SAN FRANCISCO -- Ecast Inc. shut down its jukebox music network on March 1, a company spokesman confirmed. The San Francisco-based technology firm's board of directors voted for an immediate shutdown after the company failed to raise enough capital to continue operating.

"We worked diligently for this not to happen," said Ecast vice-president of network operations Scott Walker. "We appreciate all the support from jukebox operators and the industry."

Walker, who joined the jukebox technology company seven years ago today, is among 55 Ecast employees who have lost their jobs. "In addition to working with great operators, I have had the pleasure of working with a dedicated staff at Ecast," he said.

Jukeboxes formerly connected to Ecast's network can continue to function locally, meaning that only music stored on a system's hard drive can be played. Vendor capabilities like remote management services and such consumer options as single-song downloads, social media interaction and cashless payments, or anything else requiring an Internet connection, are no longer available.

While Ecast jukeboxes continue to operate at reduced capacities, there is a limited amount of time during which they will be allowed to do so. Ecast did not say how long. Ecast jukeboxes store content in album format, and the average capacity on a box is about 150 albums.

Ecast was one of three high-tech firms competing in the digital jukebox space. Walker recommends that Ecast customers contact AMI Entertainment Network Inc. and TouchTunes Interactive Networks to explore all solutions for getting their jukebox locations back online. Ecast's phones and email have been turned off.

AMI president and chief executive Mike Maas said he was very surprised to learn about the sudden shutdown of Ecast's network. But he said Ecast operators should not "panic" since their jukeboxes will be able to "make noise" through the next few weekends, and perhaps much longer. In the mid-term, AMI and TouchTunes will come up with solutions, he said.

Maas's main concern is the potential negative effect that a large number of offline jukeboxes will have on the entire industry over the long term. "Nobody is going to be happy with a jukebox that can't get updated content or support Internet services," he said.

To illustrate Maas's point, the year's biggest on-premise occasion is around the corner. St. Patrick's Day is March 17, and offline jukeboxes will be unable to receive holiday content. (Note: as of noon March 2, one operator in New York told VT that he was still able to communicate with his Ecast jukeboxes and was able to add Irish songs to his cart.)

TouchTunes, the nation's largest jukebox music provider, with about 50,000 connections, said it's prepared "do everything it can to help" Ecast operators. "We have product and we can help," said TouchTunes chief operating officer Steve Brecher.

Like Maas, Brecher is concerned about the negative fallout that idle boxes will have on the industry's image. He added that it's critical to have licensed music and to keep the royalty stream paid, something that the jukebox industry has excelled at during the downloading-digital era. Operators, locations and the industry need to consider licensing issues associated with those offline boxes, he noted.

The jukebox executive also observed that the loss of the Ecast network, which will have an industrywide impact, presents an opportunity for all operators to reevaluate their jukebox routes. During this transition, he said, TouchTunes will not only accelerate its efforts to assist Ecast operators, but it also plans to remain focused on its own business strategy to redefine out-of-home entertainment. Central to that strategy is the Virtuo jukebox, which can support multiple entertainment services beyond music.

At its apex about four years ago, Ecast had some 10,000 jukeboxes online. That number might have declined between 30% and 40% over the past three years. At this point, the remaining jukebox manufacturers do not have enough inventory for an immediate replacement market on a scale of 6,000 to 7,000 units.