Juke Box Hero . . .
By Director Wayne Hall

January 30, 2009

Each year towards the end of January I do my best to get to a trade fair in London (called the ATEI) at which the (remaining) juke box manufacturers and operators get together to show their wares, discuss the market, share ideas and talk about the good old days.
 
I use the word “remaining” and mention the last point because whenever I am feeling that things are tough in the music supply business, I think of what the juke box industry has been through during the past decade and I feel much better - well, relatively, anyway.
 
In eight short years since attending the show, most of the leading global juke box manufacturers have changed hands, restructured or disappeared altogether, while many of the operators (the people who buy the juke boxes and place them in venues on a revenue sharing basis) have moved on or seen their businesses shrink.
 
As much as I hate to see any business struggle, the scenario has offered a fantastic opportunity to (hopefully) learn a few lessons.
 
Critically, both the manufacturing and operator sectors of the market were dominated by mature businesses, but during the 90’s new software and digital technology provided opportunities for new players to enter the market - both as manufacturers and operators. Suddenly a juke box was no longer a physically sophisticated product requiring almost unique components - it had become a dressed-up PC loaded with music management software and a “coin box”. Not quite that simple, but you get the picture . . .
 
Furthermore, the new entrants to the market brought different rules of engagement. PC-based systems could run a DJ and background service as well as a juke box, so why not offer the venue most of the cash “take” from the juke box while charging them for the other music services . . . or why not simply sell the juke box outright to the venue, take a one-off profit, and let them collect all the cash?
 
A PC-based juke box could also provide features such as in-house advertising, the scheduling of appropriate songs at specific times of the day (no more Thin Lizzy or Cold Chisel over a quiet lunch), and user-friendly song selection through search-by-artist and genre features. Furthermore, many venue managers could be persuaded to forgo the personal service of an operator visiting them once a month (to check the juke box and split the cash) for one where they could swap over a “crashed” PC within 24 hours and take all of the cash.
 
So the “typical”, well-established manufacturer and operator was faced with a new landscape, one filled with changing technology and expertise, new product and pricing . . . and service-bundling. Tough times ahead.
 
Many simply didn’t know how to cope, with responses ranging from continuing on with business in the same manner (ignoring the new market conditions and hoping they will go away); to "it’s all over" - there’s nothing we can do about it (doom and gloom); to total infatuation with development (technology will save the day).
 
(It's worth highlighting here that over 90% of the new entrants to the market were out of business within 2 years. But incumbent business, particularly those who take one of the above positions - tend to focus on a few success stories. They seem to forget that they have the most important assets of all - knowledge and clients).
 
During this year’s ATEI I asked the one remaining person in what used to be one of the world’s leading juke box and vending machine manufacturers (which had been in and out of bankruptcy since 2000) what he thought was the reason behind the “bad times” at the company:
 
“It’s pretty simple . . . it’s always been the same thing. We become infatuated with inward-looking development of product and forget to talk to our customers. We become disconnected with them, and we end up with product that doesn’t work for them . . . lots of features but not much relevance.”
 
In contrast, when I asked the Managing Director of the only manufacturer to have continued without any change to offer up the key to their success,
he said:
 
“Our people . . . and we have great people . . . they connect the business - it’s service, it’s operations, it’s product - with the customer. There is a desire in our business to develop for development’s sake . . . the creative part, which is healthy . . . but we keep it under control. We develop for the sake of our customers, and we are talking to them all of the time.”
 
As for the operators who are still about, they all had the same message, summed up nicely by a guy who’d been in the industry a long time:
 
“I’m 72, and while everything’s changed, nothing’s changed. We don’t sell juke boxes (or pool table or games machines) . . . never have. We sell relationships . . . and the one’s that get that do very well.”
 
So, stringing this all together (as best I can), and assuming that these lessons are transferable, it would appear that if you do your best to have people who are passionate about your product and capable of building meaningful relationships with your customers, then you can set up an efficient and powerful process for determining changing customer needs (which in essence are a reflection of changing market conditions). If you can then ensure this feedback is channeled into the product and service development areas of your business in such a way that the relevant features are identified and integrated into your product and service offerings, then you will go a long way to “future-proofing” your business.
 
Of course, it’s not always that simple, but the people still manufacturing and operating in the juke box industry are pretty unanimous about the benefits of this approach, whatever the business . . .
 
And the others who possibly don’t agree? Well, they’re not about anymore . . .

 

Wayne Hall
Director

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