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The Rocking Economics of Jukeboxes

How much money does your bar get every time you request Smash Mouth?

How amazing are bars that have a jukebox? Not only can you listen to your favorite song over a drink, you can also force the entire bar to listen to it along with you! (Some, like this legend, take this privilege to extremes.) Trolling aside, jukeboxes are a quiet yet quintessential fixture of our society. Just think about all the songs — from The Kinks, The Fall, The Flirts, Perry Cuomo, a million country singers, and obviously Foreigner — that are literally about a freaking jukebox.

It even used to be commonly debated which bars had the best jukeboxes in town. But it’s 2020 — what’s up with them these days? How much money do jukeboxes make now? Are jukeboxes a good investment for a bar? Why doesn’t a bar just play its own goddamn music? Alongside Tim Paule, who’s operated jukeboxes for 30 years in San Diego, we’re playing some very loud answers. 

Before we get into how much money jukeboxes make, does the bar actually own the jukebox, or what?

Not usually — companies like Paule’s own and operate the jukebox and essentially offer to put them in bars. There’s no lease or anything like that, just an agreement to split the revenue with the bar, and in most cases, it’s a 50/50 split. Jukeboxes, though, are just one component of businesses like his: Paule will supply pool tables, ATMs, video games and tabletop games to bars as well, all with revenue-sharing agreements. 

The jukebox is part of a package deal for a bar?

Sort of — Paule says bars will contact him if there’s an empty corner in the bar that they’d like to monetize. If the bar wants Golden Tee in there or some other arcade game, Paule will arrange that. “But really, the big money is the jukebox,” he says. So he prioritizes keeping the bar owner happy in order to ensure his jukebox stays in the bar.

How much money are we talking?

His best jukebox makes a thousand dollars a week, or at least it did before COVID. There are others, he says, that do as little as $200 to $300 a month, but he’s okay with that because of all those other, aforementioned things he’ll provide to a bar. 

So if I put $20 in the jukebox, the bar gets $10 and the operator gets $10?

The bar gets $10, but operators like Paule immediately have to pay alms to the jukebox companies (like AMI and TouchTunes). That fee is how the jukebox company covers the song licensing fees and software maintenance. (Paule won’t say how much the fee is, though it depends on how many jukeboxes an operator owns. The internet suggests it’s as much as 40 cents of every dollar a customer puts in.)

They’re pretty much all digital nowadays, right?

Yep. They’ve got tons of songs to choose from, and they take cash, credit card or also operate via app (which Paule says has been great during COVID, for its touchless operation). They’re just more convenient overall. Digital jukeboxes also take far less maintenance. In the old days, Paule and an assistant would service a jukebox once a week, Paule counting the money and his assistant cleaning the CDs. That’s because back in the days of smoking in bars, the CDs would get a thin sheen of haze on them, Paule says. Same with the CDs inside the jukeboxes of bars close to the beach, thanks to the sea air.

Nowadays, as bars reopen, Paule has had to work on a lot of their batteries. “You need to kind of wake it up and say, ‘Hey, you’re still alive, you’re still attached to this bar, let’s go back to work and go back online,’” he says. Additionally, fans need replacing, speakers and wiring need fixing (Paule also manages the sound system attached to the jukeboxes — all the bar needs to provide is the internet connection). Another perk of the digital jukeboxes is that Paule can monitor them remotely. If he sees one is overheating, he knows he needs to replace the fan, for example. 

Do any bars still have CD jukeboxes?

Yeah, they’re still around, mostly at hipster bars. Paule operates the video games in them, but not the jukeboxes. Not everyone is happy about the switch to digital.

Why do hipster bars insist on CD jukeboxes?

Aside from the coolness of old jukeboxes, they’re a way for the bar to control — or more specifically, limit — the types of music and songs played in their establishment, since they only hold 100 or so CDs. It’s basically vibe curation for a bar.

Why do bars have a jukebox anyway? Why not just let the bartender play songs?

The main reason is the revenue, Paule says. It’s easy money! Just put the machine in a spot where, say, another table wouldn’t fit, and you monetize an otherwise dead corner in your establishment. And it’s a couple thousand dollars more than if the bartender was playing deejay.

But there’s also a sort of HR or time-management aspect as well: Bar owners don’t want their bartenders fiddling with their phones to select songs when they could be serving customers instead. Paule also thinks that people tend to say longer if they control the music. They may have one more beer, for example. And if there’s a long line, a person is less likely to leave before the song they’ve already paid for comes on.

So, jukeboxes are still popular?

Yeah — giving customers the opportunity to play their favorite song while enjoying their favorite drink is kind of a no-brainer for a bar. “There’s something about sitting around the bar playing your favorite song, you know?” Paule says. “I think day is different than night. During the day the people will play that one weird song from the 1980s that they really like that they haven’t heard in 10 years, but the nighttime crowd seems to play whatever type of bar it is: If it’s a country bar, that’s what they play at night.”

And so even if no one behind the bar can stand your song selection, they’re at least tolerating it because they’re making money off of it — one Def Leppard song at a time.

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