Amusement Expo Report – Day 2

March 15, 2012 by

Vegas-sign1Further 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.

Categories: Blog, Jukebox