Further greetings from Las Vegas. We did get outside briefly and I can report that it was sunny and in the 70s. However, I hear back in Detroit it was in the 70s yesterday. There are also casinos in Detroit. Hmmm, maybe I never left… Anyway, back on the show floor, the mood was still positive and the AMI and TouchTunes booths were still the focal point of activity. Music has certainly generated the most chatter at this Expo and we found operators to be in a bit more reflective mood on Day 2.

The discussions amongst attendees began to be peppered with questions of “how?” How did AMI pull off the presto-change-o and all of sudden former Ecast machines are now on the AMI network? Turns out there are two basic parts to the answer to that intriguing question.

Part one is technical. We understand that the nerdy technical answer is that AMI’s network, like Ecast’s, is built on a Windows-based platform. By contrast, the TouchTunes network is built on a Linux platform. Therefore, with fairly simple software tweaks and server permission codes, boxes that were connected to the Ecast Windows network server could quickly and smoothly transition to the AMI Windows network server. In order for TouchTunes to perform a similar transition, my understanding is that local hardware in the jukebox itself would have to be changed to make it possible for a former Windows-based node to connect to TouchTunes’s Linux network server. OK, an interesting technical tidbit.

Part two of the answer, not surprisingly, is legal in nature. This part is much more complex and provides the majority of the intrigue in this situation. As has been widely reported, AMI stands as Ecast’s senior secured creditor. While AMI execs haven’t said specifically why this is the case, based upon public-record documents we know that the two companies were engaged in patent litigation in which AMI ultimately prevailed. As a result, as AMI president and CEO Mike Maas said in his public remarks, “AMI has obtained possession of certain assets of Ecast’s network.”

However, to my knowledge, Ecast has never initiated bankruptcy proceedings — either “straight” Chapter 7 bankruptcy for complete liquidation of their operation or Chapter 11 which would have provided Ecast protection from creditors and allow them to continue operating while they restructured debt agreements. Presumably, Ecast has other creditors other than AMI who could step forward and protest the way in which Ecast has dissolved its operation. I am not a lawyer and I don’t know how operators would be impacted if other Ecast creditors made a legal challenge to AMI’s claim on “certain assets of Ecast’s network.”

Suffice it say that the legal chapter of the Ecast story may not yet be complete. It is our fervent hope that in any case there will be no negative repercussions for operators who have transitioned from Ecast to AMI. However, let me take this opportunity to once again make the point that CD provides a healthy hedge against potential further service disruptions on any digital network. CD allows operators to “control their own destinies,” free from the licensing issues and legal wranglings associated with digital music. Independence is a vital feature of the route operation business. CD can be a valuable tool to help operators maintain control of the businesses they have worked hard to build.

Consider contacting us on 866-CD-JUKEB (866-235-8532) and find out how Enco can help you keep your old CD jukes on the street working hard for YOUR route.

Greetings from Las Vegas. I’d like to tell you what the weather’s like here, but as most of you know, going outside isn’t really part of the program in this town. However, the mood inside the convention hall is decidedly sunny. An upbeat front of optimism is sweeping across the industry as operators express their gratitude to AMI and TouchTunes for saving their music locations in the aftermath of Ecast’s demise. Attendance appears to be up, and the AMI and TouchTunes booths are the focal point of activity.

AMI has generated tremendous goodwill with its timely and streamlined solution for providing music to Ecast locations. Said one operator, “It’s not like there was weeks of down time while they figured something out. They were right there and made it very easy. Rowe saved our asses.” Operators were not talking about the terms of the new agreements they’re signing with AMI; they’re just very happy there was no interruption of service. It appears that AMI will pick up the great majority of the approximately 5,000 former Ecast locations.

TouchTunes is also enjoying a goodwill spike and will likewise pick up some of those former Ecast locations, albeit a smaller percentage than will AMI. TouchTunes is making their big splash with an announcement that they have secured the Beatles catalog for their digital jukebox network. This appears to be an exclusive for TouchTunes and provides them with a significant catalog advantage over competitors. They are also rolling out their photo booth and karaoke applications for their Virtuo jukebox. Operators are responding positively to these new options.

NSM is also here with a small booth. They are offering machines with a software platform similar to the one we saw at the EAG Expo in London earlier this year. Although NSM boxes were previously on the Ecast network, they claim to have fully-licensed music for the States. It also appears that they are continuing to try to sell directly to locations.

Despite all the positive conversation about the state of digital jukebox music networks, most operators we’re talking to still claim to have CD jukes active on some portion of their routes. We think this is a good thing. CD provides a healthy hedge against potential further service disruptions on digital networks. Ecast’s demise should serve as a warning to music operators. CD allows operators to “control their own destinies,” as competition in the digital realm contracts. Enco can help you keep your CD jukes on the street working for YOUR route.

Feel free to call us on 866-235-8532 to find out how. I may be standing on line trying to place my March Madness wagers, but somebody is in the office waiting to field your call.

Rowe CD 100

“This is a Rowe CD 100 jukebox. Features 100 CDs of your favorite music and is in excellent condition! What a fantastic piece of equipment to add to your home or location. Great for restaurants and arcades! Colors may vary. CDs not included.”

I saw this ad and the accompanying photo on a classified-ad web site. It makes a profound statement about the CD jukebox.

“This is a jukebox.” It is not trying to be anything more than that. You walk up to it, browse the selections, put in a coin or a bill, push the buttons and play the music. Straightforward, elegant and without guile. The CD jukebox makes no apologies — it only plays music and sounds great doing it.

“It features 100 CDs of your favorite music.” One hundred CDs. That’s over 130 hours of music, over 2500 three-minute songs. You could listen to music on a CD jukebox 24 hours a day for five-and-a-half days and still not hear all the music it might contain. And it’s important to remember that there is still some music on CD that isn’t available in any other format.

But it was the phrase “in excellent condition” that really caught my eye. Clearly, the CD 100 pictured in the ad is in excellent physical condition. The market for operators of CD jukeboxes is also in excellent condition. As new technologies and highly-touted business models have moved in, the CD juke has remained an operator’s steadfast ally. Five years ago operators began telling us that they planned a 100% route conversion to digital. Now as 2011 begins, it’s not uncommon to hear an operator tell us that his route is still close to 50% CD.

I’m proud to still be supporting the CD format, long after many experts had buried the technology. It continues to serve operators well in a range of locations. The CD jukebox is indeed “a fantastic piece of equipment to add to your home or location.”