Advertising:
Out of Step: Infomercial Makers Spar Over
Fitness Flyer
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By Lisa Brownlee
Staff Reporter of The Wall Street Journal
"Are you ready? Ready to suit up and take control?" calls the announcer at the start of a glitzy infomercial for the Fitness
Flyer, an exercise machine that promises a full-body workout to "reveal the beautiful body you've always dreamed of."
The ad, featuring Leisa Hart -- known for her "Buns of Steel" and "Abs of Steel" workout videos -- has made the Fitness
Flyer one of the hottest products in the world of infomercials. It also has the machine's marketers flexing their muscles in
court.
National Media Corp. and Guthy-Renker Corp., the infomercial industry's two biggest players, are embroiled in a legal fight
over the product. Guthy-Renker, which created the Fitness Flyer and then teamed up with National Media to market it, is
charging National Media in state and federal courts in Los Angeles with airing the infomercial excessively, and then
advertising a knock-off called the Fitness Strider. National Media has fired back a suit in state court in Los Angeles claiming
that Guthy-Renker didn't deliver enough Fitness Flyers to National Media.
The spat sheds a spotlight on the ultracompetitive infomercial business, where a monster fad can make or break a year and
copycats are always on the horizon. The pressure to come up with breakthrough products -- and keep them -- is
"tremendous," says Greg Renker, president and co-principal of Guthy-Renker.
A lot is riding on the Fitness Flyer, which takes users on a walk in the air, each foot on a platform that swings back and
forth. Infomercial producers consider an item hot if it generates more than $4,000 in sales for every $1,000 spent on media.
In an October market test of the Fitness Flyer, sales were about $5,000, Guthy-Renker says. Officials there claim total sales
could reach $100 million this year. Guthy-Renker, with annual revenue of more than $300 million, expects the Fitness Flyer
to account for more than 20% of its revenue this year.
When a company spots a big hit, it tries to ride it hard, and similar products usually follow. Last year, when National
Media's Ab Roller Plus was one of the hottest products, consumers also saw infomercials for the Perfect Abs, the Ab
Trainer, the Ab Shaper, the Ab Sculptor, Ab Works and Ab Coach.
The Fitness Flyer, too, faces competition: Jordan Whitney Greensheet, a report that tracks and reviews infomercials, counts
more than half-a-dozen exercisers that feature swinging platforms for the feet. Among them are the InStride Walker, the
SkyTrek, the Gazelle Glider, the Health Walker, the Airofit and the Cloud Walker.
The story of the Fitness Flyer begins at the Palm Desert, Calif., offices of Guthy-Renker, which bills itself as the largest
domestic buyer of paid programming. Founded in 1988 by entrepreneurs Bill Guthy and Mr. Renker, it hit big with products
like the Anthony Robbins Personal Power motivational tapes and the Perfect Smile teeth whitener. Today, it spends more
than $100 million a year on cable and broadcast-TV time in the U.S. The company is 37.5%-controlled by Rupert Murdoch's
News Corp.
"We get thousands and thousands of product submissions each year and we're constantly looking for great, unique
products," says Ben Van de Bunt, executive vice president. Guthy-Renker's fitness division alone has a staff of 16 that
combs the pages of fitness magazines, visits trade shows and studies new product ideas submitted by scientists, amateur
inventors and entrepreneurs.
Last year, the fitness staff settled on a product by a small Rockaway, N.J., fitness-equipment marketer called LifeGear Inc.
Closely held LifeGear had come up with a steel machine that offered a workout of the arms and legs, linking the limbs in
synchronized movement. Guthy-Renker signed a deal with LifeGear to develop the product together, and took the product to
the market, a process that took less than nine months.
First, Guthy-Renker added features like chrome accents and a "tummy pad" to make the contraption easier to use.
Guthy-Renker also made the machine's resistance adjustable so that users could control the strain of their workouts and
developed a version that folded up for easier storage. Then Guthy-Renker lined up factories in Asia to start cranking out the
Fitness Flyer. Searching for a low-cost design that would entice TV watchers, it went through 30 different prototypes and
finally came up with a design that factories -- mostly in Taiwan -- could mass-produce.
The TV marketer took the Fitness Flyer to Adelphi University's human-performance laboratory in Garden City, N.Y., where
researchers measured calories expended and the aerobic value of moving the arms and legs at the same time. Other
researchers studied the equipment's impact on the knees. The result: The Fitness Flyer infomercial could claim a low-impact
workout that burns "twice as many calories as an ordinary treadmill."
When it came time to make the infomercial, Guthy-Renker made a fateful decision to team up with one of its biggest rivals:
National Media, the only major publicly traded company in the infomercial business, with fiscal 1996 revenue of $292.6
million. Based in Philadelphia and expanding quickly overseas, National Media has programming in more than 70 countries
and 25 languages, reducing its reliance on any single country's big hits.
In the Flyer venture, National Media would pay for half of the cost of producing the half-hour infomercial at its
DirectAmerica unit, whose budget was less than $500,000. In return, it would have rights to sell the product overseas and on
the Nashville Network and a handful of other domestic media outlets where it has long-term programming contracts.
Tension between Guthy-Renker and National Media broke out soon after the Fitness Flyer hit the airwaves. The commercial,
offering the product for four payments of $49.95, plus shipping and handling, ignited a heavy volume of customer orders.
"Back in October, when we knew we had a hit, we started scrambling to make as much product as we possibly could," Mr.
Van de Bunt says. At the same time, "we put ourselves on a self-imposed media diet," limiting the infomercial's airing.
Meanwhile, National Media continued to air the program, fueling consumer demand, says Guthy-Renker. National Media
had ordered tens of thousands of Fitness Flyers from Guthy-Renker by early January. But last month, after a delay in
stocking the Flyer, National Media began running an infomercial for the competing Fitness Strider.
National Media says the Fitness Flyers weren't coming in fast enough and it had an obligation to its shareholders and its
customers to either make sure that it got a fair supply of product or come up with an alternative. "Instead of providing
National Media with half of all Fitness Flyer production, Guthy-Renker has diverted substantially all of the Fitness Flyer
production to itself to satisfy its own consumer orders," National Media's lawsuit contends.
Guthy-Renker's Mr. Van de Bunt counters: "We felt they were asking for too much inventory. . . . We just didn't want them
to sell units for which we didn't have inventory."
The upshot: A judge in the federal case filed by Guthy-Renker alleging copyright infringement has barred National Media
temporarily from running its Fitness Strider infomercial in the U.S. The feuding companies are in talks aimed at reaching a
settlement. A National Media spokesman says the companies are close to resolving the dispute, but Guthy-Renker says talks
are continuing.
Guthy-Renker insiders fret that National Media may put more effort into pushing its Strider overseas, leaving the Flyer on
the shelf. National Media says international distribution will depend on how the dispute is resolved and on future supplies of
the Fitness Flyer. "We created the winning show. Their obligation was to supply the product," says Mark Hershhorn,
president and chief executive of National Media. |
