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‘And Now for Our Commercial, Uninterrupted by Programming’

August 4, 1990

NEW YORK (AP) _ The invaders first came late at night, in the desperate hours before dawn. They crept onto television screens on independent stations and cable networks across the land. They were called ... infomercials.

Program-length commercials, also known as advertorials, infotainment, sellovision and ″the new tin men of television.″ They offer something new to insomniac shift-workers tired of ″Emergency 3/8″ reruns and grade B movies:

Continuous commercials uninterrupted by programs 3/8

The infomercials industry claims to sell at least $1 billion of products a year while buying more than $400 million in TV time for ″Amazing Discoveries″ with Mike Levey or ″Love Your Skin″ or pert, plump Richard Simmons and his Deal-a-Meal weight-loss system.

″Television stations are now getting paid for the half hours they used to pay for,″ said infomercial entrepreneur Greg Renker.

The year of destiny was 1984, when the deregulation frenzy prompted the Federal Communications Commission to drop its limits on the length of commercials. At the time, it seemed as innocent as deregulating thrifts.

The man of destiny was promoter Ray Lindstrom, who booked hotel seminars for real estate guru Paul Simon. ″We were having trouble getting people to the hotels,″ Lindstrom said in a 1985 interview. ″So instead we invited them to watch on television.″

Lindstrom put the seminar on tape, advertised it and aired it on two cable networks, all for about $100,000. On its first weekend, it ran just four times and sold $1 million in real estate courses.

In 1985, Lindstrom and partner Nancy Marcum Langston bought 2,700 hours of cable time for $8 million. By year’s end, they claimed $21 million in revenue from 70,000 sales of Simon’s course.

The population of real estate millionaires hadn’t noticeably increased, but Lindstrom and Ms. Langston became the leading marketers of home-study courses. Their success quickly brought imitators eager for the fast money.

It was what historians will call the industry’s Early, Sleazier Years. Second-tier celebrities fronted quasi-talk shows or bogus ″investigative reports″ that flogged potions to raise sexual potency or lower hairlines.

Typical of the era was the EuroTrym Diet Patch pitch. Touted by then- President Reagan’s son Michael, the patch was supposed to send electrical impulses to your brain to make you eat less. The trouble was it didn’t work.

Then there was the ″talk show″ with author Wayne Phillips, whose book said the federal government would give you a $25,000 grant to start a business. This was news to the government.

Some estimates peg the Phillips infomercial’s gross as high as $18 million. Eventually, though, the Federal Trade Commission forced the producers to pay $1.5 million to dissatisfied customers.

Shoddy products, false advertising and fly-by-night retailers who didn’t pay refunds put infomercials in disrepute. Complaints and calls for regulation of the industry got it investigated by Congress.

Infomercials were seen as ″image busters″ by prestige broadcasters. But they flourished in the ’80s; cable TV and independent stations were expanding rapidly, as were their appetites for programming.

And the fall of such well-heeled religious broadcasters as Jim and Tammy Bakker and Jimmy Swaggart - a traditional source of predawn revenue - may have prompted mainstream stations to reconsider.

″All of a sudden, cash programs become very attractive,″ said John Rohr, a programming analyst for Blair Television, station ad representative s. ″It’s free money. It’s an expediency.″

Today, even New York City’s stately WNBC, the NBC owned-and-operated flagship of the network, airs infomercials in its slack late-night and weekend daytime hours.

WWOR, a ″superstation″ seen on cable systems nationwide, airs more than 30 hours of infomercials a week, about 20 percent of its total air time.

At Group W’s KDKA in Pittsburgh, infomercials go where no other programming works. They’re ″a new type of advertising dollar and we feel we would be irresponsible if we did not take it,″ said program director Jayne Adair.

Today, the industry is dominated by a handful of companies. The largest, Synchronal Corp. (″Play the Piano Overnight with Alex Karras″) of New York City, claims about 40 percent of the market and $180 million in annual sales.

Three are Philadelphia based: American Telecast (″Deal a Meal″), with claimed annual sales of $100 million; Media Arts International, a descendant of the company Lindstrom and Ms. Langston founded, with $85 million sales; and Quantum Marketing (″the original hand-hammered wok 3/8″), with estimated sales of $70 million. Guthy-Renker Associates pegs its annual sales at $45 million.

Synchronal and Media Arts are ″integrated vertical marketers,″ developing, acquiring and packaging products, producing commercials, and operating their own telemarketing lines and shipping from their own warehouses.

Media Arts spends $41 million on TV ads a year. Its ubiquitous infomercial ″Amazing Discoveries″ is a slick, ″Geraldo″-style home products show that airs about 2,000 half-hours a month in the top 150 television markets.

″We’re on nine cable networks,″ said Ms. Langston. ″We’re on probably 400 broadcast stations. We’re reaching them through cable and broadcast in all major markets.″

Synchronal, like other infomercial producers, is launching its ventures in Europe this year, where 125 million television households wait.

Company president Richard E. Kaylor acknowledged that Synchronal has had its image problems. He quickly points out that its founder, Ira Smolev, left the company this year. Smolev pleaded guilty to mail fraud in 1984 and was hailed by a trade publication as ″the walking personification of the mail- order felon.″

Kaylor said his industry’s potential is forcing it to mature. Dishonest marketers, he said, ″are either being forced out, or are dropping out, or are being treated as if they are a scourge of the industry.″

″If these guys want to play it clean, more power to them,″ said Graydon Forrer, counsel to a subcommittee of the House Small Business Committee, which investigated the industry.

″The challenge that we face in government and as consumers is to have people beware,″ Forrer said. ″You’ve got to educate people to be skeptical viewers and skeptical buyers.″

″If the consumer becomes more skeptical, it will weed out those that are selling snake oil,″ said Greg Renker, who testified before the subcommittee hearings in May.

Renker is meeting with Congress, other infomercial entrepreneurs and FTC Director Barry J. Cutler to lay the groundwork for a trade association.

″We’re in business for the long-term,″ he said.

His company, Guthy-Renker Associates, begins the first nationwide ″entertainment″ infomercial next month - ″The $25,000 Telephone Trivia Challenge″ with Wink Martindale, former ″Tic-Tac-Dough″ game show host.

Viewers watch the show, learn to play and then dial a 900-number to compete against other viewers. Nothing is up for sale, no real estate courses, no kitchen implements; each call costs $2, and that is how the producers will make their profit.

″It may feel like a lottery,″ Renker said, ″but you can’t win the $25,000 unless you answer the most questions in the quickest time.″

Wink Martindale? Is nothing sacred?

End Adv for Weekend Editions, Aug. 4-5

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