Rowe Ami Jukebox

Michigan has Storied History in Making Jukeboxes

The Nite-Cap Tavern is the home turf of Whitey Morgan and the ‘78s, a honky-tonk band that was recently signed to Chicago's Bloodshot Records. Lead singer Morgan (a.k.a. Eric David Allen), shown, is at the end of a two-generation line of General Motors workers from Flint. The band's songs range from Morgan's original blues-influenced "Buick City" (written about the 235-acre manufacturing complex in Flint that was razed in 2002) to Johnny Paycheck's heavy swing number "The Meanest Jukebox in Town." "Country on the radio is bad," the 34-year-old Morgan said during a brain cloudy Saturday afternoon conversation at the Nite-Cap. "No soul. The music I like to listen to is never going to go out of style."

You throw some money in the jukebox and where does it go?

Royalties go out two ways on every play:

• To the record company—this is for the audio you actually hear.

• Royalties from the lyrics or musical notes you hear go to the people who wrote the song.

They are represented and protected by ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music Inc.) and the much smaller SESAC (Society of European Stage Authors & Composers, which has about 3 percent of the performing rights organization pie, including Bob Dylan).

ASCAP, for example, represents 390,000 composers and 8.5 million songs. BMI represents 475,000 songwriters and 6.5 million songs. "The songwriter, composer and publisher are paid 87 cents on the dollar for every dollar we collect," says Jerry Bailey, senior director of media relations and business communications at BMI.

John Margold, senior vice-president of sales at Rowe/AMI in Grand Rapids, Michigan, says, "The business model has become like King Gillette's idea of razors and handles. We don't make money selling wood in the hands of our customers. We live on a share of the revenue stream. What we do for them [jukebox operators] is they don't have to buy CDs or music again. Back when they bought the CDs it was a product that costs 80 cents, including the jewel case, and they paid $12 to $16 for it. There was plenty of money in there to pay royalty rights.

"With this [Internet] business model we take a share of the dollars that go in and make those payments. We also take the software and add somewhere between 150 and 400 new albums each week. Our file server had 80,000 songs when we launched in 2004 to 700,000 songs today.

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