Play Meter

Issue: 1976 February - Vol 2 Num 2

GROOM: More enlightened brewers recognize that
the rental factor i not the mo t important factor at
alL It i ,of cour e, th revenue because frequently,
th higher the rental the better the revenue . The
more killful the operator the better the way he
organize hi collectio n faciliti e and ervice and his
admini trative ability.
W have a very different ituation in the UK now
compared to 5,7 or eight years ago. We now
require experti e. The brewer simply looked at
the ituation and aid, "look, money for nothing."
ow they are recognizing that there i an awful lot
of money to be made and s hould have been made by
u ing killed operator .
PLA Y METER: They are making more money than
they ever made before and th yare realizing the
imm nse ca h value in the machine, wherea
b for th y kind of neglected it?
GROOM: Ten year ago, the fruit machine or the
juk box operator walked through the back door of
the brewer a nd he was the man who wa producing
for them thou and of pounds a year.
Why?
Becau e he wa
till not con idered terribly
re pectable.
PLAY METER: But it i chaging i n't it?
GROOM: It' changing now.
PLA Y METER: orne operator till walk out the
back door.
GROOM: I think mo t of u walk out the back door.
PLA Y METER: What would you ay the tandard
A WP fruit machine would rent for new?
GROOM: I would ay omewhere within the region
of 11 pound per week now though it hould be in
th region of 13 pound per week.
PLA Y METER: Will it ever get to that level?
GROOM: It will have to b because overhead over
here i ri ing 0 rapidly we are in a tate of
hyp rinflation. We are paying higher petrol co t ,
higher alarie and the brewer i looking to us to
produce more revenue in a time when there i not
perhap the arne amount of ca h flow going
t hroug h t he eq uipment, wheth r it be a jukebox or
a fruit machine.
PLA Y METER: How do you plan to go about
rai ing it from 11 to 13?
GROOM: Well thi can only b done by changing
your quipment on the ite, by introducing new
machin ,by injecting, -if you like, ecurity check ,
by be oming thoroughly more efficient.
PLA Y METER: Do you think you could ell the
br wer on that?
GROOM: Ye , the more enlightened brewer , yes.
PLA Y METER: What i your commi ion arrange-
ment on other game? On fruit machine ,a we
aid before, it ha to be a straight rental.
GROOM: It ha to b by law .
PLA Y METER: Doe that apply to amu ement
machine , Meaning anything but a gambling
device?
GROOM: A pin table by law has to be on rental. A
jukebox of cour e i an e ntire ly different thing.
Here we work on a divi ion of profitability becau e I
beli ve it take a much more killful operator to
op rate jukeboxes than a fruit machine man
becau e if you don't put the rig ht records on the
juk box, they aren't going to buy it. With mu ic
they ar pay ing for omething, wherea omeone
PlAt' Itf£TER
who goe to a fruit machine i hoping to win.
PLAY METER: What, then, is a commission
arrangement on a jukebox?
GROOM: On a jukebox most enlightened companies
will charge what i called rental, which varie from
four to eight pound per week and a division of the
balanc 50/ 50. Where you have a managed house,
the re nt money i retained by us and in most cases a
commi ion i paid to the manager, which can range
between five and 10 per cent the balance goes to the
brewer.
PLAY METER: Do the Brewers tend to favor the
fruit machine over the ordinary amusement
machine?
GROOM: Ye , they do and I think this is wrong.
Fruit machine are more profitable in the fact that
t hey attract more revenue, but I believe that music
i an entirely different thing because there is an
indirect ben fit which i not always recognized by
the brewer. A hou e that is run with good music
will attract trade to the hou e. If the music is lousy,
the wet ale, the beer sales or the gin sales are
low r .
PLA Y METER: Do the brewers see it that way?
GROOM: The more enlightened ones certainly do.
PLA Y METER: Are they beginning to realize the
improtance of coin -operated mu ic entertainment?
GROOM: Indeed they are. They will have the more
efficient firm rather than the ones that come in
with ch ap cutrate prices .
PLA Y METER: How much doe it cost to play one
ong on one of you jukeboxe ?
GROOM: On average today it is five pence (10
c nt ) for a ingle play and 10 pence gets three
play.
PLA Y METER: Are you going to try and change
that? It eem a little low?
GROOM: It ha got to come up. We have to start
getting more becau e we have to pay performing
right fe .
PLA Y METER: What doe that amount to?
GROOM: On average we are paying something like
15 pound to 20 pounds per annum for the privelege
of upplying music to a place where there is music.
PLA Y METER: Is that 15 or 20 pounds per machine
per year?
GROOM: Yes, per machine. That is currently being
examin d by the performing rights society and
phonographic performance . We are threatened
with a 400 per cent increase in charge.
PLA Y METER: What are the chance of that going
through?
GROOM: It will reduce the earning of the brewer
o much that I am sure they will combine with us to
fig ht again t these rediculous claims for increase in
fee.
PLA Y METER: I the commi ion arragnement the
arne with a pinball machine and a video game?
GROOM: With video game I think mo t operator
divide 50/ 50.
PLA Y METER: What i the general feeling
pre ntly with re pect to video game?
GROOM: I feel video game are possibly best used
by the mailer operator, who can give very much
more per onal attention to the requirements of the
it .
PLAY METER: Do you ee much of a future for
47
video games in Great Britain?
GROOM: Personally, no. Their only future is with
the small operator who can cope with the more
per onal demands of the site owner. I could well be
proven wrong.
PLA Y METER: Why would it take more of a
personal touch with the location owners to operate
video games?
GROOM: Speaking on behalf of a large operating
concern like ourselves, we have a job enough to
become experts in a field in which we are proven
leaders, namely music and fruit machines, without
digressing into t he field of video games.
PLA Y METER: I've noticed the British taking
more and more interest in American pool. How ha
it affected your own operation?
GROOM: It i regrettable, but our own particular
company is not big in pool tables. As an individual, I
voted for pool tables on our board when they were
deciding if pool tables should be brought in and
have been proved right. They have been very
profitable and they are going to go on being very
profitable. But we don't operate more than 100 pool
tablp.s.
PLAY METER: Howe are those hundred tables
doing?
GROOM: They are doing quite well, actually.
PLAY METER: Then surely you must be inclined
to increase t hat number.
f;ROOM: I would like to increase that number, yes,
hut the competition has moved in in front of u .
Unfortunately, the brewers we erve have made
arragnements over the past 12 months with other
operator on t he supply of pool tables and so the
pool table bu iness is probably better off in the
hands of the mall operator.
PLA Y METER: It is interesting to see the
specialization that seems to be developing over
here, but I guess that is one of the problems you
have to face when you are uch a big company.
GROOM: If my managing director was here, he
would say that large companies are toe dinosaurs of
industry. The problem with a large company is that
it becomes slightly impersonal. We have endeavor-
ed to avoid that particular danger by decentralizing
the control of collections and service to regional
offices.
PLA Y METER: What about service? I'm sure it is
a important a part of the busines here as it is in
the U.S.
GROOM: If we don't give service within three
hour of the call, we are in trouble, but generally
we will give service within the hour.
PLAY METER: Let's talk about taxe and licenses
for a while. Do you have to buy a license for a
jukebox?
GROOM: Yes. You pay a license to the Performing
Right Society and you pay a performing license to
the Phonographic Performance Society. Thi costs
you about 15 pounds per annum .
PLA Y METER: What sort of a license do you need
to operate fruit machines? And how much does that
co ts?
GROOM:
With
the fruit inspectors
machines we
pay a license
fee to Her
Majesty's
of customs
and
48
exci e which can amount to a much as 100 pounds
per year.
It varie on the type of machine that you in tall,
whether it be of a low value or a high value
mach in . A low value machine would be only 121/ 2
pound a year.
PLA Y METER: Who bears the burden of these
licen e taxe ?
GROOM: The tax is paid by the operator and if the
brewer i en ible, it i recouped from the brewer.
This is where the competition comes in becau e
orne operator will say, "We'll pay the tax!" But
mo t ite owner don't mind paying the tax, even in
the case of a high value machine because a high
value machine on an average will attract something
in the region of 30 pound per week per machine,
wh re a low value machine will attract a revenue of
between 12 and 14 pound per week.
PLA Y METER: What other taxe are there that
you have to cope with?
GROOM: There i the VAT (value added tax),
impo ed on all coin -operated equipment and it i
deductable from the gro revenue and it come
right off the top before anything else is deducted
from the total take. It amounts to eight per cent of
the total revenue.
PLA Y METER: How long ha this tax been in
effect?
GROOM: It wa put into effect two years ago.
PLAY METER: Did you try and fight that when it
came up?
GROOM: No, becau e it i a very reasonable tax.
WE'RE READY TO SERVE
WITH EXCITING NEW PRODUCTS
IN TIME FOR
THE ARCADE SEASON
call your local Fun Games distributor or:
8410 Amelia, Oakland, CA 94603
Oberto Alvarez, President
Patrick S. Karns, Director of Marketing
(415)568-5225
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