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A Shifting Market Shapes The Made For TV Market

Evening Edition

Above: The industry that made millions creating and selling infomercials honored some of the industry’s legends this week in San Diego. Direct Marketing Response inducted Suzanne Somers, Tony Little, and eight others into their Hall of Fame. KPBS Business and Environment Reporter Erik Anderson says the honors come as the industry copes with a shifting marketplace.

Aired 5/5/14 on KPBS News.

The industry that gave birth to infomercial stars Tony Little and Suzanne Somers adjusts to a changing media marketplace.

The industry that made millions creating and selling infomercials honored some of the industry's legends this week in San Diego.

Direct Marketing Response inducted Suzanne Somers, Tony Little and eight others into their Hall of Fame. But the honors come as the industry copes with a shifting marketplace.

It is a marketplace that inventor Steve Sublet wants a piece of. He developed a tool that resembles a skinny toy airplane. The wings actually are part of a clip that'll keep a cardboard box closed.

"Simply just slip the clip into each side…and you're done," he said.

The box is closed, it holds everything inside and the clip is easy to remove and replace.

Sublet is here hoping to find someone to help market, sell and distribute his ultimate box clip. He is looking for someone like A.J. Khubani.

A.J. Khubani

Khubani is the "As Seen On TV" king. He made a fortune selling products like the pocket hose, the hurricane mop and the wildly popular PedEgg.

The Pedegg is an egg-shaped product designed to remove calluses from the bottom of your feet.

"We launched it in 2007," Khubani said. "It is essentially a cheese grater, a cheese grater for your feet. But it really caught on. You never know why something catches on, but it just catches on fire and people start to talk about it."

Khubani's company sold 50 million of them and PedEggs are still the No. 1 foot care product sold at WalMart.

Khubani is prepared to spend both time and money on a potential winner. In some, cases he can invest millions on highly produced infomercials.

"The scale makes the investment worth while. So we can invest a lot of money in great productions," Khunbani said. "And even though 90 percent of our commercials fail, there's enough scale on a winning product to make it worthwhile."

Khubani knows not every product will be a hit, but he says sometimes the difference between success and failure is the pitch, or the pitchman.

Marc Gill hopes to be the next big thing on infomercials. He's sold products all his life and he said everyone does it.

"If you and your wife are deciding on a car and you making your argument. You're going to see in an instant that your cadence changes, maybe the pitch of your voice changes, something changes and you're in pitch mode," Gill said. "The difference here is we just kind of take it and elevate it."

Gill's profile is rising now that he's signed a national pitch deal with Ronco and he is optimistic about the future.

Response Magazine editor Thomas Haire tracks the industry.

He doesn't completely share Gill's practiced optimism but concedes television is still the primary vehicle to reach customers.

"People still come across that. It is in similar places, it still catches your eye," Haire said.

But the media landscape is changing. Putting merchandise in stores and selling directly to customers on the web are new ways to sell.

It is getting cheaper to buy time on television, but that's in part because audiences there are shrinking. Longform infomercials still exist, but they are slowly yielding to shorter, focused messages. The old formulas are showing their age.

"If the marketer like AJ were still trying to sell just product straight off of TV via a phone call. It would never work anymore. But that retail and web transition has really helped bring it to a new level," Haire said.

The industry is being forced to adapt because phones and tablets give customers unprecedented control over the media messages they consume.

"It is an entrepreneurial business at heart. They're not slow moving, like a GE-type of behemoth company," Haire said. "They're able to be very agile. And I think that's going to be a key for them going forward."

That may be the strongest vote of confidence for an industry that thrives on creating and solving problems with an innovative product.

And as infomercial king A.J. Khubani puts it, the challenge is to find the next big thing.

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