Home Shopping Network

As television expanded into specialized cable networks during the late 1970’s media boom, the Home Shopping Network pioneered the concept of electronic commerce by offering viewers the opportunity to call in live and purchase a wide variety of quality items–predominantly fashion, beauty care accessories, jewelry, electronics, and domestic wares.

In 1977, Lowell W. Paxson, Lowell W.Paxson, owner of a Clearwater, Florida, easy-listening AM radio station, converted the station’s programming to a call-in shopping format to boost sagging audience numbers. He got the idea after a cash-poor advertiser had paid him with 112 can openers, and his on-air personality, in a long-shot attempt to recoup the money, sold them out in two hours. The call-in shopping format was immediately successful, and Paxson envisioned moving to television. He named the program the Home Shopping Club and marketed it to Tampa cable with the financial backing of Roy M. Speer, Roy M.Speer, a lawyer and real estate developer. Again the results were encouraging, and in 1982 the Home Shopping Club was a permanent channel in Tampa, quickly expanding to Ft. Lauderdale and Miami.Home Shopping Network

In June, 2002, twenty-five years after the Home Shopping Network got its start, telephone operators take orders in Clearwater, Florida.

(AP/Wide World Photos)

In 1985, Paxson and Speer launched the format nationwide. Now called the Retail trade;television shopping networksHome Shopping Network (HSN), it used a sophisticated computer system to handle the volume of call-in orders, as Paxson and Speer recognized that the purchasing process must work smoothly to guarantee return business. Their strategy paid off. The network featured quality items as well as closeouts and overstocks, and it introduced new products. Given its national reach, its impact on sales was unprecedented. The network’s policy of guaranteed returns encouraged leery home shoppers. The products were sold live, and because the network did not preview its lineup, audiences watched for extended periods of time, thus creating not merely shoppers but viewers. When the company stock went public in 1986, it was the year’s fastest new rising stock. Indeed, the success of HSN encouraged more than a dozen rival shopping networks to debut during the late 1980’s. In the face of competition, HSN maintained its edge. Its on-air personalities developed followings, and the channel featured a variety of celebrities debuting product lines. The network broadcasted year-round, around the clock–except Christmas, when holiday greetings were programmed.

In 1995, HSN was purchased by media mogul Barry Diller, BarryDiller, who directed a massive overhaul in network operations and joined it to his vast communications conglomerate IAC/Interactive. In 1999, HSN, recognizing the enormous impact of Internet sales, introduced its own companion Web site. However, HSN remains a vital and robust force in electronic retail. The fourth largest cable television network, it is estimated to reach 70 million households. Its sales have been in excess of $2.5 billion, and it has moved more than 53 million packages. Critical to its success has always been its willingness to engage new technologies: In late 2006, for example, the network introduced a cutting-edge interactive format in which viewers can use their remote control to order products, thus eliminating phoning entirely.

Home Shopping Network Summary