Through their Los Angeles-based marketing company, JB Worldwide Communications, and its partner, Blagman Media International, Los Angeles, the entrepreneurs are preparing to launch the first regional home shopping network in Eastern Europe this January.
Dubbed the World Shopping Network, the Los Angeles-based service will offer products and news via satellite to consumers who live too far from urban areas to have broad buying opportunities and who appreciate the lower prices offered by TV marketing.
Start-up and operational costs are estimated to be $6.1 million, but Mr. Blagman believes JB Worldwide "is looking at a quick turnaround .*.*. It's too soon to say, but [revenue] goals are hefty." Revenue is expected to be $5.8 million the first year and as high as $39 million in 1998.
The network plans localized programming to 350 million consumers, coordinated from a single source and transmitted via satellite to broadcasters in at least 13 countries, in as many languages.
Rupert Scott, director of international distribution for Williams Worldwide Television, a product supplier in the U.K., said home shopping has a "universal appeal" and offers "value for money" that will make it a success in Eastern Europe.
"The development of home shopping, as in infomercials and direct response television, has expanded enormously in Eastern Europe in the last three or four years," Mr. Scott said. "It is attracting a larger market share year on year, but our ideal products have to be at a right price."
Home shopping programming is already available through local stations in several countries, including Albania, the Czech Republic, Hungary and Romania. In addition, Western programming from Quantum International reaches Eastern European viewers through CNN International, Eurosport, NBC Super Channel and other satellite channels.
The network is the first attempt to bring regional home shopping to Eastern Europe, but it will not look or sound the same in all markets. JB Worldwide will localize the home shopping market by fine-tuning product selection for different markets and broadcasting in local languages. For example, Mr. Blagman said, "In Poland, perfume is very hot right now, and in some countries clothing and shoes are particularly important, such as in Russia. Also in Russia, we expect our collectibles from Hollywood, Marilyn Monroe-type things, to be very popular."
Some say this is easier said than done. Prague-based marketing consultant Mark Anderson is optimistic about the potential of home shopping in Eastern Europe, but thinks JB Worldwide faces challenges. Without the financial muscle of a multinational, he said, "it could be hit-or-miss, both in determining what products to market and then what advertising to use to motivate consumers."
Other initial challenges are arranging payment systems where credit cards are scarce and finding solutions to antiquated telephone and postal networks.
JB Worldwide is using local companies to get past these hurdles, Mr. Blagman said. Since the fall of communism, he and Mr. Jucaud have organized programming markets such as DISCOP (short for Discount Programs) and trade fairs such as Infomarket, to gain experience in the region and find the best strategic partners.
Nearly a million dollars and six years into the project, "we know what companies to work with. We know who's good and who pays their bills," he said.
Phase one is scheduled to launch in January in the Czech Republic, Hungary, Poland, Romania and Slovenia. The network will come to Bulgaria, Croatia, Lithuania and Russia in late 1997. Then, in early 1998, the network will move into Estonia, Latvia, Macedonia and Slovakia. The network will handle product fulfillment in association with Williams Worldwide Television and Guthy/Renker, Santa Monica, Calif.
Many details to work out
TV marketing and fulfillment in each market will be coordinated by Arpad Buranyi, head of the Budapest-based marketing company TV Shop Hungary.
In most cases, consumers will phone in orders and make payments with either cash or credit card upon delivery by special couriers.
JB Worldwide also is negotiating with news services about providing 3- to 5-minute news blocks per hour. Commercial slots during news breaks will be sold, and title sponsorship opportunities will be offered each hour.
The combination of "regional resources and a local identity will make us strong," Mr. Jucaud said. "The key is localizing. We're not going to dump products in this market. We will find out what people want."