Wide awake at 2 a.m., cable viewers have proven they will land their surfing TV remotes serendipitously on infomercials and then buy the goods peddled. What's unproven is whether consumers will steer their remotes to a channel specifically devoted to infomercials. Daphne Kwon believes they will.
The former chief financial officer of the Oxygen network plans to move infomercials into the light of day, and night, later this year with the launch of Expo TV as a 24/7 infomercial channel.
Expo TV has been available since last October as a video-on-demand option on Insight Communications' cable channels. Bresnan Communications rolled out the VOD service May 1.
Ms. Kwon holds the title of CEO at Expo Communications and has amassed an array of cable heavy-hitters for her board. She says Expo TV serves advertisers' desire to move away from the 30-second spot. Expo TV is primarily targeting direct marketers and others, such as print catalogs, that haven't traditionally used TV because sales performance is hard to track on 30-second spots, she says.
Direct-sales TV, including infomercials, has been estimated to be worth more than $3 billion in media billings. But Expo TV is likely to confront challenges in securing 24/7, or "linear," distribution.
Expo TV will include themed programming blocks around the product videos. That includes programs like "Plug & Play" on home electronics and "Now Boarding" on the travel industry.
Ms. Kwon hopes to distinguish Expo TV in the infomercial world with this programming ecosystem-a unique and trustworthy home for long-form marketing and product information, she says. "If you are thinking about buying a computer, [we could talk about] what is RAM and why do you care?" she says.
The Expo TV VOD service is segmented into categories likes "Get Fit," "Home Improvement" and "Gifts for Him." It currently includes about 40 product videos.
Pam Euler Halling, Insight senior VP-marketing and programming, says the VOD service has performed well and revenue has risen each month since October. "We didn't have any shopping-on-demand on our server so we felt it's been beneficial," she says.
Expo TV is also among the many networks Insight is considering. "At this point we would like to see it build as a valuable aspect of our on-demand offering," Ms. Halling says.
Bresnan spokeswoman Maureen Huff describes the Expo TV VOD service as compelling and unique content.
Expo TV isn't asking for license fees, and is offering cable and satellite partners a share of the transactional revenue. The network's advertisers include Sharper Image, Jack La Lanne Juicer, Total Gym, bareMinerals makeup and Philosophy makeup.
Ms. Kwon says that when she worked on new-business ventures while at Disney/ABC Cable Networks and later at Oxygen, she was keenly aware of the profit potential for infomercials, because paid programming has very few expenses booked against it. Infomercials have evolved over the last decade and don't include as many shoddy weight-loss products and poorly made appliances as in the past, she says.
Today, products offered through infomercials are also sold in reputable retail stores like Wal-Mart, Sam's Club and Macy's. "Direct marketing is a tremendous driver of consumer behavior," Ms. Kwon says.
While Expo TV does have its supporters, some infomercial experts are skeptical about the viability of a full-time network. People get hooked by infomercials because they stumble upon them rather than look for them, says Steve Sheiner, president of NuGlow anti-aging products, a regular infomercial advertiser.
Expo TV is likely going to have a tough time attracting traditional infomercial marketers because it has a low subscriber base, says Michael Kokernak, president of Backchannelmedia, a Web-enabled direct-response media planning and buying company in Boston.
Industry insiders also say privately that the service makes more sense as a VOD destination than a cable channel. While many traditional marketers are branching into long-form programming today, their longer "ads" don't have 800-numbers posted on them. BMW Films, Procter & Gamble Co.'s Old Spice and Coca-Cola have all created long-form spots for VOD, but they're more akin to branded entertainment than a call to action.
Ms. Kwon may not be the only one readying an infomercial network. Media reports circulated last month that Paxson Communications would abandon the family-friendly programming strategy of its Pax network in favor of running all infomercials. But a Paxson spokeswoman told Advertising Age the network has no plans to increase or decrease the amount of infomercials it carries.
Expo TV is plowing ahead and has a formidable board and backers. Investors include Nick Nicholas, former CEO of Time Warner, and Thayer Bigelow, former president of HBO.
"What Expo is doing is taking the kind of information you get on the Internet and doing it on cable and in a way that isn't being done on TV today," says Lisa Gersh Hall, president-chief operating officer of Oxygen Media and Expo TV board member.
Eye on prize
The Electronic Retailing Web site says direct-response TV generated $167 billion in revenue in 2004. It notes that there were 714 new infomercials last year