CEO of TouchTunes, Charles Goldstuck, discusses the UK jukebox industry, parallels between the UK and US markets and the albums he can’t live without.
Charles Goldstuck is an entrepreneur, investor, and business operator, and is currently the Chairman and Chief Executive Officer of TouchTunes Interactive Networks, the world’s largest out of home interactive digital entertainment network, spanning over 70,000 locations.
Prior to TouchTunes, he was the President and Chief Operating Officer of the Bertelsmann Music Group (U.S.), a division of Sony Music Entertainment, one of the world’s leading music companies. At BMG, Goldstuck worked with artists such as Usher, Alicia Keys, Leona Lewis, Dave Matthews Band, Foo Fighters, Sarah McLachlan, Rod Stewart and Annie Lennox. Coinslot caught up with Charles during his recent flying visit to London for the launch of the TouchTunes Playdium jukebox.
How would you summarise the challenges facing the UK jukebox industry and how significant are they?
While the UK jukebox market is by far the largest in Europe, it’s not of a scale that supports the level of innovation needed to ensure that the consumer in-venue experience keeps pace with the innovation that we are seeing from new consumer services such as Spotify, Apple Music and Deezer. With UK consumers at the forefront of embracing these paths to choosing the songs they want to hear, the experience of playing a typical jukebox is becoming outmoded and losing relevance for many regular users. The UK has a vibrant music scene, with many of the top-selling artists worldwide coming from the UK. The overall figures on the consumption of music show rising trends, driven by the vibrancy of the music scene, and the new services available to consumers. But without an improved experience on the jukebox, in terms of the way music is presented, the choice of songs offered and the ability for the consumer easily and quickly to play the songs they already have in their playlists, I foresee jukebox usage in UK pubs continuing to decline in the years to come.
At TouchTunes during my 7 year tenure, our focus in North America has been very much to improve and enhance the jukebox experience, not just by bringing new jukebox models to the market but also by continuing to develop the user experience on existing models in order to keep pace with music services generally, and that’s how we will approach the UK market. Our mobile app is an example of this, where in North America we had over 2 million active users last year.
In your view what are the similarities/differences between the jukebox industry in the US and the UK?
I see a number of parallels with the jukebox business in North America back in 2009 when I invested in TouchTunes – back then, a lack of innovation and a poor consumer experience was resulting in declining interest in jukeboxes across the US and Canada from operators, venues and consumers alike. The technology was dated and the online tools to make the operator’s job easier were limited. So the lessons we learned about how to go about introducing a better experience both for the consumer and the operator are part of what we can bring to the UK market.
There are of course some major differences in the markets, in particular the importance of fruit machines to UK operators does not generally apply in the US, as in-venue gambling is not permitted in most of the 50 US states or Canada. Also, the pubco business models are not found in the US; the vast majority of bars in the US are independent single sites, owned and managed by individuals.
We recognize that the markets do vary in these and other important ways and this obviously means we have to approach the UK market differently, which is a big factor in why we acquired Soundnet and have partnered with Sound Leisure in the UK.
What can Europe learn from the US in terms of the revenue opportunities offered by pay-for-play music?
Consumers today expect a personalized experience, whether it is to choose the specific song they want, the toppings on their burger, the dressing on their salad, or the colour of their trainers. That’s not a trend specific to one country but a common theme certainly across the Western world, enabled by all the new services that we are seeing. When you offer consumers a fun, social experience that’s easy and quick, and allows them to express their personality, I think UK pub goers will respond positively and pay for play, just as their cousins across the Atlantic have done.
Do you believe that pay-for-play music is relevant to the Spotify generation and what can be done to bridge any gap that exists?
Absolutely – Above all what Spotify (and the other streaming services) offers is a very well designed way for the consumer to browse and explore a huge range of songs and then to organize their choice of songs in a way that’s easy to manage. So playing the song the individual wants to listen to right then and there is very easy. Across the TouchTunes jukebox and our mobile app, that’s what we’re offering the consumer – they can find and play what they want to hear quickly and intuitively.
Bear in mind through, we do provide the controls that ensure that consumer choice doesn’t ruin the atmosphere for everyone else in the pub by selecting songs that aren’t appropriate. This has worked very well in our 65,000 North America venues.
Your strapline for Playdium is ‘a smarter jukebox experience’ can you expand on this, what does it entail and most importantly, what does it mean for operators?
Music choice is a very personal matter and no two pubs will have the same list of most played songs. One of the features we introduced with Playdium is a way to present music that emphasises the most popular songs in the specific venue. And as that selection changes over time, whether because newly released hit songs get lots of plays or because the mix of customers changes over the course of the year, so that presentation of the most popular songs adapts to new patterns. This is a key element of what we mean by a ‘smarter jukebox experience’.
From the operator’s perspective, the online diagnostic tools and alerts available through our online operator portal “Tempo” also make it easy for the operator to manage Playdium jukeboxes remotely, reducing service calls, which is another aspect of TouchTunes offering a smarter jukebox.
Navigating your website, TouchTunes has the feel of an Apple or a Google in terms of its vision, language and workplace culture. Do you recognise that comparison and if so, why is it important?
I think we do aspire to some of the same core goals of providing well designed products that are fun and intuitive to use and offer great value. And we also share a view that technology will continue to advance, and new and improved products and services will continue to be introduced at a rapid pace in the general consumer world. As a consequence, we believe that we have to continue to innovate to remain at the forefront of the best consumer experience.
As a mid-sized company, we obviously do not have the same level of resources that the larger companies have, but we do focus on driving innovation as a core sensibility throughout the company.
The 2017 UK Good Pub Guide (published September), cited background music as the main source of complaint for pub goers, alongside ‘badly behaved children’. Is this a reflection on the genre or simply the way it’s being deployed? What message would you send out to the detractors?
Music is a key element in creating atmosphere, and we all react to music in quite profound ways – that’s a big part of what makes music such an important part of each and every culture around the world. So I totally agree that poorly programmed music can be a real turn off. The opposite however is also true, in that well programmed music really enhances experiences. The selection of songs to be played as background music needs to be well considered not only in terms of the style of the music but also a combination of both enough variety and a degree of familiarity to be appealing. Good programming requires human judgment and insight.
When background music is approached in terms of simply finding the lowest cost supplier, the quality of the programming is often quite poor as it becomes very formulaic. So the problem is not with background music as a service but in the poor quality that is too often delivered to the location. Similar to the jukebox market, technology today allows for a much improved background music service to be delivered at a lower cost than in the past, and this comment is not only specific to the UK market but is equally applicable to the North American market.. At TouchTunes we do believe there is a significant opportunity to offer an improved and relevant background music service, and this is an area where we anticipate making important announcements in the coming months.
In your former role as President and COO of BMG, you helped the careers of some superstar artists including Usher, Alicia Keys, Whitney Houston, Justin Timberlake, Rod Stewart, to name but a few. If you were on a Desert Island, what album would you take with you?
This is a very tough question to ask of someone who has a broad taste in music. However, at this moment, I would have to ask you to allow for 2 albums, as I would vote for John Coltrane’s “A Love Supreme”, as well as David Bowie’s “The Rise and Fall of Ziggy Stardust”.