In my last entry I discussed distressed companies, which is a little depressing. It is easy to think that every company is feeling it to some degree or another. Last week, however, I visited a that is quite recession resistant.
My wife recently told me about a story she heard on NPR about infomercials, and how they are doing very well in the recession. So it was interesting when we got a call from someone in the infomercial business that was interested in selling their company. I visited them last week, and I had a good opportunity to talk about the industry and get an idea of how it operates. It seems that a number of factors have come together that has provided a boost to the industry.
First is that many products have retooled their advertising messages to talk about savings and value. For example, some household product’s TV ads have been reshot to show the product in a modest house with a focus on value and cost-savings, instead of a large house and the promise of luxury. However, infomercials have always promoted savings and value. Think about it – that is a central them to most of them I can remember.
The other factor is that ad time is cheap. In the past, infomercials were being squeezed into cheaper time slots, and now they often see the light of day. Finally, it turns out that TV stations participate (in a big way actually) in the revenue pulled in from infomercials. Since many TV stations are struggling with a drop in ad revenue, they are more than willing to get more infomercials running to fill those empty slots.
So the industry is humming, and in this particular business, they had infomercials running on many monitors throughout the building as they did their business. Barack Obama coin sets seems to be particularly popular right now, although I guess that doesn’t save anyone any money. There was also some kind of small device you use on your face, but the sound wasn’t on so I still don’t know what that actually was.
The reason the business owner would like to sell is retirement, pure and simple. His timing is good too. His business was doing well, now it is doing even better and there isn’t a better time than that. Indeed, I know a few business owners that wanted to wait a few more years and now have nothing to show for their hard work.