HSN changes model, takes product placement money
Filed under: Kraft Foods
Home Shopping Network (HNSI) will no longer just make money selling clothing, kitchen appliances, and cosmetics. Soon it will also begin promoting products from companies like Kraft (KFT) on its programs. According to The Wall Street Journal, "Next month, the network says, it will air a three-minute segment in which an HSN chef will show how to create a recipe from Kraft's Food & Family magazine using Kraft products." A number of other companies are cutting similar deals with the network.
For HSN, it is a brilliant move. With its stock at a 52-week high of $15.06, it needs to show investors that it can go beyond its traditional retail roots. Its sales were down 8 percent in the June quarter to $640 million. Adjusted EBITDA increased 12 percent to $43.3 million because of better gross profit margins. However, net income may be a poor measurement of performance for the quarter because the firm had large one-time charges last year.
Product placement won't bother viewers but it may brighten the outlook for HSN investors.
Douglas A. McIntyre is an editor at 24/7 Wall St.



























Reader Comments (Page 1 of 6)
9-28-2009 @ 11:25AM
Jim in AR said...
HSN will be selling ads within their news about ads in which they try to sell you something? Are they competing with AOL?
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9-28-2009 @ 1:09PM
Sonja said...
I can't stand HSN and don't see where these additions are going to improve it. It's just plain dull to watch and the hosts are just not compelling as they sell the products. They just don't make a personal connection with the viewers/customers like the hosts on QVC. And, most of their merchandise is cheesy. QVC is much more classy, hosts are very friendly and bring their personal life into conversations on air, etc. I have tried watching HSN and just can't stand it - haven't ordered a thing from them, whereas I'm a very good customer of QVC..
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9-28-2009 @ 10:42PM
Carolyn said...
Agree. HSN just seems 'cheap'. I can't put my finger on it. QVC definitely has the quality edge.
10-01-2009 @ 10:51PM
Tom said...
Carolyn, I can help you put your fingure on it. Almost everything sold on HSN comes from China. Over the years I have purchased quite a lot but I have gotten tired of every package I receive having "Made In China" stamped on it.
I have noticed that when something isn't made in China the host or vendor always makes a point of emphasizing that. So now I assume something is made in China unless I hear specifically that it was made in America, or Indonesia, or Mexico, etc. And even though I hear about how improved products from China are I still find most items to be, or feel, or look cheap. Thus HSN's affordable pricing. I don't know if its the same with QVC or other shopping channels but I would venture to say it probably is. Thats where Walmart gets their "affordable" products.
One thing I must say about HSN. I have never had any problem returning anything. I buy a lot of things on line from a lot of vendors. To me HSN has by far the best customer service I have ever dealt with. Honestly, I have always been surprised at how easy and responsive they have been.
9-28-2009 @ 11:48PM
Tim said...
I agree about the HSN hosts...most seem so phony. They make everything seem like a "pain" doing something the old fashioned way - you need to buy whatever item they are selling. Plus they always act surprised at a demonstration they've seem hundreds of times before. There is a huge difference between salesmanship and over-acting.
To Hugh, the Tony Little "fan",...they may not be orthopedic shoes, but I have seen him hawking exercise sandels.
I'm not a huge shopping channel watcher, but sometimes they do show things that are unique
9-29-2009 @ 12:31AM
CCL said...
Sorry, I don't agree with you and feel just the opposite. I find QVC to be less compelling and buy from HSN all the time. There you go, different strokes...
9-29-2009 @ 7:13AM
marsha said...
I am a customer of qvc and hsn have been for years . I have found that hsn stands behind their products and makes returning products much easier . They also offer more easy pay options to their customers than QVC smart move has brought them more customers. I just wish they would get rid of Joy Mangano and her cheap chinese crap. Otherwise I have been very happy with Hsn.
9-29-2009 @ 7:57AM
Raiderfan said...
Some of the HSN hosts may be marginal, but Guy Yovan is great! He was off the show for a year or two, and then they asked him back.....he's genuine, fun to watch, and really witty. The best host out there. Can do a cooking show one segment, then jewelry, then NFL sportswear......very talented!
9-29-2009 @ 8:14AM
su said...
Have a horrible return policy not like QVC had a(4) quad set of phones returned... after quit working and I had to have manuf replace and they replaced w/ double (2) inexpensive set
9-29-2009 @ 11:30AM
Another Mother said...
Their items are garbage and never work. They sell trash. I am done with them.
9-29-2009 @ 1:17PM
rk said...
QVC hires actors, Hsn has the real deal. Qvc's customer service and sale people are soooo RUDE. I love HSN the sale department and cs are very sweet
9-28-2009 @ 5:25PM
Will in New York City said...
Last year I ordered an electronics item from HSN.
The merchandise was delivered in fine condition.
Actually it came to my home 2 days BEFORE it's
scheduled date of delivery, which was fine with me.
The merchandise I have seen presented on HSN
looks fine to me, just as comparable to the items
I have seen on QVC. I think the additions will improve
HSN. I would order merchandise from HSN in the future.
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9-28-2009 @ 8:46PM
sue said...
I did all my shopping this summer and fall on qvc and hsn. I also bought some things at j.c. penny.com. HSN stands behind their products and responds to requests the same day in most cases. QVC does not. I have never had any trouble returning items or getting refunds from HSN but I have to say that the mercandise sold on QVC is higher quality, especially when it comes to women's fashions. Over-all I like to shop online. Its super easy and very convenient. You can get all sizes which is great for plus size women like me.
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9-29-2009 @ 12:13AM
Faith said...
I had done shopping on HSN many years ago but not now. I do shop with QVC and they have a lot of designer clothing (including Marc Bouwer, Pamela Dennis, Dennis Basso .. these are high-end designers) and quality items including Wii's and name brand electronics. They DO stand by their products and their customer service is fantastic. I have returned a few items, one or 2 after the 30 days, and have had no problems. I think QVCs items, hosts and service are much better than HSN!
9-29-2009 @ 6:13AM
Susan said...
I totally agree with this write up. I used to buy from qvc all the time. Unfortunately I ended up returning much more than what I would keep. The products just seemed inferior. Also I do find that hsn stands by what they say. Return for any reason, no questions asked. I don't like pressure sales, and they don't do that all. qvc is always on you better hurry because we are running out or it is going to sell out right now. I also enjoy looking online at the products of hsn and not qvc, talk about boring.
9-28-2009 @ 9:03PM
Donovan said...
I've ordered a great deal of merchandise from HSN over the years. However, under no circumstances would I consider ordering, or have I ever ordered ANY FOOD items from an on line food supplier/or shop at home program. Sorry, I personally need to see the food, and read the label describing the food items contents etc. I don't care how yummy it may look on T.V. or in an ad.
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9-28-2009 @ 10:39PM
Karol said...
Then you will miss out on some great items. Tony Little had the Bison on HSN.. awesome food.. and it came packaged really great! I'd highly reccomend it! Love those hotdogs too !
I know for a fact that the foods fixed on HSN are of high quality as I got to know the chef's doing much of the work.
They came into the grocery to personally purchase the items needed to cook on the show fresh . My register would be closed off and I would ring it up and several people would bag it and help them out w/ it.
It was fun talking to them.. about the recipe's and cookware.
Educational..
But ................. Tony Little's Bison is really good !
........... Oh by the way.. Tony's married to one of HSN's X show hosts! Tony is a really really really nice guy too. He was kind to my son once.. and I will never forget it.. Thanks Tony!
9-28-2009 @ 10:45PM
Hugh said...
Tony Little is the biggest jackass that ever came down the pike. Anyone who would buy anything that he's pushing needs to have their head examined, pronto! First, it was his crappy exercise equipment. Now, he's pushing food? What's next, orthopedic shoes? It wouldn't surprise me. He's a loudmouthed piece of crap. Give me a break.
9-28-2009 @ 9:12PM
Nancy said...
The main reason I ever watch a home shopping channel is because I get so entirely sick of the number of commercials on regular channels. Home shopping IS a commercial. And now we're going to have commercials in our commercials? Sigh.............there is no escape!
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9-28-2009 @ 9:15PM
eve said...
I DONT LIKE HSN THEIR CUSTOMER SERVICE STINKS. I ORDERED A 14 KT GOLD GEMSTONE RING AND A DAY AFTER I GOT IT A STONE FELL AND THEY WOULD NOT REPLACE IT FOR ME., SO I ENDED UP WITH A MISSING STONE RING FOR $300.00. I AM A LOYAL CUSTOMER TO QVC & SHOPNBC. HSN IS VERY BORING AND THIER PRODUCTS LACK SHINE.
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