About VHS, PRTY.L, and Fretter Appliance

[Theodore Donald Kiravatsos]

So here are my thoughts on PRTY as an investment.

Let me preface everything with the story of Fretter Appliance. Long time ago, way back in the early '80s to be inexact, back when I was a youngun and some of you younguns now in college wasn't even born yet, if you wanted to watch a movie, you had to see it in the theater, and if you wanted to catch a TV show, you had to be there when it started and sit through all the damn commercials rather than fast forward through them. VHS machines were available, but they were expensive and not in many homes. Then around 1982, VHS poisoned Beta's corn flakes, and Beta died. Also, the price of these contraptions started to drop below $400. Before you knew it, something that nobody had ten years ago, EVERYBODY had to go out and buy. And everybody did.

A lot of people bought these big ticket items at Fretter Appliance in the Detroit area. Fretter, which ran a few successful stores, started really racking up the sales on VHS. What a gold rush this was for them, yes indeedy. So they expanded, and they built store after store, and there were maybe a couple dozen around Detroit. And the dollars kept rolling in. But pretty soon, everybody had a VHS, and traffic at Fretter slowed. A lot. See, there is nothing about a VHS machine that makes you want the latest one each year. If you had one, and the tracking wasn’t f'd up, or the machine wasn’t eating your tapes, it was fine. (Compare that to Mustang convertibles and Madden Football where people are compelled to get the new releases ASAP). So people stopped buying VHS's at Fretter, because they already had them. And now, Fretter (symbol FTTR) had all these stores, and had increased their overhead immensely, but now were seeing sales revert to pre-VHS days. They could not support this massive network of stores that didn’t have that hot item. The stock my pappy had me buy at $30 ended up being sold at $1 per share, but only then after a REVERSE SPLIT which cut my shares in half....

What is the lesson here? A LOT of players are like VHS buyers. Just as some homeowners needed one VHS unit to satisfy their needs, there are a lot of fish out there, who, after finding out how bad they suck at poker, do not need a constant reminder of how bad they suck, and are now out of the player pool. These players are gone, and there will never be such a vast untapped reservoir of potential players as there was pre-2000. Pre-WPT. Pre-Moneymaker. Whatever.

That being said, there are some differences between FTTR and PRTY customers. In addition to the “One and done” buyers…I can think of at least three different kinds.

1) Not all customers are satisfied after one serving. Deposit bonuses are given to whet a player's appetite, and the bottom line is that some get hooked. (Think of a deposit bonus as a free sample. Who else gives out free samples? Oh yeah, the dope man...) THESE PLAYERS WILL NOT GO AWAY until they are broke or something better comes along. They will not just switch to casinos or horsies or sports betting, they will stick with what feeds the rush until they find a better rush than poker. Arguments that the fishiest fish out there on Party will switch to Casinos or sports or Bingo…well I don’t buy it. Because that stuff has always been available. If the suckers liked that stuff better, they’d have been at it all along. They are going to have to find something they like better than poker before this group of players quits poker. The high and low Draw games of the 70s and 80s have dried up because the fish found stuff they like better, namely Stud and Hold’em. So until something better comes along, or they go broke, a number of today’s fish will be found at Party. Period.

2) Other customers aren’t losers. These customers keep coming back and paying rake. The rake winning players pay buys the same amount of curry as the rake the saps pay. People like this will keep paying rake indefinitely. Here’s hoping most of you fall into this category.

3) Other customers are losers, but only small ones. These sort may view poker as entertainment, and enjoy playing from time to time. People like this will also keep playing rake indefinitely.

I’m sure there are other sorts, but this is enough to illustrate the differences. Has the player base lost some players, forever? You bet. Will current growth be sustained? Probably not. BUT, the types above are part of a sustainable player base, and these people are basically going to be printing money for PRTY for as long as they remain customers. And unlike Fretter, since PRTY’s overhead consists of a server, some CSRs, and some T-shirt and goody expenditures, I think they are going to be quite profitable, even if growth slows. And, as the recent article in The Guardian that someone shared
http://observer.guardian.co.uk/busin...567101,00.html points out, the owners only floated 25% of their company to the public. Now if it were me, and PROFITS as well as growth were headed for a decline, I’d sell something closer to 100% of my interest. But they’re keeping 75% for themselves. It sure isn’t because they figure it’s dropping to 0………

So I bought some and I’m in for the long haul.

[Uglyowl]

Will poker remain interesting for the masses? Will pokersites be able to come up with ideas to keep people interested?

From ages 12-17, there is a huge poker base and the interest in rampant.

I don't think there will be problems for quite awhile coming.

[Theodore Donald Kiravatsos]

I only went to see WWF (as it used to be called) live once...back in the mid-80s. The main event was a tag-team Hulk Hogan and BamBam Bigelow vs. Ted DiBiase and Andre the Giant. This was at a time when the championship belt was vacant after DiBiase tried to buy it for himself.

At one point, Hogan took DiBiase's sidekick Virgil and threw him to about arm's length above his head (ten feet off the mat or so). Virgil landed simultaneously flat....on his face, belt buckle and toes all at once. Ouch.

Nice avatar.

[Keith Fellmy]

what a stroll down memory lane. Fretter's (we all remember the commercials with Ollie don't we?), WWF title vacancy when Andre surrendered the title to Ted Dibiase. We also remember who won the tourney for the title don't we? That's right...the ohhhhhhh yea man. Randy Savage. When I was in college every time Savage said "oh yea" we had to take a shot of Cuervo Gold. Yes we were sh*t faced most of the time.

I too bought my VHS at Fretter's then about a year later it was gone.

Only stock I ever bought was ebay.