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Industry Leader Sold More Than
10,000 Internet Jukeboxes
in Past Year
LAKE ZURICH, Ill., — Digital-downloading jukebox pioneer TouchTunes Music Corporation reported that sales of its coin-operated Internet jukeboxes nearly doubled in 2006, compared to sales in 2005.
The world’s leading supplier of commercial digital jukeboxes and music content said it sold a combined total of 10,209 new floor and wall models and CD-to-digital conversion kits in 2006, a 96.1 percent increase over the 5,206 units sold in 2005, which also set a record.
“To put this growth in perspective, it’s worth noting that sales were more than 500 percent higher than they were just five years ago,” says Dan McAllister, TouchTunes senior vice president for sales and marketing.
TouchTunes attributes soaring sales to a combination of developments:
Key sales hires. The company says it hired some of the coin-op industry’s most successful and respected sales veterans to strengthen its presence in selected markets. “We’ve always set out to hire the best of the best, in terms of integrity and professionalism,” McAllister says. TouchTunes also added staffers with distributor sales and service experience to improve its distribution in the metro Chicago area, and it boosted the number of inside sales and service people to assist operators.
Aggressive quarterly sales promotions. “Operators took advantage of these deals to achieve even larger financial paybacks on their jukebox investments,” McAllister says.
New products. 2006 saw the introduction of TouchTunes’ Allegro floor model, jumbo Ovation wall model, and digital conversion kits for wall-mounted CD jukeboxes. The kits are designed and built for TouchTunes by an enterprising and successful operator, Pennsylvania-based L & M Music, headed by Lou Miele. McAllister calls them “the most well-thought-out kits in the industry.” Dan Clarton, TouchTunes’ director of sales, says the company’s beefed-up product portfolio “signifies we’re a full-line digital music supplier with the right solution for any location — a company that’s in tune with the market.”
Tantalizing new technology. At September’s AMOA show, TouchTunes unveiled its Gen 3 operating system for broadband, with unprecedented music-management and music-customization capabilities for operators and the ability of jukebox patrons to download and use, on location at the jukebox, personal playlists they create online at MyTouchTunes.com. “Customers saw proof that TouchTunes is the future of interactive, out-of-home music entertainment,” McAllister says.
Groundbreaking partnerships with gold-plated brands. As examples, TouchTunes points to its 2006 agreement with A&T for specially priced high-speed broadband service for its operators, as well as its exclusive deal with Billboard for digital-jukebox rights to the most popular Billboard music charts.
TouchTunes says it also benefited from greater industry-wide recognition of the revenue and profit potential of digital jukeboxes in general.
Clarton says operators have had time to assess returns on investment. They’ve observed the successes of others. Locations are clamoring for the devices, and the public is talking about them. The technology has entered the mainstream, he says.
“Music is once again the profit cornerstone for a street route in today’s market,” Clarton says. “The more units an operator puts on location, the more they prove themselves. The skepticism, the inertia, the wait-and-see-attitude are evaporating.” As further evidence of this, he notes that initial orders from new TouchTunes customers in 2006 often were considerably larger than in the past.
“Everyone at TouchTunes is rightfully proud of what was accomplished in 2006,” says Art Matin, TouchTunes’ president and CEO. “We’re even more excited about the prospects for 2007 and the additional benefits awaiting our operators and distributors.”
TouchTunes Music Corporation introduced the world’s first digital downloading, coin-operated commercial jukebox in 1998. Today, TouchTunes’ online network of approximately 23,000 pay-per-play Internet jukeboxes in bars, restaurants, and other establishments throughout North America is the industry’s largest, representing a market share of more than 60 percent.
A privately held U.S. corporation, TouchTunes’ principal offices are in Montreal, Canada, and Lake Zurich, Ill., a Chicago suburb. The company is backed by VantagePoint Venture Partners, one of the largest venture capital firms in the world with offices in Silicon Valley, New York, and Montreal. VantagePoint has over $4 billion in capital under management, including a substantial portfolio of consumer-oriented digital-media companies that complement TouchTunes’ growing leadership in out-of-home, interactive entertainment.
