Regarding Infomercials. Lenny I wish the company could try it out. The uniView is highly demonstrable, and offers a solution to the mass national retailer location problem, however, it does costs a lot of money to try it out. Money that Curtis Mathes does not have, based on the answers from Carl last night.
How much does it cost to produce an infomercial? It can very from $75,000 to $1 million, however, most fall in the $150,000 to $250,000 category. A typical demonstration show tends to fall in the lowest range of the spectrum. A typical talk-type show might cost $250,000, while an elaborate infomercial with actors and a story line would probably fall in the upper range.
How much does it cost to air an infomercial? Media is generally broken into two categories: the test and the roll-out. Media tests run anywhere from $25,000 to $100,000. They usually get their feet wet with about $10,000 and start doubling it every week. They pretty much know what you have after you spend $50,000.
The roll-out is another story. The bare minimum for a successful infomercial is $50,000 per week--generally they spend between $100,000 and $500,000 per week for a successful infomercial.
One main problem with the uniView is the manufacturing costs. Most products sold in infomercials have a minimum five-to-one mark-up. Curtis Mathes could try to find a partner or license their product to someone who can afford to play the game, but the mark-up is not there.
Informercials must also be an irresistible offer, and have an excellent price/value relationship. Television purchases are impulse decisions. Few companies succeed more often than one in every four attempts. That means it's likely that CM could invest $1 million before they see one dollar of return. |
