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A Net for Infomercials

Mar 14, 2005  •  Post A Comment

A former Oxygen executive has lined up an impressive array of cable industry executives to support her plan to launch a cable service that embraces infomercials and generates revenue for cable operators.

Daphne Kwon, former chief financial officer of Oxygen, said Expo TV aims to create a more trustworthy environment for infomercials by running only those that pitch legitimate products with plausible claims and seek repeat customers.

On Expo TV’s board are Dick Beahrs, former president of Court TV, and Lisa Gersh, president and chief operating officer Oxygen Media. Backers included Nick Nicholas, former CEO of Time Warner, and Thayer Bigelow, former president of HBO.

Ms. Kwon sees Expo TV providing information to consumers about products they want to buy, unlike home shopping channels, which are geared to simply sell goods.

Ms. Kwon said the channel is assuring cable operators that it will never charge a license fee. In fact, it is offering operators a cut of the merchandise sold through the channel. She expects to lose money for four years and declined to say how much money she has raised from her backers.

She added that while the Internet has blossomed as a way for consumers to get product information, consumer information on TV hasn’t changed, because “You can’t explain anything in a 30-second commercial.”

Long-form video has an advantage over the Internet because it’s “more compelling than television” for demonstrating products.

In addition to infomercials the network will create its own shows with experts who will demonstrate products within a category and give tips on the best ways to buy them. Ms. Kwon said it hasn’t been decided whether manufacturers will pay to have their products included in those shows.

With most cable operators very reluctant to add any linear channels these days, Expo TV is also offering a video-on-demand service as well as a broadband Internet site.

The VOD service has been running on Insight Communications since October 2004. On the service, the infomercials are arranged by categories and subcategories, such as gifts, gifts for him, gifts for her and Mother’s Day gifts. Ms. Kwon said. There has been significant sales activities on Insight, and all of the content on the service has been viewed by Insight subscribers.

“The popularity and usage of on-demand programming continues to grow and we were pleased to expand our service with Expo’s unique offering,” said Pamela Euler Halling, senior VP for marketing and programming at Insight.

Ms. Kwon said Expo TV rejects about one-third of the infomercials it gets. Among those rejected are get-rich-quick programs and ingestive products. Sometimes, she said, the products are good but the infomercial makes misleading claims.

Expo’s Web site will let viewers provide feedback and reviews of the programs and infomercials on the channel.