Back in the old days television stations signed off the air late in the evening and resumed early the morning, but in 1984 the FCC deregulated broadcast television which allowed stations to remain in the air 24 hours a day. Because not too many people were watching in the late night and wee hours of the morning stations offered those time slots dirt cheap and giving tremendous growth opportunities for the infomercial business.
Today, the infomercial market is a multi-billion dollar industry and even though most people view them negatively, they are still an enormous money maker and manufacturers are willing to take advantage of their customers by misleading advertising, poor quality products, high shipping and handling fees and poor customer service. What they want is your credit card number.
Infomercials are formatted in one of two ways:
1- They look like talk shows where an actor portrays the host and interviews one or more so called experts.
2- The pitchman demonstrate the product.
What makes them so successful? Huge profits! For example, if you pay $19.95 for for some piece of junk, it probably ony costs $4-$5 (or less) to produce it. Add grossly inflated shipping and handling fees and they make even more money. By the way, what, exactly, is a handling fee?!
Many informercials claim their item is not sold in stores, but go to the local drug store and they have a whole shelf full of the junk. That's because infomercials often act as a launch pad for manufacturers that don’t have the resources to move directly into the retail market. Even if the product is not successful, infomercials cost about ten percent of traditional advertising campaigns, so even if the product fails, infomercials are still cheaper.
Informercials sell hope. They make you feel good and make you believe that their product really can help you do whatever it is supposed to do. Maybe it really will get bugs off the grill of my car or help me see better at night. Maybe it really will get rid of pimples when nothing else has worked.
Why is almost everything priced $19.95? Because marketers have learned that this price is the sweet spot. Most people are willing to gamble $20 on a product, but $30 is too high and $10 sounds like it's cheaply constructed. Surprise...products rarely perform as well as advertised and the manner in which they’re sold could be considered somewhat dishonest.
A few have been masters of infomercials. Kevin Trudeau and Don Lapre come to mind. Kevin Mark Trudeau (born February 6, 1963) is an author, entrepreneur, pool enthusiast, and convicted fraudster whose ubiquitous infomercials promoting unsubstantiated health, diet, and financial remedies earned him a fortune and a prison sentence.
In the early 1990s, Trudeau, who it turned out is a crooked as a dog's hind leg, was convicted of larceny and credit card fraud. In 1998, the Federal Trade Commission accused him of grossly misrepresenting the contents of his book, The Weight-Loss Cure "They" Don't Want You to Know About. In a 2004 settlement, he agreed to pay a $500,000 fine and cease marketing all products except his books, which are protected under the First Amendment.
But, guess what? Being a fraudster, in 2011 he was fined $37.6 million for violating the 2004 settlement and ordered to post a $2 million bond before engaging in any future infomercial advertising. In 2013, facing further prosecution for violations of the 2011 agreement and non-payment of the $37-million judgment, Trudeau filed for bankruptcy protection. His claims of insolvency were challenged by FTC lawyers who maintained that he was hiding money in shell companies and cited examples of continued lavish spending, such as $359 for a haircut. In November 2013, Trudeau was convicted of criminal contempt and is currently serving a 10-year sentence in a Federal Prison.
Don Lapre (May 19, 1964 – October 2, 2011) was an multi-level marketing and infomercial salesman. His work involved product packages such as "The Greatest Vitamin in the World" and "Making Money Secrets". Lapre was criticized as selling questionable business plans that often did not work for his clients.
In June 2011, Lapre was charged with 41 counts of conspiracy, mail fraud, wire fraud, and promotional money laundering related to his Internet businesses. He was arrested on June 24, 2011, for failing to appear in court to face these charges.
On June 27, 2011, Lapre was arrested in Tempe, Arizona, at a Life Time Fitness center, where he had reportedly lived for two days, with serious self-inflicted knife wounds to his groin. The wounds led au
thorities to believe Lapre had attempted suicide while at the Lifetime Fitness by attempting to sever the femoral artery in his legs.
Lapre died, 47 years too late, in custody from an apparent suicide on October 2, 2011, while in jail awaiting his trial, which was scheduled to begin on October 4, 2011. Lapre died from severe blood loss after cutting his throat with a razor blade. The autopsy report stated that Lapre died of massive blood loss and had wrapped himself in sheets to conceal any blood loss from prison officials.
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