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TouchTunes Tyranny
Why the digital jukebox revolution is revolting
By Chris Busby
We Americans are funny about our freedom. We celebrate it, sing about it, and are prepared to defend it even if we have to annihilate life on earth in the process. But vigilant as we are against threats to our personal liberty, we keep letting little things that undermine our freedom of choice slip by, especially if it’s convenient to do so.
Case in point: the TouchTunes digital jukebox.
Just as digital formats and devices like MP3s and iPods are usurping compact discs as the preferred means to listen to music on headphones and at home, digital jukeboxes are replacing CD jukes in bars, restaurants, billiard halls and bowling alleys.
TouchTunes is the dominant company in the so-called “out-of-home” entertainment market, with over 40,000 jukeboxes in its North American network. Over 700 million songs are played on TouchTunes annually, making it the second-largest provider of digital music in the world, behind Apple’s iTunes system.
There are a few other companies that make digital jukes, but TouchTunes has the New England market “pretty much locked up,” said Mike Lano, owner of Lanco Vendors in South Portland. Portland is no exception: from Amigos to Yankee Lanes, TouchTunes is the only digital jukebox to be found.
At first glance, TouchTunes appears to offer a far more extensive choice of music than was ever available before. CD jukes are typically limited to holding 100 albums. TouchTunes’ screen displays upwards of 2,000. But as soon as you select one, it becomes clear something is amiss.
Instead of a listing of every track, the screen offers only one or (occasionally) two songs from the album — invariably the tune you’ve heard 1,000 times before. If you want a different track, you’ll have to spend an extra credit to temporarily download it to the machine. (In advertising, this sort of manipulation of the consumer would be called “bait and switch.” Among patrons interviewed for this article, the most common term for this practice was “bullshit.”)
The TouchTunes jukes around here give you three credits for $1 — vending companies have some leeway to set the cost per credit — so if you want to hear a second song that requires downloading, you’ll have to feed the box another buck. Listeners of even moderately discerning taste will often spend $2 for three songs. CD jukes typically give you seven credits for $2, making TouchTunes more than twice as expensive.
TouchTunes’ machines are always connected to the Internet. The cost of the electricity necessary to download a song is negligible. So why the extra charge to hear a track already on the system?
“I’d have to defer pricing policy to some of the sales people,” said Marc Selsen, TouchTunes’ vice president of corporate marketing. “In general, we try to make our music available in a competitive way that works for us, our customers [vending companies] and our end users.”
Flimsy though it may be, the justification for charging music lovers twice what they were accustomed to spending before is the convenience of being able to access more songs. TouchTunes has licensing rights to a library of about 2 million tunes, approximately 200,000 of which are available on its system at any given time. By comparison, a CD jukebox with 100 discs puts only about 1,200 songs at your fingertips, and the selection tends to be changed much less often.
But the impression that TouchTunes gives the public exponentially more choice in music than its CD counterpart is illusory. The reality is exactly the opposite.
Assuming standard licensing practices are followed, the owner of a CD jukebox can, in theory, make any compact disc ever produced available to his or her customers. The proprietor, or jukebox vender, simply buys the album and puts it in the machine. The 200,000 songs TouchTunes makes readily available on its system constitute a tiny fraction of the music available on CD.
To get a sense of how small TouchTunes’ selection is, consider that hundreds of new albums are released every week, according to Jim Pinfold, a buyer with Bull Moose Music in Portland — and that’s not counting imports or CDs distributed locally by aspiring musicians.
This is how TouchTunes threatens our freedom of choice. The decisions that determine which songs we can hear on their jukeboxes are not made based on the quality of the music itself. Rather, it’s all about money: which tunes are popular enough to generate enough plays to generate enough profit for TouchTunes.
Granted, the same standard applies to CD jukeboxes: discs that don’t get played are replaced by those that do. But those are decisions made by individual bar or restaurant owners, based on their clientele’s feedback. TouchTunes adds or subtracts songs based on data collected by its national network of jukeboxes, and there are other considerations, like deals struck with individual labels, some of which have partnered with TouchTunes to make songs or albums exclusively available on its system for a limited time.
Just as corporate interests, consolidation, and the technology of automated playlists have sucked the soul out of commercial radio, TouchTunes dictates and homogenizes the experience of listening to music on jukeboxes, stifling creativity and shutting out artists working either locally or outside the mainstream.
Equally disturbing is the fact that the decision to replace a CD jukebox with a TouchTunes machine is not necessarily a conscious choice anymore. As the older machines inevitably break down and need repairs, bar and restaurant owners are increasingly being told they have no choice: it’s TouchTunes or nothing.
The night the music died
To patrons of the legendary Portland punk-rock club Geno’s, the death of the old CD jukebox last month was a tragedy second only to the passing of Geno himself three years ago.
Perhaps more so than any other jukebox in town, the one at Geno’s reflected the tastes of its clientele and the types of music played on its stage over the past quarter-century. Punk rockers rubbed shoulders with The Beatles and Stones, old-time country crooners stood alongside soul singers like Al Green, and albums by local bands like Pigboat and Covered in Bees took their place among the greats.
The new TouchTunes jukebox effectively erased all that character.
Bartender Erin McNally was working her very first shift at Geno’s the night the music died. Three weeks later, she told The Bollard, “People are still coming in saying, ‘Oh my God!’”
McNally, 31, is better known as McNallica, the stage name she’s used to compete, quite successfully, in several regional and national air-guitar competitions. TouchTunes has been a sponsor of some of those competitions, so McNally is more familiar with the company than most Portlanders. Her opinion of their machines is mixed.
“I do like that you can search and find some pretty obscure stuff,” she said. But the “stupid shuffling” feature bugs her — songs are not played in the order they’re selected. (Another feature that annoys many TouchTunes users is the option to have one’s selection played next regardless of how many songs have been purchased before. As long as someone’s willing to spend an extra credit to do so, they can bump everyone else’s songs all night.)
The new jukebox at Geno’s is “completely a rip-off compared to the old one,” said McNally. But being behind the bar has its advantages. “I do like the skipping feature,” she said. Using a remote control, staff can skip songs patrons have selected if they or other customers don’t like what’s being played. “They [skip songs] all the time” at Amigos and Norm’s Downtown Lounge, McNally said.
“The good thing about [TouchTunes] is you can play pretty much anything,” a waiter at the Downtown Lounge remarked. “The bad thing is you can play just about anything.”
“You have to be really drunk to put enough money in this jukebox to be happy with it,” said Bart Joy, 50, a musician and painter who’s been a regular at Geno’s for years. “You’ve gotta drink a lot to think you’re getting a good deal … The fact is, we don’t have a choice anymore.”
Geno’s owner J.R. D’Alessandro said that when the CD jukebox broke down, that’s what he was told by the woman who services the machine: TouchTunes is the only option. “You can no longer get the CD jukeboxes. You can’t get the parts for ’em, or the parts aren’t readily available,” D’Alessandro said. “It’s the end of an era.”
Vending company owners agree.
“I really don’t believe you can buy a new CD [jukebox],” said Lano of Lanco Vendors, who’s been in the business for four decades. And repairing them is also becoming a challenge. A Massachusetts company called New England Coin Op, which Lano said is the largest wholesaler of jukeboxes in New England, laid off its lone CD jukebox repairman earlier this year, he said.
“They figured everyone’s gone digital,” said Lano. “The support is gone for CD players.” (The Bollard was unable to reach New England Coin Op for confirmation before deadline.)
Lano and other operators said the feedback they get about TouchTunes from bar and restaurant owners has been overwhelmingly positive. And the operators themselves have no complaints.
TouchTunes gets 20 percent of the take from every jukebox — a profit-sharing arrangement that didn’t exist before the digital era — but the New York-based company pays the royalty and licensing fees (operators previously had to pay for licensing). TouchTunes jukeboxes and their attendant sound systems cost $5,000 to $7,000, a few grand more than CD jukeboxes, but on balance the digital machines are more profitable because patrons pump more money into them.
“Unfortunately, we’re in an industry that’s kind of stale,” said Tom Oliver of Oliver Vending and Music Systems in West Scarborough, who’s been in the business 40 years. “It’s kind of been stuck on the quarter — that’s the general coin of choice in our industry. It’s hard to get off that, hard to get people to spend more money.”
TouchTunes “is the one kind of shining light we have,” Oliver said. “People are willing to spend more money.”
D’Alessandro said he’s gotten a lot of complaints from customers upset the old jukebox is gone, but that hasn’t stopped them from playing the TouchTunes machine. “Everybody’s bitching, but meanwhile they’re over there stuffing money into it as they’re bitching.”
Kelsey Wood, a 28-year-old restaurant worker, said it’s not uncommon for her to spend $10 a night on TouchTunes, particularly when her pool league is playing. “It can get pretty pricey if you’re using the option to put your song on first,” she said, but she likes the fact TouchTunes offers more songs than CD jukes.
“It’s easy to get tired of the CDs if they’re not changed,” Wood said. “In our generation, we’re so used to having iPods. People are so spoiled now. We can’t imagine putting a CD in a CD player and playing it, which is sad.”
One of the places Wood’s pool league plays is Ernie’s Pool and Darts on Forest Avenue. Owner Dona Hachey is among the few still holding out against the digital jukebox revolution.
“I won’t get one,” Hachey said of TouchTunes. “I think they’re a rip-off.” Hachey said her customers haven’t been asking her to switch. “I’ve had people come in and say I’ve got the best jukebox,” she said proudly.
During the interview at Ernie’s, Hachey’s CD juke started playing a song it selected at random — “King of Pain,” by The Police — which it does every 15 minutes or so. She noted that TouchTunes jukeboxes remain silent until a customer plays a song. “That thing doesn’t give you anything,” she said. (Full disclosure: Hachey’s sister, Joline, is a former employee of The Bollard, and both sisters formerly worked with this article’s author at Casco Bay Weekly.)
Geno’s is trying to customize its TouchTunes juke to satisfy its clientele. D’Alessandro said he can have six songs permanently downloaded to its hard drive each day at no charge (songs on the hard drive, which can hold about 2,000 tunes, cost only one credit to play), and other songs are being removed.
“I’ve got a clipboard going right now” for customers’ requests, he said. “I’m bouncing the Britney Spears and American Idols and all that garbage that’s on there, and little by little putting on what people want to hear.”
Give the people what they want
The question of why some albums and artists are available on TouchTunes while others aren’t has undoubtedly launched many a heated barside argument.
Musical taste is clearly not guiding the company’s decisions.
Take TouchTunes’ stock of alternative rock, for example. Four largely forgettable David Byrne solo albums are available in whole or in part, but the first four Talking Heads records are M.I.A. There are five full albums and assorted singles by flash-in-the-pan Maroon 5, but none by the critically lauded indie-pop band The Magnetic Fields, or the immensely influential Big Star.
TouchTunes offers pretty much every Sonic Youth album, in its entirety, including the highly abrasive, all-but-unlistenable early stuff like Confusion Is Sex. Yet many of Sonic Youth’s equally popular peers, such as Fugazi, Yo La Tengo, Robyn Hitchcock, and Super-chunk, are nowhere to be found.
In certain cases, big holes in TouchTunes’ library are due to its inability to secure digital licensing rights to an artist’s work. That’s why The Beatles are missing, and why there’s only one Bob Marley album and one Jimmy Buffett release on the system at present.
In other cases, there’s no arrange-ment with a specific label. To cite another indie-rock example, Guided By Voices’ breakthrough album, Bee Thousand, released on the tiny Scat Records label, is not on TouchTunes, but the next five GBV full-lengths, all on larger labels, are.
Who’s compiling this catalogue?
“They’re people who have a long history in music, both on the production side and the technical side,” said Selsen, the TouchTunes VP, “so they understand music not just on the commercial side, but how it works, how to measure it, how to compare one type of sound to another.
“Many of them are musicians,” Selsen added. “That’s not a prerequisite, but they tend to like music, and it comes out.”
Selsen said TouchTunes’ music department “is constantly trying to make sure we have the right mix of genres and different types of music for all our different markets” — bars, restaurants, family-oriented venues. “We’re always pulling some music off the catalogue and replacing it with both back catalogue [songs] and current hits.”
If enough people demand a song that’s not in the catalogue, TouchTunes will attempt to secure the licensing rights and add it — Selsen cited a song about the Cubs that suddenly got popular in Chicago as an example.
Having a bunch of angry bikers from Texas on your side apparently doesn’t hurt, either. That’s how Mean Gene Kelton & The Die Hards got their big break.
According to a promotional press release posted on Kelton’s Web site, Mean Gene’s song, “My Baby Don’t Wear No Panties,” became a regional hit on CD jukes in biker bars across southeast Texas. “Biker Babes all along the Texas Gulf Coast have been known to dance on the tables and even fling a pair of panties into the applauding crowd every time the song plays,” the release said.
Problem was, the song was not available on the TouchTunes jukes that had begun to replace CD boxes in the area. “Realizing a substantial loss of revenue and inundated with complaints from customers,” the release continued, jukebox vendors “petitioned” TouchTunes to add it, and the company agreed.
Today, there are two full-length Mean Gene Kelton releases on the system, so listeners nationwide can also hear such crowd-pleasers as “Texas City Dyke” and “My Blow Up Lover.”
But there are only two songs on TouchTunes by fellow Texan Michelle Shocked, a much more widely known and respected artist who’s had a prickly relationship with the music business. And a certain singer-songwriter from Oklahoma you may have heard of doesn’t exist on TouchTunes at all. His name was Woody Guthrie.
The process locally popular acts have to go through to get on TouchTunes’ system is akin to trying to land a major-label record deal. “The issue for us is … there are thousands and thousands of local bands, some of which are great and some of which are not so great, so there’s a process,” Selsen said. The bottom line is that a musician or band has to have “a critical mass” of support to make the cut. “Otherwise [we] end up with an unmanageable collection of music,” he said.
Advocates for musicians’ rights have only just begun to consider the implications of having one company control both jukeboxes and the content available on them. But based on the way commercial radio consolidation has played out, they’re wary of TouchTunes.
“Any system of bottlenecks and gatekeepers has resulted in keeping people out,” said Casey Rae-Hunter of the Washington D.C.-based Future of Music Coalition, a national nonprofit dedicated to protecting musical diversity. “Consolidation of ownership leads to a situation where you have tremendous power in the hands of one group of stakeholders … [We] can say pretty conclusively that consolidation hasn’t been really good for working musicians and local musicians.”
Welcome to the machine
TouchTunes’ future as a business depends upon its ability to continue to expand its network of jukeboxes and branch out into other aspects of the out-of-home entertainment market, like interactive gaming and marketing on TV screens inside bars and restaurants.
That future is by no means certain.
Earlier this year, Victory Acquisition, a Wall Street investment entity, attempted to merge with TouchTunes and take the private company public. The deal failed when over 20 percent of Victory’s shareholders rejected the proposed deal. The proxy statement Victory filed with the Securities and Exchange Commission explained why TouchTunes was a risky bet.
TouchTunes “has a history of substantial losses” and only began to make a profit last year, Victory told its shareholders. TouchTunes’ efforts to integrate its PlayPorTT gaming system and Barfly TV marketing program with its jukeboxes — and generate advertising revenue from all those screens — have not been successful.
Indeed, though TouchTunes’ jukes are now commonplace in the Portland area, Barfly and PlayPorTT are scarce. Joe Ferris of Ferris Music Services in South China operates 91 TouchTunes jukes, but only one PlayPorTT system — at Margaritas’ downtown Portland location. It’s not very popular, he said. Ferris has opted not to offer the Barfly marketing system to his customers, having chosen a competing program instead.
Ferris was one of TouchTunes’ earliest proponents. In fact, in 1998, he was the first in the nation to install a TouchTunes juke with a Bose sound system — at a billiard parlor in Bangor — and he stuck with the company as it ironed out a series of technical glitches in its early years. “They were tarring and feathering me in the industry, saying, ‘You’re making a big mistake,’” he recalled.
Now it’s TouchTunes that may be making the missteps.
Reflecting on the company’s struggle to integrate its entertainment and marketing systems, Ferris said, “They are big, and sometimes the bigger you are, the bigger the mistakes you make … When you get big, you get the California mentality. But what happens in California doesn’t always happen in Maine.”
Revenue from jukebox sales and its cut of the receipts is still TouchTunes’ only significant source of cash, and that stream has its own challenges. The proxy statement noted that “the patronage of local bars, which constitutes the principal market for digital jukeboxes, has decreased, due to the implementation of smoking bans in several states, decline in the importance of neighborhood bars and an increased enforcement of [drunk driving] laws.”
TouchTunes has to remain relevant to a notoriously fickle target demographic — men and women between the ages of 21 and 34 — in an entertainment market that’s both “highly competitive and subject to rapid technological change,” Victory observed in its statement. In other words, the same upheaval that’s relegating CD jukes to the landfill may one day bite TouchTunes in the ass.
Selsen said the company has been “experiencing challenges,” as so many other have during the recession, but is “meeting and achieving its goals” and expects to have a second profitable year this year.
The company has experienced remarkable growth. The number of TouchTunes jukeboxes has doubled in the past three years, and as CD jukes become increasingly obsolete, the pace of that growth is poised to quicken accordingly.
In 2006, a TouchTunes executive interviewed in an industry publication estimated there were about 200,000 CD jukeboxes in the U.S. If correct, that means TouchTunes has single-handedly replaced 10 percent of them since then.
The prospect of TouchTunes taking over the jukebox industry entirely doesn’t faze Ferris. “They’re dominating because they’ve done a good job,” he said. “Right now there’s only one manufacturer of pinball machines in the country.”
“Do I support it?” Ferris added. “When I grab onto something, that’s what I stay with. It’d cost me a lot of time and money and education to switch over.”
