensuring that everyone knows it's National Jukebox Day. "Our Fun Kit will feature a variety of customized social media and in-venue assets available for download, allowing customers to share their jukebox love," the company explained.

That the first celebration of National Jukebox Day falls on Nov. 23 is historically appropriate. Jukebox historian John Krivine claimed that Louis T. Glass demonstrated his first coin-operated phonograph in San Francisco's Palais Royal Restaurant on Nov. 23, 1889. This instrument was a precursor of the machines that -- bolstered by reliable motors, disc selection mechanisms and vacuum-tube amplification, -- launched the modern jukebox industry in the 1920s.

Opportunity And Challenges Ahead

TouchTunes, Charles Goldstuck, National Jukebox Day
Charles Goldstuck
Flash forward 120 years, the Internet jukebox remains a central part of the music scene in bars and taverns all over the world, thanks to the development of new products and services that have kept pace with consumer trends, and has sometimes been ahead of them. But TouchTunes chief executive Charles Goldstuck cautions that the cost to stay on top of technology trends and the increasing complexity of music licensing structures in the digital era are applying increasing pressures on the jukebox industry.

"Operator earnings in most amusement machine categories have been decreasing for the past seven years," Goldstuck told Vending Times. "But music has been the exception, with average weekly revenue generated by TouchTunes jukeboxes increasing over the same period, despite difficult industry conditions, and the significant increase in the number of TouchTunes locations. We were able to achieve this by consistently investing in new products and services."

TouchTunes offers two smart jukebox systems that run on the latest version of its Open Stage operating system. Virtuo, its flagship box, was introduced in 2011, and the compact Playdium two and a half years ago. The TouchTunes mobile app, which is compatible with the company's entire North American fleet of 65,000 boxes, has been downloaded over 5.7 million times and has about 2.2 million active users.

One of the biggest challenges facing the industry is the steady rise of music licensing fees. TouchTunes and other jukebox music providers are required to license music rights from public performance organizations (ASCAP, BMI, SESAC and GMR), music publishers and record labels. "Music licensing rates in general have increased significantly as the music industry has transitioned from traditional CD sales to digital and streaming models," Goldstuck said.

The TouchTunes chief executive said the upward movement in licensing rates for jukeboxes will also continue, just like it has for streaming and other digital services, affecting companies like Pandora, Spotify and Apple. In today's market, the music industry actively looks for high royalty payments. Of every dollar that Spotify brings in, according to music industry analysts, about 75¢ goes right back out in the form of payments to labels and publishers.

Jukebox operators have in general been shielded from these fees since the introduction of the first digital boxes in 1999. TouchTunes, for its part, did not change the subscription rate charged to its operators during the first 12 years its boxes were online. However, the latest round of music fee negotiations with the licensing community will likely again result in higher royalty rates and will affect the entire channel.

"The music licensing dynamic for the jukebox industry is getting more daunting," Goldstuck said. "Traditional coin-op, which relies heavily on music, will be impacted by our new licensing reality."

Goldstuck said TouchTunes will continue to invest in research and development, and plans to launch a new suite of products in the next 18 months. Operators will get a first look at the new developments before the second annual National Jukebox Day, which will be observed on Nov. 22, 2017.