On March 22, at the close of Amusement Expo in Las Vegas, Andy Shaffer returns to normal operator life in Columbus, OH, after completing his one-year term as president of the Amusement and Music Operators Association. John Pascaretti of Warren, MI-based Pascaretti Enterprises, an equipment distributorship, will move into the trade association's top elected post.
Shaffer's family has been engaged in the coin-operated equipment business in central Ohio since the establishment of Shaffer Coin Machine Co. in 1929. That company, which became Shaffer Distributing in 1962, now has offices throughout the Midwest. Shaffer Services was organized in 1988 to develop, provide and promote on-location entertainment products and services. Andy Shaffer, who has served with the operation since 1990, was recently promoted from vice-president to president.
Shaffer's demanding schedule regularly had him on a plane to get him to state meetings throughout the year, making him one of the most-travelled AMOA presidents in recent history. Music piracy, direct jukebox sales and redemption-prize limits were among the hot topics during his term.
At the onset of taking office, Shaffer said one of his goals was to foster better communication between AMOA and operators. This involved his informal -- "I am an operator, just like you" -- approach in his role as AMOA spokesman when visiting state organizations. As part of the communications improvement promise, he's made himself available for frequent interviews with trade press. In his third interview with Vending Times' Marcus Webb, Shaffer shares some final thoughts as he prepares to exit the office of AMOA president.
1. Your term saw some big ups (the launch of VLTs in Illinois) and big downs (Superstorm Sandy and Newtown, CT). What is the state of the music and games industry after such a volatile year?
I don't think it was any more volatile than past years, but there were certainly some memorable moments that defined the past 12 months. What I saw and still see in my travels is an ongoing retooling of routes. I think more and more operators have come to understand that the status quo just doesn't cut it anymore. So while business is still very challenging, I'm optimistic about the changes and creativity I witnessed around the country.
2. A few months ago, you said you saw an industry renewal underway. What response have you received to that statement?
I saw operators committed to reinventing their businesses and manufacturers focused on making affordable products that appeal to our location customers. To me, this signals renewal and strongly suggests the industry is moving in the right direction.
3. What are some of the things you learned about the industry and its members during your year as president?
First and foremost is shared passion. Having been around this business a long time, I knew it existed, but not to the degree that I experienced firsthand during my visits with state groups. Second is the commitment to change, which again, is encouraging to me. And third, how generous our industry is. Examples of this generosity is AMOA and the American Amusement Machine Association's rallying its members in wake of Sandy, along with the Hesch Scholarship, AAMA's charity foundation and the fundraising by coin-op state groups around the country -- it's impressive.
4. In the business world at large, "innovation" is the hot buzzword. At the recent World Economic Forum in Davos, Yahoo's chief executive said the Internet has raced through four major eras in just 15 years. Is the amusement industry doing enough to innovate and cultivate creativity?
Historically, in regards to technology, the industry has not done enough, and much of the resistance has been at the operator level. For the most part, manufacturers in our industry have been much quicker to incorporate state-of-the-art technology into their products, but I'm buoyed by the shift I am seeing among my operator peers on the street. Sure, there are those who are hanging on, but these days I see that as the exception, not the rule.
5. What is your assessment of the Illinois video lottery program? A success, a disappointment or too early to tell?
It's a major victory for the operators and in particular the Illinois Coin Machine Operators Association. For years, the ICMOA worked tirelessly to clear the way for operator-run VLTs. While it took more than three years for the system to get up and running, it's finally in place. What is yet to be determined is whether the program will deliver the revenue that the state had originally projected. Regardless, Illinois has set the bar for others to follow.
6. You recently returned from California, where AMOA supported the formation of the California Entertainment Machine Association. Everyone is hoping that a new California trade organization will be more durable than the past three or four incarnations. Do you think this is likely?
It's very probable. I sense commitment among the new group's members. There are some new players in California who have pledged their support and involvement, which is key to any association's success. California's industry members are constantly facing issues that pose threats to the trade, but there is growing recognition that they need to be prepared. They are motivated and organized, and I am confident CEMA will evolve into a stable, engaged group for the long haul.
7. Maryland is the most recent state where regulation-happy officials seem ready to wipe out an important segment of the amusement industry with the stroke of a pen. Why does this keep happening?
I really don't think many elected officials -- in Maryland and other states -- have a clear understanding of our industry and the business models of the equipment we operate. That makes us vulnerable and only underscores the need for state associations to increase their relationship-building efforts with their state Legislatures. Frankly, we see abuse -- self-inflicted by operators -- with certain types of equipment. We can, and need to, do a better job of policing ourselves, or the cycle is destined to continue.
8. For decades, coin-op has been married to the tavern industry, and it's become a troubled marriage. America has waged a 40-year war on smoking and alcohol consumption, from statewide smoking bans to ever-tougher DUI enforcement. Now we're in the middle of a decade-long healthcare debate, with the result that this war on drinking and smoking is threatening to grow even more intense with new emphasis on "personal responsibility" insurance costs and "outcomes-based medicine." What can the industry do to reposition itself in this changed environment?
I maintain the worst is over when it comes to the impact of smoking bans and tougher DUI laws on our industry. Unless another Prohibition reenters the picture, I think we've reached bottom concerning the economic toll on the industry. We've withstood the body blows and are working on ways -- through music delivery, redemption, coin-op sports leagues and different types of locations, among other strategies -- to respond to the lifestyle shifts we've been facing in recent times.
9. During the past year, what progress has been made to help combat music piracy?
I don't think there were any breakthroughs per se in this area, as much as several initiatives that have been part of AMOA's ongoing effort to address music piracy. First, through our Jukebox Licensing Committee, AMOA continues to monitor complaints and problems about unlicensed content and illegal jukeboxes. We talk with our contacts at the RIAA and PROs regularly, and last year we had one-on-one meetings with both TouchTunes (in New York City) and AMI Entertainment (during the AAMA's board meeting in August in Chicago) to discuss licensing and piracy matters. As I've said a number of times about this and other issues, AMOA is not a policing agency. We serve as an industry liaison, spokespersons, negotiators and advocates, but at the end of the day we're a trade association, not an enforcement group. AMOA is committed to working towards an even playing field when it comes to licensing and piracy, and I think we kept that ball rolling as best we could last year.
10. Some of your early goals for the year included more transparency for AMOA and faster decision-making. Is AMOA moving faster and deliberating more openly these days? If so, how? If not, why not?
We've made progress on these two fronts. First, I've tried to be upfront and as complete as possible in my frequent interviews with the trade press. As I said at the outset of my term, I don't think AMOA was being secretive as much as we probably were not "telling our story" as proactively as we could or should have been. Second, I can think of several examples where we took action on calls or at meetings that, in the past, we might have "kicked the can" and deferred the decision to a future date. We have also streamlined processes internally, such as our accounts payables, by employing technology. Now, instead of sending checks back and forth in the mail for the appropriate signatures, our payables are processed via email and FAX -- much less paper, postage and time. We also reduced the size of the AMOA board; eliminated a couple of our working committees; restructured and simplified the dues renewal process; cut the show by one-half day in response to Amusement Expo exhibitor feedback; and, of course, very quickly mobilized and acted in response to Superstorm Sandy.
11. You said at the start of your term that you hoped to see the amusement industry bring back some of the fun it used to have, for operators and for customers. Is the industry's fun quotient rising or falling?
That's a work in progress, Marcus. I think we need to apply more resources to this, especially to bring more patrons and players into our locations. The R&D divisions at many of the industry's factories have done a good job of creating and delivering products that are fun. We need to help enhance that environment and enrich the entertainment experience for our locations' customers. Whether it's running contests or just by using pictures of people enjoying themselves on our Facebook pages, I know we possess the creative brainpower to do better. I say this because of the endless, spontaneous fun that I saw on display during our midyear meeting in Colorado. We know how to have a good time. Let's harness it and carry it through in our relationships with suppliers and customers.
12. Anything else you would like to add?
I'd like to thank the entire AMOA board of directors, the executive committee, executive vice-president Jack Kelleher and the AMOA staff for the guidance and support they've given me over the past year. It takes an active group to make things run smoothly, whether it's at a show or behind closed doors; and this group of dedicated people have AMOA's best interest at heart. Also, I am very excited for my friend John Pascaretti to assume the helm for the next year. I think his thoughtfulness and insights into our entire industry will be an enormous advantage as he drives the AMOA bus from 2013-'14. Thank you for Vending Times' coverage of our industry, as well.
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