Three generations have made an 8O-year commitment to the amusement business and continue a family tradition.
By Bonnie Theard
The year was 1926 when restaurant and tavern owner Charles “Count” Knowles purchased a countertop pinball game that would ultimately change his life’s direction and that of the next two generations.
Players put two pennies in the machine and got 10 steel balls that would loop around pegs and land in holes as the game progressed. Jimmy Knowles said of his dad’s first coin-op machine: “There were no lights on it and you added up the score yourself. In 1926 a penny was really worth a penny.
“He began to buy more of those games and placed them in other locations. He bought his first jukebox and placed it in his tavern, The Cricket, in Pocahontas, Va., 12 miles from our current headquarters. Back in those days there was no network of distributors; jukeboxes were purchased from furniture store companies!”
Like so many coin-op veterans, Jimmy grew up in the business and traveled with his dad on weekends doing collections. In addition, he worked after school and every summer learning the ropes, a hands-on education from the ground up. “My boys did the same thing,” said Jimmy. “They used to ride with me on Saturdays and work in the summer.”
Jimmy fondly remembered making calls with his dad. “When I was eight years old all the locations we went to would give me free sodas and candy. When my dad emptied machines he would leave the back doors open and I would reach in there and get ‘sleepers,’ money that missed the cash pan. When I got home my mom would be mad at my dad because I would have grease all over my clothes from reaching into the machines and I wouldn’t eat dinner. But I went home with a pocketful of nickels and quarters. I thought it was the best job in the world.”
Jimmy came on board full time in 1968. He and his wife Linda own K&K; sons Jim Jr, and Matthew joined the company after graduating from college. There are 14 employees comprising office staff, technicians, and route/service personnel. A fourth generation is waiting in the winds: grandsons Trey (James W Knowles, III), Nic (Nicholas Knowles), Harrison G Knowles, and Brock Alexander Knowles.
Play Meter caught up with Jimmy to ask about K&K’s history and the secret to its longevity.
Do you still have that first countertop pinball?
In this business you have to make room for the new and throw the old away. We don’t have the space to hold onto equipment that might be valuable in antiquity. You either trade the old equipment, junk it, or scrap it for parts.
How large is the K&K operation today?
We operate in five states: West Virginia, Virginia, North Carolina, Kentucky, and Maryland. We run up to 400 locations and carry everything in the amusement line: videos, pinball, pool tables, darts, countertop games, jukeboxes, and also legalized gaming equipment (part of the West Virginia Video Lottery program). And we operate ATM machines.
We did not get into ATMs at the onset because the machines were usually placed by a lending or banking institution. As time went by machines became available for other businesses to place. We saw immediately that it was a new revenue stream. You have to be diversified in this industry and provide full service to your locations.
We’ve been involved with video lottery since its inception in West Virginia. It’s very difficult with lots of paperwork, high security, and daily monitoring. We have to renew game licenses every year, pay an annual blanket license, and give the state its share. It’s cost prohibitive to a degree; you have to be careful how you manage new chip updates.
We’ve never forgotten the girl who brought us to the dance and that is the amusement business. We’ve always tried to reinvest our money into that area.
What are the three most important things that contributed to K&K’s success?
Good service, good equipment, and good employees. A lot of operators get lackadaisical. You have to stay abreast of the new equipment and put it out. A basic thing we’ve always adhered to is: If we say we’re going to do something, we do it. We never had to put it in writing. You can take our company’s word, the word of our employees. Employees represent you and your company out in the field.
What contributions do the third generation bring?
The third generation brings in fresh ideas. They adapt to new products. They are out in the field and read trade magazines and talk to distributors to find out what equipment will have the most longevity and produce the best revenue. You have to have new blood and new ideas in this business. The young generation has no reservations about technology. They are not afraid of it.
Do distributors play a big role in the industry?
Distributors are invaluable assets today. They are a must from the standpoint of technical support and parts. We can’t do without those guys.
What are some of the major changes you have witnessed?
When I started in the business I put 78rpm records on Seeburg and Wurlitzer jukeboxes. We used to rub soap on often-played 78s to make them last a little longer. I’ve seen the change from 78 to 45rpm records, which were great because they did not break; then CD jukeboxes; and now digital downloading jukeboxes.
We’ve been able to adapt to new research and development and new technology. If you cannot adapt you will be stealing the water, meaning your business will be stale and you won’t generate any income. You don’t want to stop your boat in the middle of the stream.
How does your jukebox route look today?
We are replacing a large number of CD jukeboxes. Percentage-wise our company is probably 35-40 percent digital downloading jukeboxes. I have a shop full of old 45rpm units.
What was a harder change: from 45rpm to CDs or from CDs to digital down loading jukeboxes?
I think there was more reluctance to change from CD to digital due to the fact that you were bringing a third partner into your cash pan. To sell this to some locations is difficult even though it increases revenue tremendously.
We explain to the location that we have to pay fees, you tell them where the additional money is going, and it is not to the operating company. It’s going to the third party. It’s a funny thing: The location revenue goes up and the locations make more money with digital downloading jukeboxes but the location doesn’t mention it. We operate TouchTunes digital downloading jukeboxes; we’re all familiar with it.
Do you run online tournaments?
We don’t do any online tournaments but we do in-house tournaments on touch screen JVL Vortex and Retro countertops. The Retro is extremely attractive; it’s part of nostalgia and really catches your eye.
What do bar patrons want today?
With respect to countertops and jukeboxes our customers like simplicity. If something is too complex they become intimidated and shy away from the equipment. Digital downloading jukeboxes are user-friendly and pool tables are simple. Video games with too many buttons can also be intimidating.
We often get calls from people wanting to enter the industry because they think it looks easy. How do you feel about this misconception?
A lot of people jumped into the business with Ms. Pac-Man. It was the rage, a tremendous revenue generator. People thought if you just bought a few of those you could retire. Arcades and gamerooms sprang up and then sprang out and the operators with them.
Then we were back to the core people who know the business and know how hard it is with long, unpredictable hours. A tremendous amount of our revenue is generated at night when our customers get off work and go out for entertainment. That’s when our equipment gets big play.
While this industry is known for family businesses, not all can make it to 80 years. Why is this the case?
Our industry is a closed tight industry, something you can’t market to the general public. If you don’t have sons or daughters who are familiar with the business and want to carry on, you will sell it to someone else.
If a new operator starting out asked for your advice, what would you tell him?
I would say it’s a tremendous upstart cost and it’s difficult. You have to have many locations and rotate equipment.
I’ve been in the business all my life and I’ve seen great changes, and most of them have been for the best. With the grace of the good Lord I’ll continue to be here; my sons won’t let me retire!
What was business like in 1943?
Thanks to a 1943 Audit Report in the archives of K&K Music Co. we are able to gain insight into the coin-op business 64 years ago. Locations included hotels, taverns, American Legion halls, Elk’s lodges, billiard rooms, restaurants, and barbershops.
- Music: A Wurlitzer 850 phonograph cost $445; a Seaburg 98 phonograph cost $465.
- Pinball: A Ten Spot Pinball cost S30; a Knock Out pinball cost $60: a Shangri-La pinball cost $149.
- Other equipment. 40 peanut machines cost $192; a tube tester cost S25; a chair, table, and filing cabinet cos S14.50; a used safe cost $100.
- Vehicles: A 1941 Plymouth and a 1942 Chevrolet each cost S700.
- Operating expenses for the year: Records for phonographs cost $144.04; taxes and licenses represented one of the largest expenses at $790 (some things never change); merchandise for vending machines cost $121.50. machine repairs and maintenance cost $475.19, gas, oil, and lubrications cost $122.82, insurance was $47.26; rent was $15.