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Looking Back: The First Five Decades

10/26/2007 08:00:00 PM Eastern

In 1957, when Frank Magid started his research and consulting firm, Frank N. Magid Associates, no one, particularly its founder, would have imagined that it would eventually grow into an influential global operation with over 300 employees that has worked with virtually all of the major media and entertainment industry players.

At the time, Magid was teaching statistics and anthropology at Coe College and sociology at the University of Iowa. But he knew almost nothing about the emerging technology called television and relatively little about the business world. Nor was the firm swimming in cash. Founded with borrowed money, its staff was tiny — Magid and his wife did everything — and the office unimpressive (it looked out on airshaft).

But what Magid lacked in resources, he more than made up for in his enthusiasm for cutting-edge research. “I was fascinated by the research that I saw taking place in the academic world and wanted to apply what I’d learned in my academic background to what was happening in the commercial sphere,” Frank Magid said.

His timing was also good. In the 1950s, as disposable income jumped and consumerism was becoming part of the national psyche, U.S. companies were increasingly using consumer research to expand sales. Magid quickly signed up his first three clients — a bank, a retailer and a utility.

His first media client was Cedar Rapids, Iowa, TV station WMT, which is now KGAN. “They hired us to help them improve their news,” Magid said. “We did a study for them and as a result their ratings soared.”

That success, led to work with the Time-Life station group, which was so impressed with the results, they ran ads in Broadcasting magazine (now Broadcasting & Cable), touting Magid’s work.

“They ran full-page ads with pictures of stacks and stacks of the interviews we had done and the two large binders we’d produced summarizing their findings,” Magid recalled. “They did that to show how hard they were working to better serve their audiences and make their programs more effective. As you can imagine that was about the best advertisement we could have gotten.”

Other station groups soon signed on as clients. Magid credits the early entrepreneurs of broadcast TV with having the vision to see the importance of his research and consulting service. “In the early days of broadcasting, the stations were owned by entrepreneurs who saw broadcasting as an adventure,” he said. “They were willing to experiment and willing to spend money to improve their business.”

According to clients and colleagues, Magid was also full of experimental ideas, all based on his careful research. Early on, he recommended that his radio clients get into FM and later he argued that broadcast TV stations should be investing in cable.

“They told me I was crazy,” he remembers. “The radio stations said that FM was just for classical music buffs” and “the TV stations said no one would ever pay for TV.”

Stations did listen, though, to the results of the company’s pioneering work in local TV news, and Magid’s work with them would eventually help transform the broadcast TV business.

“Early on, Frank realized the importance of morning television,” said Dick Haynes, the company’s senior vice president of research. “The conventional wisdom was that no one was watching at that hour but Frank’s research showed an interest in early morning news. His point was that no one was watching because there was nothing to watch.”

Eventually he convinced executives at WWL in New Orleans and KCRK in Sacramento, Calif., to try the idea, with much success. “Today it is one of the strongest areas revenue-wise for their news product,” Haynes said.

Magid also developed the “Action News” format, though the actual name came from the general manager of WPVI in Philadelphia. “I didn’t like the name but I was wrong,” Magid admitted.

That format was also widely imitated in the 1980s, prompting some critics to complain about the homogenization of the local news business.

Haynes, however, stresses that taking a cookie-cutter approach to the news business was always antithetical to the company’s philosophy. Before making recommendations, Magid carefully researched the particular needs of the market and then made specific recommendations, Haynes said.

“There is always a copycat syndrome in this business,” Haynes said. “Once something is a success, everyone wanted to copy it. But our position was always, not so fast. Don’t let this just be a slogan. You have to look at the local market, understand what your viewers want and really live up to your branding.”

Meanwhile, Magid continued to push into newer media. The firm had worked with Hubbard Broadcasting since the late 1960s, and Stanley S. Hubbard, now the chairman of Hubbard Broadcasting, was so impressed by the results that he hired Magid in 1981 to explore the idea of launching a satellite TV service.

The research proved that there was indeed a large potential market for direct-broadcast satellite service, and Hubbard, who is widely considered to be the father of satellite TV in the U.S., began a long odyssey to launch the country’s first digital DBS service. His U.S. Satellite Broadcasting finally bowed in 1994 and was subsequently sold to DirecTV.

“I had to make over 1,200 presentations and calls to finally raise the money,” Hubbard said. “Everyone laughed at us. Cable folks said that DBS stood for 'don’t be stupid.’ Frank really stuck his neck out to do research at a time when a lot of broadcasters and his clients didn’t want to see that happen. But his research showed there was a market and he was right.”

Hubbard continues to work with Magid on its broadcast stations and the ReelzChannel cable and satellite channel.

Throughout the firm’s history, the family was closely involved with the firm and clients were often at the house for dinner. But Frank Magid never pushed his two sons into the firm. One son, Chip Magid, went on to to be an attorney, though he also serves on the company’s board of directors.

As an undergraduate, Brent Magid had a summer job selling ad time at a Minneapolis TV station and he did his senior thesis at Princeton University on TV advertising. Brent, however, wanted to go into finance and after getting an MBA at the University of Chicago, he went to work for Chase Manhattan working on media deals.

In the early 1990s, when one of Magid’s senior executives suggested that they hire Brent to expand their international business, Frank Magid told his executives that he didn’t want to be involved in the decision on whether to hire his son. He wanted to avoid any appearance of favoring a family member or making Brent feel his father was putting pressure on him to return to the family business.

“Several months passed before Brent called to tell me that he was going to join the firm,” Frank said.

After several years of successfully expanding the international business into nearly three dozen territories, Brent returned from London to the company’s Iowa headquarters in late 1996.

In late 2001, Frank Magid took the title of chairman and stepped down from day-to-day operations so that Brent could assume the role of president and CEO.

The decision, Frank Magid admits, was a hard one, given how much he loved the firm and his work.

“I had the wonderful experience of being able to build this company and learn from my own mistakes,” he said. “Brent had more than proved he deserved the job. So, it would have been wrong for me to hover around and deny him the same experience I had of learning and building this company.”

The company’s subsequent expansion and growth, he added, has proven the wisdom of that choice.

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