Special Report on Commercial Production: So where’s the infomercial boom?

With nary an infomercial proposal coming through the fax, mainstream commercial production houses have become skeptical that the infomercial boom will live up to the hype. But infomercial pundits continue to say long-form spots are revving up in Canada....

With nary an infomercial proposal coming through the fax, mainstream commercial production houses have become skeptical that the infomercial boom will live up to the hype. But infomercial pundits continue to say long-form spots are revving up in Canada.

The Telecaster Committee of Canada, the private broadcaster and specialty channel commercial clearance organization, has received 90 infomercial applications since it published its guidelines earlier this year. To date, 52 have been passed and the rest are in process. None have been rejected, says Scott McClellan, Canadian Direct Marketing Association communication director.

The cdma estimates $30 million in sales revenue for infomercials in Canada this year and is projecting revenue to increase 10 times over the next five years. Bob Tadman, director of sales for the National Cable Network, parent company of the Value Plus Network, a 24-hour infomercial service which reaches 5.2 million Canadian households and has over 80 cable system affiliates across Canada and the u.s., says revenues for infomercials have tripled in the last four years, and doubled in the past year.

Within the next year, he estimates revenues of $15 million to $20 million in time buys and production values, as infomercial revenues tend to double or triple per year.

With numbers like this in hand, the question begs: Why aren’t commercial production companies swamped with 15- or 30-minute boards?

Most of them aren’t going through agencies, says Lisa Brown, infomercial consultant and writer. Production companies specializing in corporate video are picking up much of the business directly from the client, and the ones that land in the agencies’ laps are often farmed out to the same companies, says Brown.

‘On the client side, the perception is that the commercial production houses cost too much and take too long. The agencies are roadhousing much of it because their creatives are trained in a different discipline. Realistically, if you’re going to put a bunch of people on something new that’s going to take a long time, it’s cheaper to farm it out as opposed to having your senior creative guy pulling his hair out for a month.’

Despite the potential growth, the infomercial’s lowly reputation is still holding it back, says Ian French, president of Northern Lights Direct Response Television. ‘We’re still recovering from the early poor quality infomercial.’

But with high-quality corporate projects like Bell and Ford, the infomercial bad-production excuse is just that – an excuse. As production quality gets better and budgets get bigger, poor quality is becoming less and less of an issue, French adds.

Infomercial budgets can run anywhere from $10,000 to $250,000 and higher, although infomercial producers are wary of projects made at the lower end of the scale. Says French: ‘You can’t do an infomercial for $7,000 to $15,000, and for a corporation you would need $150,000 minimum.’ Brown agrees: ‘$60,000 to $70,000 is not enough to make an infomercial, $100,000 to $125,000 is a lot nicer to work with.’

Airtime costs vary just as much as production budgets: they can run as little as a per inquiry deal or as much as $2,000 for a half-hour, says Brown, with Value Plus running cheaper than Citytv or cfto.

At the very high end of the spectrum you have the P.E.I. Tourism infomercial which aired on CanWest Global and paid out $16,000 for its half-hour, says Rod Bell, vp of Toronto-based Channel 500, a direct-response television producer that has produced infomercials for ibm, Regal Capital Planners and Rogers Cantel. Under Value Plus’ new format – the channel will be going to time-specific airing in the fall – airtime will cost $650 for a half-hour in a major market like Toronto or Vancouver, and up to $1,000 for a half-hour slot in primetime.

‘The question is no longer whether a company, service or product should do an infomercial, but rather, how long to keep it running’ says Tadman. ‘The answer generally is as long as it is selling.’

It’s still difficult to measure how an infomercial sells, although the bottom line is often cost-per-order (dividing the number of orders into the cost of the media), and as long as you’re winning, you keep going, says Brown.

Others are using infomercials to promote brand awareness for products that are heading for the shelves but are not there yet. Once people see a lot of the product when they’re shopping, the media loses its oomph, and it’s time to go, she adds.

Because the Canadian infomercial is still coming into its own, not many studies have been done concerning audience demographics. A strange trend emerged from last year’s Value Plus statistics, which showed households with incomes of $40,000 and under taking 60% of the infomercial viewership, and the remaining 40% taken by households with incomes of $80,000 and up.

Brown isn’t exactly sure why this is so. ‘It may be as simple as the people in the middle are often two-income families and nobody’s home often enough or up late enough to watch them,’ he says. ‘That group may be busy buying cottages, paying off their mortgages. People in the polar groups may have a different kind of expendable income.’

As well, more people in their 50s and 60s seem to be watching. Bell notes more women watch infomercials, because many of the shows are geared toward health and beauty products.

Infomercials are generally shot and directed by long-format dops and directors who bring crews with them, says Brown, who has worked on projects for gm and The Royal Bank and has just finished a project for Power Rider in the u.s. A regular infomercial shoot will go five days, about twice the pace of a low-budget feature film.

Unlike spot directors who are paid by the day, infomercial directors are paid by the project, which includes preproduction and post involvement.

The biggest challenge for infomercials is the writing and directing, says French, whose company is currently working on a project for the Baby Blueprint System with Young and Rubicam. They have also done projects for Bell, Ford and gm.

‘Right now we do not have a talented pool of direct-response directors and writers in Canada. It’s so different from doing 30- or 60-second spots – you have to make your audience watch, stay tuned and then pick up the phone.’

As much as purveyors of the infomercial industry support the genre, they believe it is part of a bigger picture. ‘The trend that will emerge is creative, fully sponsored programming,’ says Brown.

‘The fine line between advertising and programming is going to get a lot finer, and pretty soon we won’t be able to tell them apart. Take Martha Stewart, for example. If you broke it down technically, it would be an infomercial.’

French puts it this way: ‘I don’t know if infomercials are catching on as much as they’re evolving from a pure direct-response system to a venue which builds brand awareness and allows advertisers to talk to their customers. In the u.s., the Corporate 500 are not interested in the direct sell, but the overall advertising potential, and this trend will unfold in Canada.’

Despite the barter potential, it still remains that infomercials are the current new phenomenon in Canada, says Brown. ‘Clients and agencies are still testing the waters, and right now no one is really making any money on it.’

In a recent quarterly meeting of the board of directors of the International Council of the National Academy of Television Arts and Sciences, the premise of whether the global tv market was ready to accept programming in lieu of cash from advertisers, is assessed in a panel on whether the international ad pie is big enough to go around.

Given a less than inspiring forecast for an increase in volume in the traditional commercial production sector, some production houses are looking to infomercials as opposed to other new media as a way of increasing business.

‘The other arms of new media are tech-heavy and commercials seem like a natural segue into infomercials,’ says Karen Silver, executive producer at The Artists Company Canada. Artists is just beginning to explore the infomercial market.

With regulations relaxed only this year, the Canadian infomercial industry has yet to prove how big a factor it may be in the overall production industry. Production has slowed while client, agency, and production house alike figure out how to make money from the commercial/program hybrid. In the meantime, it doesn’t hurt to make the connections, says Wayne Fenske, executive producer and owner of L.T.B. Productions.

To do that, Fenske suggests, go to the infomercial conferences cropping up periodically, talk to the players, go through the usual machinations necessary to land commercial work.

To date, ltb has one infomercial under its belt, 30 minutes for Iona Phantom Vacuum Cleaners, out of Iowa-based Hawthorne Communications.

The competition is just as fierce in this arena as it is with regular commercial production with the unstable cost-return ratio breeding stiff competition on budgets, says Fenske. ltb just lost a bid for a 30-minute talk show-type infomercial after someone came up with a way to do it for one-third the budget.

ltb will soldier on in its infomercial quest, says Fenske. ‘Production companies can’t limit what they have to offer anymore. We’re problem-solvers. Whatever the client needs to do is our job.’