WEEK OF DECEMBER 3. 1945 WITH merchants coi** StUtClOR SECTIONALIZED ELECTRICAL SYSTEM Nothing to to they’ve seen is pictures of it. All they know door. fake out remove or replace Jut revolutionary “Cleared for Action” Service them. The entire electrical system is sectionalized by plug connectors. Every unit is the new Wurlitzer 1015 is what they’ve read easily disconnected, Music Merchants removed and replaced. jut it—BUT—the response by > been tremendous. See your Wurlitzer Distributor. Get on the band allow the stars above and you’ll see why. Improved wagon and get in your orders for this great Wur- Sectors are easily removed for cleaning. The cash litzer Model 1015 featuring “Cleared for Action” ox is larger, more easily removed and replaced Service. The Rudolph Wurlitzer* Company, North on ever. The speaker mounts on its own door, Tonawanda, New York. rings wide for service. Motor driven color cylinders - * fluorescent lighting are mounted on the front The Name That Means MUSIC to Millions A/7 TOT ITvS U AKV *1 9 [It! a sms copyrighted feature of-, the cash box, mi fourth aye, new york <i« PRICE OF EQU I PM ENT TAXES LA 0QR INSTALLATION COSTS RECORDS TRUCKING ACCESSOR! BS ADDITIONAL OVERHEAD \ a fs 'S << ' . ” PUBLICATION CHICAGO OFFICES 32 W. Randolph Room 1608 Tel. DEarborn 0043 381 Fourth A»«. Helen Palmer, Mgr. New York li, N. Y. “THE CONFIDENTIAL All Phones: WEEKLY OF T11E COIN MACHINES INDUSTRY” LOS ANGELES MUrray Hill 422 W. nth St. ISSUED EVERY WEEK BY SUBSCRIPTION ONLY Tel. PRospect 2687 4- 7797 - 7798-7799 REPRODUCTION IN WHOLE OR IN PART FORBIDDEN Marshall Micon WITHOUT Mgr. WRITTEN PERMISSION FROM THE PUBLISHERS. COMPLETE CONTENTS COPYRIGHTED Vol. 7, No. 12 Serial Number 220 Week of December 3 , 1945 66 The Coin Machines Merry-Go-Round MERCHANDISING MUSIC By Bill Gersh The most fascinating and pleasing change in the coin machine picture at this time is the fact that thruout the country there is a tremendous drive to get the new music equipment properly merchandised. Distributors have come to realize that it is no longer logical to sell operators—just with the thought of selling more and still more machines. Today—selling requires that the distributor merchandise his music equipment to the juke box operator so that he will be assured of continued prosperity operating the new equipment. The higher prices being asked for the new equipment have, in themselves, changed the entire mer- chandising picture, according to automatica music leaders. The average coinman realizes that the big flush of the war era is practically over. The readjustment period is on its way in. This, in itself, is expected to change many operations thruout the nation. The operator realizes that he can no longer continue on the old basis because of the fact that his territory is rapidly returning to a semblance of pre-war normalcy. This means he has to change his present tactics. No longer will the distributor advise the buyer of automatic music equipment to just place the machines on location and call around each week to service them. He realizes now that he must do an educational selling job. He must convince the operator to arrange for a better commission basis so that he will be assured of continued, profitable operation—plus rapid amortization of the equipment he will purchase. Everywhere in the nation the average music distributor is today preparing to merchandise (and not just sell) music. The intelligent distributor is urging the operator to immediately go to a 7 0%-30% commission basis so as to stabilize his business and to assure himself continued, long run prosperity. Every operator of music machines thruout the country knows that his overhead has increased any- where from 50% to over 150%. His record costs alone have tremendously jumped. And that even with this jump he cannot obtain all the records he wants and needs. His trucks and tires cost him more than ever before. His labor, mechanical and office, and his general servicing overhead, have risen tremendously. Operators who formerly had two service men, now have four because their machines are going out of order more often than they did before and require more service. In addition they must give their locations better service than they ever did before to assure these locations remaining theirs. Operators are signing leases with location owners, and have been able to make these stick thru court tests. They have not only won equitable amounts from the location owners who ousted them, but by such action have cemented their hold on these locations in their area. The fact remains that the operator must also take into consideration that all parts and supplies cost him more than they did before. This addition to his present overhead is so great that unless he rapidly retrenches at a 70%-30% commission basis for the average location he will find himself away out on a limb in the cold, especially when it comes to amortizing the cost of the new machines. There is no longer any doubt in the minds of all business men that the juke boxes are now really big business. And that as such they will definitely attract the attention of gigantic organizations who The Cash Box Week of December 3 , 1945 ” '* The Coin Machines Merry-Go-Round will want to sell direct and maintain large service forces—just as the automobile manufacturers are now doing in every town in the nation. Therefore, the music leaders report the best thing that the average juke box operator can do is to protect himself by arranging location contracts and leases, and by placing his commission arrangement on such a base where he is assured a sufficient financial reserve so that he can continue on regardless of how powerful such direct selling efforts may become. Must juke box operators have elaborate plans for future music operation. Many are planning com- binations of telephone and mechanical selection music. Such installations run into large sums of money. Some are also planning triple combinations of mechanical selective music thru a juke box mechanism, a mirrored arrangement for telephone music, plus music on film, so that all three will give the customers complete choice of selection. Such a triple installation will cost approximately $5,000.00 or more. And this, even at a 10c play for the telephone and film music, still means that a completely new and different commission basis must be arrived at so that the operator can get his investment out of the equipment as rapidly as possible. From every viewpoint then, as this new musical merchandising era gets under way, the trade must come to a better commission basis to cure many old former ideas which existed about what location owners should receive as commission. The days of the 50% -50% commission basis are numbered. Even the amusement machine men realize that this commission basis no longer holds good because they cannot amortize their equipment with sufficient rapidity to assure themselves any profit. Certainly, then, music men must realize that with all the records, parts, supplies, service, taxes, and all other increasing overhead, they SURELY CANNOT PAY MORE THAN 30% COMMISSION TO LOCATION OWNERS. The time has arrived, thru gradual evolution, where music is being merchandised to the operator —and not just sold to him. The average distributor has come to realize that he, too, faces severe competiton. He must sell on an entirely different and more sound and logical basis than ever before in his career. He must work with the operator right to the location. And to such an extent that the operator will be assured that all left out in other music operators will also cooperate on this new commission basis so that he will not be the cold. regardless of Regardless of what plans are made from now on in to the adjustment period, and how many merchandising schemes are brought to the fore, so that distributors foi the various music resolve itself down to this one manufacturers will be able to meet their quotas—the answer will always all-important fact—THAT THE OPERATOR MUST SET HIMSELF UP ON A NEW 70%-30% COMMISSION BASIS TO BE ABLE TO CONTINUE ON IN THIS BUSINESS AS SUCCESSFULLY IN THE FUTURF AS HE HAS IN THE PAST. the operator to change his com- The drive that The Cash Box started over three years ago to get last become a national crusade. Distributors mission basis on his average location to 70%-30% has at especially desire it. In those territories where license everywhere in the country are for it. The operators EFFECT, OTHERWISE taxation has leaped to new highs IT SIMPLY MUST BE PLACED INTO THERE WILL BE NOTHING LEFT FOR THE MUSIC OPERATOR. * this new and better basis. Only by this The Cash Box will continue to urge the trade to adopt the bank instead of heaps of wood in a warehouse. action will operators be able to show dollars in has arrived, because of the price of new equipment, plus As surely as this is being read—the time has entered this industry, plus all other surrounding factors— the fact that a finer type of business man necessity to adopt the plan that The Cash Box has been urging for more than three when it is a matter of COMMISSION BASIS FROM NOW ON IN. years — IT MUST BE THE 70%-30% The Cash Itox IScu's and Vines COURT RULES $50 PHONO LICENSE INVALID CHICAGO, ILL. — The Illinois Supreme Court held last week, that while the city has the right to license juke boxes in its exercise of police powers, an ordinance of 1943 is invalid because the $50.00 annual fee set for each box is "out of proportion” to the regulatory burden imposed on the police.