Beech Tree News Network

Against The Grain by: Andy Sullivan

The word infomercial is a combination of the word’s “information” and “commercial”.  Late nights in the ‘90’s are brought to you by the infomercial.  From this fusion of entertainment and advertising, fortunes are cooked up.   But where there’s wealth, there are wolves praying on the vulnerable and gullible.  Hucksters con people out of millions while the government struggles to keep them off the air.  

In what is known as the post-Cold War decade, late nights on tv become America’s swap meet. Where the only thing as famous as the “as seen on tv” products are the increasingly famous faces hawking their wares.  Some of the top performers in the industry would make $40-80 million a year.  The seeds of the ‘90’s infomercial boom are planted 41 years earlier when the first direct to consumer half-hour television show was broadcast on television.  The original 1949 Vitamix infomercial can be found on YouTube. With so few tv channels, tv time was valuable.  Plus, the government slaps a limit on the length of commercial messages.  For that reason, short ads between shows became the advertising model.  In the early ‘80’s, everything began to change.

“I’m sitting there watching cable tv.  I got to the last channel and it was the Discovery Channel.  They just had three colored bars on the screen.  That’s when a light bulb went off in my head”, says Kevin Harrington.  Harrington started producing long commercials in 1980 that today are called infomercials.  “I called the cable company.  They said Discovery is a brand-new channel and only had 18 hours of programming.  I asked what they were going to do with the other 6 hours? They said “nothing”.  I went to Discovery Nationwide, and we signed a multi-year contract for six hours a day on the Discovery Channel”.

Harrington ran into a problem.  Government regulations still restrict the length of ads allowed on tv.  In 1984, the former actor turned President selling Morning in America delivers a wake-up call for the infomercial industry.  President Reagan deregulated the amount of advertising minutes you could put on television per hour.  With time limits lifted, the half-hour, single product infomercial was reborn.  From real estate, the Flo-bee, weight loss pills and more, the products were endless.  For the infomercial to succeed, the person doing the pitching must be an ace.  Kevin Harrington makes it his business to sign all-stars to host.

Arnold Morris of the Ginsu knife was the first signed.  Harrington pitched an idea to him.  Soon, Morris was on Late Night with David Letterman and the Tonight Show starring Johnny Carson.  Phone lines lit up and lots of products were sold as a result of the publicity.  Many infomercial hosts would soon become famous.

Kevin Trudeau, infomercial pitchman and entrepreneur, started his first mail-order business while still in middle school. By the late ‘80’s, he’s selling a memory training program he claims changed his life.  “I had a learning disability.  I stuttered.  I took this learning course, and it improved my memory so dramatically I wanted to tell the world”.  In 1989, he gets the chance to tell Kevin Harrington.  They did the first mega memory infomercial.  It sold $450 million copies over the next decade.  

By 1990, almost every network is selling airtime to infomercials, often burying them in the wee hours of the morning or late at night.  It was vital to get a celebrity to do an infomercial.  People would be flipping channels and see, perhaps, Cher.  They’d wonder what she was doing, and tune to that channel.  The next year, the infomercial business hauls in $750 million a year. Comedy predicts the next trend in late night infomercials.  Decades ago, there was an SNL segment called Telepshychic(get it? Tell a psychic) where Dan Akroyd picks up a phone and says “hello.  Telepsychic”.  Maybe somebody was watching that skit and said “that’s a moneymaker.  We’re doing this”.  Over a decade after that SNL sketch, telepsychics are the hottest new thing in infomercials.  Across the country, customers start spending more money on self-proclaimed psychics, partly because of the show’s celebrity hosts.

Dionne Warwick, who topped the charts in the early ‘80’s with “That’s What Friends Are For”, got involved because of the money.  Her career was bobbing along, and this business was a very good uptick for her.  The Psychic Friends Network was even better for the businessman who creates it, Mike Lasky.  He had a background in direct marketing and gambling.  Lasky first wagers that he can eliminate the expensive call center.  He took calls and dispensed them to the homes of psychics across the country.  He doubles down on a promising new phone service that will prove the old adage “time is money”.

In the ‘90’s, 1-900 numbers made the companies silent partners in the increasingly sleazy chatline industry.  “The phone companies got 30-40% of the revenue and that money was into the hundreds and millions of dollars”, says Lasky.  Belief is a powerful, and profitable, thing.  By the mid- ‘90’s, the Psychic Friends Network is earning almost $125 million a year, making it the second-highest grossing infomercial on tv, after Workout starring Jane Fonda.  The callers at Psychic Friends aren’t the only ones being bamboozled by a smooth sales pitch.  Kevin Trudeau went out on his own for his second infomercial after mega memory.  It’s a take-off of Larry King’s show called A Closer Look.  A closer look at Kevin’s own shady past is something he hides from his audience.  Back in 1990, he spends a month in jail for depositing $80,000 worthless checks.  In 1991, he’s sentenced to two years in prison for spending $120,000 on credit cards.

“Wait a minute! There are lots of crooks in this industry6”.  Insiders realize something needs to be done. They thought they could form their own trade organization without being government regulated. The Electronic Retailing Association, yes, E.R.A, was born.  They laid down a rule that only reputable companies could be members.  The move does add credibility to most producers of infomercials, but it doesn’t take a clairvoyant to foresee which companies will continue to take advantage of desperate people.

After serving two years in prison for fraud, Kevin Trudeau is out to reclaim his crown.  Prison hasn’t rehabilitated him.  By mid-decade, he’s using his talk-show format to pitch an easy-money pyramid scheme.  While Trudeau is back with his multi-million-dollar hustle, another disreputable infomercial scheme has never gone away.  The Psychic Friends Network continued to do big business by taking advantage of those desperate to believe.  Mark Edward, skeptic and Psychic Friends Network “psychic”: “The most lucrative hours (to call) were between 1 am and 6 am.  If I was at home and not really doing anything important, I’d go online and start taking calls. They thought I was in some ashram.  I was just doing whatever I needed to do around the house.  These people were lonely, needing someone to talk to”.  By the end of the month, they’d racked up thousands of dollars in telephone bills.

Years of deception caught up with Edwards in the form of built.  He became an alcoholic.  His drinking had become unmanageable.  He realized he needed to get out.  He does so in 1997, just as the 1-900 business model comes under scrutiny.  By the late ‘90’s, the defaults are piling up.  By 1998, The Psychic Friends Network gets disconnected, and the company declares bankruptcy.  Around the same time, Susan Powter chooses to leave fame and fortune.  Her discomfort for the infomercial industry had been festering for years.  By ’97, her fitness empire included 6 books, a tv series and a line of home videos.  She may be the face of a multi-million-dollar juggernaut, but the more Powter’s empire flourished, the more her partners wanted to squash the real Susan Powter.  In 1998, she walked away from it all.

Trudeau embraces what Powter rejects, By the late ‘90’s, his deceitful tactics are catching up with hum again.  In ’96, the SEC and Attorney’s General from 18 different states came after him for operating an illegal pyramid scheme.  Two years later, the government cracked down on him for misleading claims he’s making on his many infomercials.  In total, the FCC take issue with six different infomercials produced by Trudeau.  His talk show format is singled out as furthering the deception.  He’s forced to include disclaimers on future infomercials and label them as paid advertising.  For a supposed memory expert, Trudeau can’t seem to remember the rules.  He gets in trouble again and hangs up his infomercial hat.  But instead of quitting altogether, he shifts to writing a book.  Natural cures “they” don’t want you to know about finds an audience.  Self-published in 2004. The conspiracy-laden book sells over 50 million copies.  In the 2010’s, the federal government wasn’t through with Trudeau.  He was held in contempt for not paying a $37.6 million penalty.

Throughout the 2000’s, infomercials continue to fill late night tv hours, growing to $170 billion a year global industry.  Increased accountability brings a quicker end to fraudsters.  By mid-decade, mainstream reporters like Jake Tapper are hip to Kevin Trudeau.  Kevin published his third book in 2007 and the government pounces.  They said he misrepresented the contents of the book.  He’s fined $37.6 million and orders him to refund his customers.  In March 2014, a decade of legal evasion comes to a close and he receives 10 years in prison-his 4th sentence.  The man who gave Trudeau his first tv huckster gig, Kevin Harrington, translates his infomercial success into a role on Shark Tank.  These days, he mourns the loss of the industry he helped create.  “I was in the industry full-time until 2013.  That’s when I shifted gears because tv viewership went down”.  Copycat psychics are making a huge profit online -as of 2018, an estimated 95,000 psychic businesses are operating in the U.S, bringing in about $2 billion a year.  In 2022, Trudeau is released from prison(again) and heads back to court, claiming he doesn’t have money to pay outstanding fees.  Word is he’s back at it online, where tv bans don’t matter.  Sounds like an ugly business, doesn’t it? Feel free to take a shower to wash the nasty off.  

Check out my vlog this week at this link: https://youtu.be/Bqgbn1DRgJ8?si=lrbpKOr_rVOagGBs