ShopatHome TV Cancelled
By George Anderson
Consumers are evidently willing to accept hundreds of cable channels on their televisions, but four home shopping channels is at least one too many.
Joe Bonner, an analyst with Argus Research Co., told The Tennessean, “You have QVC, you have The Home Shopping Network, you have ShopNBC, do you really need a fourth home shopping network?”
The answer from consumers and E.W. Scripps Co. was clearly no as it was announced that the Shop at Home television business will go off the air and internet by the end of June.
Scripps’ spokesperson Tim Stautberg said a lot of Shop at Home’s problems came down to where it was on the set top box. “We just found it exceedingly difficult to get really strong channel positions on the cable lineups,” he said.
“We’ve been looking for someone to buy the business since January,’ he said. “We were in line to lose money in the second quarter with little hope of stemming those losses.”
Moderator’s Comment: What do you see as the future of home shopping via television? Do these types of channels or targeted infomercials hold the potential
for traditional retailers to grow their business? – George Anderson
– Moderator
The two observations made that most resonate with me are that shopping channels need to be entertaining if they’re going to compete with online shopping and they need to have attractive offerings that people want to buy. We have said frequently before that consumers enjoy choice in the ways they shop; no single individual always shops through the same type of outlet. There will be room for clicks, bricks and television so long as there are shoppers looking for ways to spend their money.
As the masses become more familiar and comfortable with Internet Shopping, Television Shopping programs will continue to lose customers to online networks. The availability of broad band is also facilitating the growth of online and the likely decline of television shopping.
There are a number of reasons likely to be driving this transference, but key among them are the ability to select so many different brands and options online, whereas TV shopping is much more confined.
Price comparison sites and additional consumer information available online is also another competitive advantage for online versus television.
Others that have asserted that television shopping must be entertaining are absolutely on target. Television shopping that is fast paced with occasional celebrity endorsements will survive in the short run, but without this component, the exodus will continue.
TV Home Shopping like every format…only the strong will survive. The issues here are too many channels and competition from the INTERNET. Just like Department Stores, this format will not go away, but is unlikely to grow. Online shopping is the growth area for the foreseeable future.
Every idea that has success with consumers generates similar ideas. Only the ones that are creating their product or service with consumer insight will survive because they understand the consumers and meet their needs. Not all forms of the same idea hit the consumer sweet spot equally as well. Consumers don’t always want more of the same – their favorite will do just fine.
I’ve always been bothered by the terminology used to described this use of the broadcast medium. This is not shopping. It does deliver impulse sales and some valuable market research, but it is closer to the reality and game show experience. I think the audience for this type of entertainment is being diluted across glitzier TV options such as American Idol and Deal or No Deal, not the Internet.
Home shopping would grow faster if (1) the values were better (2) the entity running the show would give profit participation to the cable companies and (3) if the shows had entertainment value. Unfortunately, the current lineup keeps repeating the same poor values with minimal entertainment value. So the business will grow at a mature pace until some creativity arrives.
Traditional shopping networks must evolve or perish. With the greater growth of the Internet and evolving offerings like On-Demand TV, fringe offerings like shopping networks must change their approach to be able to better respond to viewer’s needs. This will include shifting their offering to a “real-time” online offering, which may very well end-up replacing the TV offering. As we see online and cable start to fuse, we will quickly find that the individual offerings of the online environment is more suited to shopping than TV. Add to this tape delayed or re-broadcast shows, complete with viewer feedback and updated inventories, and there is no true reason to have TV, when an Internet offering will give viewers everything which they need. The shift to the Internet, as well as moving to an Internet “live” service will force the existing 3 shopping TV channels to either adapt or perish.
Recently, there was a survey released by Bolt Media (and published in Advertising Age) that showed only one in four people between the ages of 12 and 34 could name all four major broadcast networks (CBS, NBC, ABC, Fox). Home shopping? That seems so 1980s! The emerging Generation Y was raised on the Internet, and as they begin to form households in the coming years it will be the Internet — not television, not even retail stores — that will be not only the primary disseminators of information, but also their primary shopping vehicle.
Mark Lilien again has consistently offered a very insightful viewpoint. He is right that products sold on TV shopping networks are poor values. As a part-time coin collector, I am appalled to see coins sold at 3 to 4 times what collectors would normally pay. But when I think about this more, I realize that just about any item that is advertised or sold on television is a poor value. The cost of TV exposure must be passed on in the price. It seems to me that shopping networks are basically an insult to the average person’s intelligence.