HIGH-END HOME SHOPPING SHIFTS FOCUS TO INTERACTIVE

Byline: Sharon Edelson

NEW YORK--Upscale home shopping, which seemed to have such a bright future a year ago, is looking a lot less viable today.
The latest in a series of setbacks concerns Catalog 1, the joint home-shopping venture between Time Warner and Spiegel, which has decided to drastically scale back its 24-hour network.
Catalog 1 was launched in March with programming from Spiegel, Neiman Marcus, Crate & Barrel, Wiliams Sonoma, Eddie Bauer, The Shaper Image, The Nature Co., The Bombay Co. and Viewer's Edge.
"In the first half of the year it looked like a major race was on. There were five contenders. Now there's really only one that's pushing ahead," said Rod Parker, general manager of Catalog 1, referring to Q2. "We're repositioning as well."
Q2, QVC's lifestyle network, was restructured in November, when it was merged with On-Q, another QVC service. TV Macy's, the 24-hour TV shopping network from R.H. Macy & Co., was derailed by the Federated/Macy's merger; Television Shopping Mall, a network conceived by Home Shopping Network, never got off the ground, and Fingerhut's S: The Shopping Channel was scrapped several weeks ago.
"This was a year of reckoning with the fact that cable distribution is simply not available, so you couldn't roll out even if you wanted to, and the price of rolling out was jacked-up based purely on supply and demand," Parker said. "We will scale down the distribution of Catalog 1. We won't be fixated on a 24-hour service. We're not going dark, per se--we're really reconfiguring."
Parker said Catalog 1 will explore the Internet and other options.
While Catalog 1 is seen in only about 400,000 full-time cable homes, distribution has been just part of the problem. Executives conceded that the network's time-impoverished, upscale audience was unwilling to wait hours for a desired item to appear on TV.
For that reason, Catalog 1 is focusing its attention on Time Warner's Interactive Full Service Network, which is being unveiled in Orlando today. The Full Service Network will offer interactive shopping, movies-on-demand and financial services, among other options.
"We're an important part of the Full Service Network," Parker said.
The interactive nature of the service will allow viewers to browse through a full-motion video catalog, see a product demonstration, get more information about an item, or place an order instantly.
By focusing on the Full Service Network, Catalog 1 will have to wait longer to achieve its goal of reaching a large audience. The Full Service Network is being tested in only 4,000 homes for an undetermined period of time.
Parker said he thinks the participating catalogers will be willing to wait.
"This is a pioneering group," he said. "They want to be on the ground floor of electronic retailing. One has to look at the hurdles and just keep going."

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