Personal information
Current company: Hoffman Schutz Media Capital
Position: President
Location: San Diego, CA
Place of Birth: Within 2 miles of “Music Radio” WABC-AM’s Transmitter in New Jersey
Date of Birth: Almost the precise midpoint of the twentieth century
College: Ithaca College (BS), American University (MBA), Stern Graduate School of Business (Taggart Fellow)
Favorite movies: 2001, Dr. Strangelove, God Father, Titanic
Hobbies/Passions: Snowboarding, Ham Radio, Aviation
Causes/Charities: National Ski Patrol, Coast Guard Auxiliary, CERT
1. How did you get started in the business?
From age 10, I always wanted to work in the broadcasting business. My big break came at age 17, when I got a summer job as a disc-jockey at a small “Local Channel” AM station in Westerly, RI: WERI. “Little Dave” played the hits, or at least the more sedate ones, from 7-11:30 PM, then the station signed-off until 5:00 AM. I was paid the minimum wage of $1.50/hour, but I likely would have paid the station owner for the experience)
Within a year it became apparent that my technical skills exceeded my announcing ability, so I started a small contract engineering firm that serviced clients in the northeast. This enabled me to buy a small airplane to service my clients while still attending Ithaca College.
In 1972, armed with my fresh college diploma, I was anxious to enter the business and financial side of the broadcasting industry, but I didn’t want to do it via the traditional sales route. Then, good fortune struck. A classified ad resulted in my hiring by the boutique broadcast economic consulting firm Frazier, Gross & Clay, in Washington, DC. It was there, under the guiding hand of Buzz Gross, and Hank Clay, that I started my career as a full-time station appraiser. I traded an engineer’s pocket protector for an accountant’s green eye shade.
In 1975, I established my own firm, which would eventually become Hoffman Schutz Media Capital. Today, after appraising more than 4,000 radio and TV stations, most with site inspections, numerous expert witness assignments, and assisting with many loan workouts, I realize “What a Long, Strange Trip It’s Been” (Grateful Dead; Truckin’)
2. How are the overall prospects for the broadcast business in 2013 shaping up?
Overall, both radio and TV are seeing better performance than they had feared with the end of political advertising, and the uncertainty of “Sequestration.” I am seeing a lot of variation in revenue between markets. Some medium markets are showing significant growth while other markets are flat or down slightly. There doesn’t seem to be a direct correlation with local unemployment. Salt Lake City has a robust economy with only 5% unemployment, yet market radio revenues are flat.
3. Is there any hope for AM radio, and if so, what specifically can be done to rejuvenate the band?
Yes, there is hope for larger stations, with original programming, like KFI, that have had some success with talk hosts, like Conway, Phil Hendrie, and John & Ken. The FCC’s fostering of FM translators will help many smaller AM stations attain continuous, around-the-clock reception; something that wasn’t available to most of them after sunset.
4. What are your thoughts on the influx of FM translators and LPTVs expected this year, and do you think there will be any associated technical/interference problems?
I expect the situation to be manageable. I don’t expect any problems as severe as those associated with new “Docket 80-90” stations, and related changes to the allocation rules, 25 years ago. In the past 20 years, FM tuners have gotten demonstrably better, which will overcome many potential problems. When was the last time you used a radio with analog tuning?
5. What are your thoughts on the incentive auctions? Will the FCC be able to clear as much room as they need via repacking by 2014, given the fact that no network affiliates we’re aware of seem eager to participate?
Aside from the obvious spectrum speculation involving marginal independent stations (or minor affiliates), there may not be many stations anxiously seeking to cash-out of their FCC licenses, or agree to channel-sharing. Having served as an expert for NAB in the Supreme Court’s 1997 review of “Must Carry” regulations (“Turner vs. FCC”), many broadcasters may be understandably concerned about household access without the statutory rights inherent with an FCC license.
I am also not certain the wireless industry will be as aggressive in acquiring newly vacated spectrum in the 600 mHz band. Wireless operators paid a lot of money in the late 1990’s for the 700-mHz frequencies formerly used by channels 52-69. A lot of that spectrum remains today.
Can anyone be certain that pricing for 600 mHz will remain equally aggressive, particularly with the government (FCC and NTIA) making current “government” frequencies available for wireless?
6. What are your thoughts on incorporating digital elements into the broadcast revenue model most effectively?
The future for both radio and TV is “On Demand” access. Broadcasters are becoming aware that they must make their content available Anywhere, and At Any Time. This means their digital presence must be downloadable, and Mobile friendly. Content has to be reduced to “bite sized” portions, often under 10 minutes for radio. It must feature original material, or unique repackaging of commonly available programming. Ideally, access will be through a station-specific application.
Today, good broadcasters understand that successful radio and TV operation requires a lot more than simply selling a spot schedule. Broadcasting remains the most cost-effective marketing and promotion tool available to retailers. The challenge for operators is to position themselves as one-stop marketing consultants who can use a mixture of media to boost a client’s floor traffic and revenues.
7. Does local radio have a future, particularly among people under 30?
Yes it does, but it must continue its evolution as an essential local medium. In the late 1940s, the birth of television was anticipated to kill radio. The prophets of doom were partially correct. Radio, as an outlet for national entertainment programming, and a staple of evening entertainment in the home, waned.
Faced with the new entertainment, technology, called television, radio, morphed into a highly localized medium. Radio’s largest audiences shifted to the daylight hours, particularly mornings.
The emergence of the Internet as a new entertainment and information is source represents a challenge as profound as television was in the late 1940s. Once again, radio must evolve to meet this challenge.
Localism, coupled with, on-demand availability, is essential. Young people crave local information and social networking opportunities. The cliché question “what’s happening?” now is answered on the Internet.
Local radio broadcasters must build upon their unique market knowledge to forge mobile applications that will serve as a gateway to local entertainment, news and information.
In the past 15 years, as station ownership has consolidated, there has been a tendency to think of the radio industry as an increasingly standardized and monolithic business. This mindset is hurting radio broadcasters.
Successful radio is a local business. The most popular and profitable stations feature local program content. They also provide customized marketing and promotion solutions to retailers that go beyond simple spot advertising schedules.
If radio is to prosper in the future, it must embrace new technologies, but not stray from its roots as a source of unique local content.
