QVC Plus, the home-shopping TV service’s streaming brand, on Friday is launching Outdoor Escape, a new around-the-clock streaming channel dedicated to gardening and outdoor living.

The seasonal channel will be hosted by popular QVC personality and gardening expert Sandra Bennett, Soumya Sriraman, who joined Qurate Retail Group last year as president of streaming, told Broadcasting+Cable.

Outdoor Escape will feature lifestyle shows from QVC and HSN and give viewers easy access to purchasing products.

Qurate‘s QVC and HSN, the oldest names in shoppable TV, are evolving their approach as streaming creates new ways for viewers to buy what they see on the screen.

While more traditional programmers are embracing shoppable TV technology to create incremental revenue streams, one of Sriraman’s priorities is making programming more human. 

"This is a company that has taken to heart storytelling and bringing emotion into commerce is at the core of what it does every single day,” said Sriraman, who was with Britbox and Amazon before joining Qurate.

At the same time, adding distribution via streaming gives QVC more opportunities to reach viewers and viewers more ways to consume programming, interact and make transactions.

The company's  QVC and HSN linear channels are available as free ad-supported streaming TV channels (FAST). s QVC Plus and HSN Plus stream on platforms including  Roku, Amazon Fire, LG, Xfinity Flx and Samsung Smart TV. It is also looking to create new free ad-supported streaming TV (FAST) channels at a time when consumers are cutting the cord with traditional cable.

Last year, it created a seasonal Christmas in July channel.

“We found that to be hugely successful with our audience,” Sriraman said. “Audiences are responding to this idea of giving them channels they can watch and discover new products and new content as they sit back and watch.”

Gardening has been a mainstay on QVC’s main channel, making the category ripe for a streaming channel. For now, Outdoor Escape is available only on QVC’s app, but another channel, The Big Dish, is in the process of being distributed on more FAST platforms.

The company will see how Outdoor Escape performs. There’s a chance it will keep running past the summer. And the company has more seasonal channels in the pipeline. Some may be based on lifestyle categories, others may be built around the network’s personalities.

More Ways for Viewers to Buy

With streaming, viewers will have more ways to buy, including interacting with QR codes. Some viewers still like to call the channel to make purchases, though, Sriraman said. “We’re not limiting the ways people want to buy.”

On traditional TV, QVC pioneered shop-by-remote technology that the company will be rolling out on its streaming channel.

“The audience’s ability to transact and watch seamlessly is important, so the more opportunity someone has to get access to your channel, the more likely they are to deeper with you,” she said.

Streaming means “we now are not tethered to someone’s cable box,“ Sriraman said. ”You can take us with you wherever you go and you can watch our hosts that we know our audiences love, and you can discover things without having to be live.”

Sriraman is aware that traditional TV is looking for ways to build its commerce business. “It feels like everyone thinking about it as interactive ads,“ she said. ”We’ve always talked about it as interactive programming.”

It would appear likely that given the improvements in connectivity and technology, streaming viewers buy more stuff than TV viewers, but Sriraman said the company was not sharing that data. “We can say we’re super-excited about what we’ve seen since last year, and really excited about how the expansion of distribution on FAST is additive,” she said.

Sriraman is also looking forward to the launch of a new show, Design School with Ballard Designs, which will launch on QVC Plus March 24.

In each 30-minute episode, Ballard Design’s Caroline McDonald will guide viewers through the design process while tackling a challenge sent in by QVC viewers.

Design School will include shoppable entertainment features.

The show is designed to bring Ballard Design, traditionally a catalog brand, to life, Sriraman said.

“We all know that there are many things that are better told with video than in print or just static digital,” she said. "We’re very excited about the show.” ■

When Roku Channel launched its live-TV programming guide two years ago, it seemed pretty transparent that the intention was to mimic and replace the grid-like channel-surfing bliss of pay TV. 

Now the experience is complete. 

Qurate Retail has announced that its venerable TV shopping channels, QVC and HSN, will operate the first live-streamed "experiences" on Roku Channel. 

The channels will add 40 hours of live-streamed virtual commerce (vCommerce) programming to Roku Channel each week, including QVC's In the Kitchen with David, and HSN's Gotta See G by Giuliana Rancic. (Pre-recorded content will fill out the rest of the week.)

Update: Due to Roku's bizarro media strategy of having its individual partners leak channel announcements, a flurry of Roku Channel additions were actually announced Tuesday, including an expansion of NBCU and Telemundo news content, as well as the addition of FITE TV.  

Qurate Retail just reported a $2.74 billion third quarter loss, which company executives attributed to weakened consumer sentiment. 

Roku Channel, however, offers an opportunity for the venerable TV marketing company to reinvigorate its market on a top-five FAST reaching 80 million streaming households. 

It's an, er, exciting opportunity. 

"We are excited to bring QVC and HSN's entertaining and engaging livestream shopping experiences to the millions of viewers found on The Roku Channel, one of the industry's leading FAST channel services," said David Apostolico, senior VP of platform strategy, development and distribution and vCommerce aentures at Qurate Retail GroupSM. "We're excited to welcome new and existing customers to QVC and HSN via The Roku Channel, while providing yet another convenient way for our fans to access our uniquely engaging vCommerce content."

Qurate Retail Group, parent of TV shopping channels QVC and HSN, said it hired Soumya Sriraman as president of streaming as the company looks to build its streaming commerce business. 

Sriraman, previously head of Prime Video Channels at Amazon, joins Qurate Retail as it executes Project Athens, a three-year turnaround plan designed to stabilize its core businesses and expand the $8.3 billion in video-commerce revenue generated by its streaming operations.

The company also named Stacy Bowe chief merchandising officer, QVC U.S. Bowe held senior merchandising positions at G-III Apparel Group and Macy’s.

“These appointments reflect Qurate Retail Group’s ability to attract the most accomplished and ambitious executive talent in retail,” said Qurate Retail CEO David Rawlinson. “Our vCommerce teams — QVC, HSN and vCommerce Ventures — are disrupting video shopping and we believe we have a right to win in this growing industry. In addition, we are accelerating the pace of change within Qurate Retail Group through Project Athens, our turnaround plan, which touches nearly every facet of our business. We’re pleased to welcome Soumya and Stacy to our team.”

In her newly created post, Sriraman will head Qurate Retail's streaming commerce businesses including QVC Plus and HSN Plus, as well as the networks' presence on digital livestreaming TV.

Reporting to Mary Campbell, president of vCommerce Ventures at Qurate effective Wednesday, she is expected to expand the staff of the company's streaming unit, the company said.

Before Amazon, she was founding CEO of the BritBox SVOD service. Previously she held positions with BBC Studios, Tartan, Vivendi Universal, Warner Bros. and Universal Studios.

Bowe will oversee QVC's Buying, Planning & Programming organization and will lead QVC's Design Development & Global Sourcing unit, an in-house agency that brings new brands, products and concepts to life in apparel, accessories, outerwear and home décor

Effective Tuesday, Bowe reports to Mike Fitzharris, president of QVC U.S. ■

Showtime is working with QVC to boost interest in the new comedy I Love That For You.

Saturday Night Live alum Vanessa Bayer, who created and stars in I Love That For You, will co-host a home shopping show Thursday on QVC with QVC host Jane Treacy called Vanessa Bayer and Jane Treacy’s Must Haves. The show will appear live on cable and will be available on demand on QVC’s streaming service.

“We are thrilled to have Vanessa Bayer take on the role of a real live video shopping host with QVC and Jane Treacy,” said Michael Engleman, CMO, Showtime Networks Inc. “This Showtime and QVC collaboration is an incredible opportunity to spotlight I Love That For You and open up our audience to QVC’s loyal customers.”

Additional content was created when Bayer--whose character dreams of becoming a home-shopping host---was taught how to sell stuff on QVC. Her session of Host School with Jane Treacy will be available on QVC’s streaming service in June. 

Bayer and her co-stars did research at QVC in preparing for the roles on the show.

“We are excited to help make Vanessa’s dream a reality and give her an authentic experience as a QVC program host,” said, Mary Campbell, president, vCommerce Ventures. “We’ll be bringing Vanessa behind the scenes and onset live to see firsthand the personal connection our hosts share with our customers, which makes QVC a differentiated, social and engaging shopping experience. We can’t wait to share this original content exclusively with our customers across our vCommerce platforms.”

QVC customers are being offered 50% off an annual Showtime streaming subscription, $49.00 with code QVC for a limited time.

QVC’s streaming services is available on Roku, Comcast X1 and Xfinity Flex, Amazon Fire TV. LG, Apple TV, Android TV, Google Play Store and Google TV.

I Love That For You is co-created and executive produced by Bayer and Emmy nominee and two-time Peabody winner Jeremy Beiler. Emmy and Peabody winner Jessi Klein serves as showrunner and executive producer along with Michael Showalter. Megan Ellison and Sue Naegle of Annapurna, Jordana Mollick of Semi-Formal and Allyce Ozarski also serve as executive producers. ■

Cable legend John Malone, just days after converting his super-voting shares in Discovery Inc. to common stock for no premium to help facilitate its merger with WarnerMedia, has agreed to sell his Class B shares on TV and online retailer Qurate Retail Group to long-time lieutenant Greg Maffei, for about $400 million in cash or stock.

News of the filing first appeared in The Information. 

Qurate includes the two largest home shopping channels -- QVC and HSN -- as well as online retailer Zulily, Cornerstone Brands and green energy and other investments. .  

Malone, 80, helped found the modern cable business as chairman of Tele-Communications Inc., and has left his mark on practically every major cable deal in the past 20 years. He agreed on May 18 to sell his Qurate super-voting shares, which give him 41% voting rights in the company, to Maffei for $14 per share, according to Securities and Exchange Commission documents. Qurate stock currently trades around $13 per share. According to the filing, Malone would get paid in either cash, stock “or such other form of consideration as to which Mr. Maffei and Mr. Malone may mutually agree.”  

Maffei, who is CEO of Liberty Media and chairman of Qurate and several other Liberty holdings, joined Malone in 2005 after stints at Microsoft,  360Networks and Oracle. The two have been partners on several big deals, including the 2013 purchase of a 27% interest in Charter Communications. 

According to the SEC document, Malone agreed to the sale on May 18, pending board approvals. The document added that while he supports Qurate’s long-term strategy, he wanted to accept Maffei's offer “because it would provide flexibility for certain long-term estate and tax planning goals in light of potential changes in federal tax laws.”

The document continued that the sale is contingent on the approval of Qurate’s board of directors. Qurate also has call rights to Malone’s Class B shares, and if the company exercises that right, Malone said he would prefer to receive payment in the form of Qurate common stock, “such that he would continue to hold a substantial investment in Qurate Retail.”

Malone earlier agreed to convert his Class B super-voting shares in Discovery, which usually carry 10 votes each, on a 1:1 basis into common shares for no premium, a move that helped Discovery move forward with its planned merger with WarnerMedia. In a statement after that deal was announced, Malone said that he neither asked for nor received a premium for converting his Discovery stake. 

“I believe we are creating real value for shareholders and a legacy investment for my grandkids,” Malone said in the statement. 

Discovery’s super voting shares usually trade at around the same price of its common stock, but in the past several months, because of a sell-off by hedge fund Archegos Capital (which also shorted ViacomCBS stock), their value has soared. Bloomberg estimated that Discovery’s Class B shares have traded as high as $128 each at one point -- more than four times the Class A share price of around $32 per share. By converting his Class B shares on a one-for-one basis, Bloomberg estimated that Malone could lose about $280 million on the deal. 

That is in contrast to Discovery’s other major holder of super-voting shares -- Advance Publications, controlled by publishing giants the Newhouse family -- which according to Bloomberg will receive 13.1 shares of the new entity for every Class B share they own. Advance also will receive  the right to nominate two board members to the new entity.

Some analysts saw Malone’s Discovery deal as his way of helping to push the transaction forward. And he still will be a large shareholder after the deal closes, meaning he will participate in any upside in the stock price in the new entity. Some have predicted that the new Discovery-WarnerMedia could be valued at as much as $46 per share, well above the current $32 price of the stock on Thursday. 

In the race to pick the pandemic’s winners and losers, some executives argue that the deadly crisis could make home shopping and e-commerce a more important part of the TV industry.

In sharp contrast to the difficulties faced by traditional media businesses, which have been roiled by slumping ad revenue, layoffs and production shutdowns, government-mandated stay-at-home orders have boosted TV viewing, producing a marked rise in home shopping for products that consumers normally buy in shuttered brick-and-mortar retail outlets.

RELATED: Pandemic Changes the Home Shopping Mix

“The stay-at-home orders are producing a seismic shift in the way consumers shop,” said Brian Meehan, co-founder and chief operating officer of Knocking, a content creation and commerce company that works with media partners like Univision Communications, Cox Media Group and Sinclair Broadcast Group on their e-commerce efforts. “Every day is now Cyber Monday, and every day is bigger than the last.”

Meehan and others contend the crisis could prompt a wider shift towards e-commerce in the media sector. Knocking founder and CEO Markus Reinmund said a long-term decline in traditional linear TV advertising, accelerated by the pandemic, will push media companies to find better ways to monetize their content.

“In a short, two-month time frame, stay-at-home orders have really accelerated the long-term trend in consumer markets towards home shopping,” Reinmund said. “Consumers have more time to engage with media and TV viewing is up. But media companies are not profiting from this because they are seeing a dramatic decline in ad revenue. So, finding ways to be less dependent on ads and actually earn a share of the consumer spending is becoming a very attractive idea.”

Interest in that idea can be seen in efforts by Qurate Retail, NBCUniversal, Univision, ABC, Amazon Studios and Discovery, as well as major TV-station groups like Sinclair and Cox Media.

“The overall market for home shopping and selling direct to consumers is obviously something that will only continue to grow,” NBCUniversal executive VP, head of marketing and advertising creative Josh Feldman said.

Last year, Comcast-owned NBCU launched ShoppableTV, which encouraged consumers to use their smartphones to buy products while watching such programming as French Open tennis, the Tour de France cycling race, Songland and Very Cavallari simply by taking a photo of a code on the screen.

This June, NBCU will dive even deeper into e-commerce with the launch of the NBCUniversal Checkout commerce system, which will simplify the process of buying goods via ShoppableTV content and branded videos and web articles.

Clicking with Commerce

In the pandemic’s early days, though, much of the e-commerce growth has been gobbled up by the already dominant giant online retailers. Amazon, for example, reported $75.5 billion in net sales of goods and services in the first quarter of 2020, up 26% from a year earlier, with net sales from its online stores hitting $36.7 billion in Q1, up 24% from Q1 2019. The tech giant has forecasted an 18% to 28% jump in total net sales for Q2 of 2020.

How much of this growing market can be captured by TV companies is open to question, given that most of the industry has little experience with retail. It’s also unclear if the growth in e-commerce makes up for lost ad revenue from brick-and-mortar retailers that are in increasingly precarious financial straits. Retailers accounted for 14.5% of the TV ad spend in 2019, MediaRadar estimated.

A recent survey by Elevate at the media research and consulting firm SmithGeiger found 46% of Americans were spending more time shopping online. Half of the people sampled also said they spent more time watching TV for entertainment, and 41% noted that they were watching more local news.

“The shift in shopping patterns is here to stay,” noted Andrew Finlayson, executive VP of digital strategies at SmithGeiger, which does work for Knocking. That, in his view, opens up e-commerce opportunities for TV companies. “Consumers that were resistant and not shopping at home now have the full experience of doing it and in many cases might be continuing this behavior in the future.”

Another trend driving increased interest is the growing use of streaming platforms. In the first quarter, Roku had 39.8 million active accounts and time spent streaming as up 49% year over year, VP of content distribution Tedd Cittadine said.

“This is having a positive impact lifting the viewership for many of our channel partners, including the home-shopping channels that have seen, on average, double-digit increases in viewership time during the first three months of 2020,” he said.

Viewership gains are welcome news for traditional home-shopping channels, which have struggled in recent years because of larger industry-wide declines in pay TV subscriptions and linear TV viewing.

In 2019, Qurate Retail, which owns QVC and HSN, reported a 4% drop in sales to $13.46 billion.

iMediaBrands, the owner of ShopHQ and the Bulldog Shopping Network, saw even bigger declines, with net sales of $501.8 million for the fiscal year ending Feb. 1, 2020, down from $596.6 million in fiscal 2018.

Qurate Retail responded to the decline with a major expansion in digital operations. In August 2019, it launched a live streaming app with on-demand video and six channels on Roku and Amazon’s Fire TV. The Roku app now has more than 3 million installs, making it one of the platform’s top 25 free apps, said Todd Sprinkle, QVC’s senior VP of brand creative and production.

Qurate brands also have bolstered their presence on social-media platforms such as Facebook, Instagram and YouTube, with over 350 hours of content each week on Facebook Live; added linear streams on smart TV platforms like Samsung TV Plus and LG Channel Plus; and an expanded presence on local broadcast stations.

“Over the years, the model has evolved from linear TV into a multiplatform shopping experience that spans web, broadcast, mobile and social platforms,” QVC’s Sprinkle said. “We can reach a greater proportion of households today than we could 10 years ago,” even with multichannel cord-cutting.

Since the start of the pandemic, Sprinkle said, “we are seeing increased interest online in items that are helpful in the home,” with page views for a number of items increasing in March. Categories upwardly affected include food (up 66% from a year earlier on QVC and 48% on HSN.com), home-office gear (77% on QVC.com and 234% on HSN.com), wellness (up 143% on HSN.com) and health and fitness (up 126% on HSN.com).

Check It Out

These trends are occurring as a number of major programmers are rethinking their business models with new ad products and e-commerce applications.

Early efforts in that direction seem promising, with companies like Knocking, Univision and NBCU reporting successful e-commerce efforts.

“We’ve had an incredible response with the conversion rate of ShoppableTV being around 30% higher than the average e-commerce conversion rate,” NBCUniversal’s Feldman said.

Next month’s launch of NBCUniversal Checkout will further strengthen those efforts] by simplifying the creation of e-commerce offers and streamlining the consumer experience, Feldman said.

RELATED: Working for Pandemic Relief

Checkout is part of NBCU’s On Platform ad offering and its larger push into advanced advertising systems.

“Checkout can turn any branded video or web article into a native shoppable experience,” he said. “You can go to a video of a holiday gift buying guide and buy multiple brands in one checkout in the most frictionless way without the viewer ever leaving the environment they came for.”

A shift in viewing and consumer focus towards digital media and streaming should make such efforts even easier.

Univision, for example, currently has e-commerce offerings for national linear TV, local TV stations, online, social media and radio. “Being on multiple platforms was a key part of our strategy from the start,” Univision Local Media senior VP of growth initiatives John Buergler told Multichannel News.

In June of 2019, Univision partnered with Knocking to launch Gangas & Deals, a digital shopping market for Hispanics, with six- to eight-minute segments featuring upcoming brands on the morning show Despierta America. As part of the multiplatform efforts, Univision posts clickable materials on Instagram, where consumers can easily buy products.

Adding e-commerce options to the video on streaming platforms would be a logical next step that would greatly simplify the purchasing process, though Univision and most other media companies have not yet made that move.

Discovery’s Food Network Kitchen subscription video-on-demand service launched last October on Amazon’s Alexa, Fire TV and other platforms with features that would allow users in select markets to buy ingredients for some of its cooking show lessons.

And Amazon Prime Video’s original series Making the Cut with Heidi Klum and Tim Gunn, which premiered in March, allows viewers to purchase fashions featured in the competition show.

Data-Driven Dollars

Cittadine said Roku’s connected-TV platform already has a number of attractive features for e-commerce. The Roku Pay setup, used to buy app subscriptions on the platform, can streamline the checkout process, and Roku’s extensive data collection and analytics efforts could help companies promote their products, create targeted ads and develop more compelling e-commerce strategies.

“We’re still in the early days of shopping on streaming services,” Cittadine said. “But you can imagine the opportunities this creates when you can target the right consumer who is looking for a product with embedded purchasing power and interactivity.”

That makes improved data and measurement of audience engagement one of the key opportunities surrounding e-commerce efforts.

Last fall, Knocking began testing short, one-to-three-minute “Local Steals & Deals” segments that could be placed in local newscasts. In March, it fully launched the product, which now airs on stations owned by TV groups including Cox Media and Sinclair.

The exact format is up to the stations. Typically, a local anchor or personality will introduce the segment, which is produced by Knocking and hosted by former QVC personality Lisa Robertson. Local Steals & Deals features upcoming brands selected by Knocking and is typically part of the newscast or show, rather than an ad.

The segments are crafted as editorial content, with brands that have compelling stories about the entrepreneur behind the companies or the causes they support, rather than straight product pitches, Knocking executives said. As editorial content, they also don’t have to take away from ad time and have the long-term benefit of providing valuable data about the consumers.

“It is a fundamental shift in the business model for media,” Knocking’s Reinmund said. “Instead of just exposing them to an ad, I can go way beyond that. I’ll have actionable deep-engagement data and I can build a relationship with a consumer that will be much deeper and more valuable.”  

The pandemic has prompted a rise in the number of people buying products from home, but for top shopping channels like QVC and HSN, the increase in interest was a mixed blessing as customers shifted from buying high-margin offerings like fashion and jewelry to less-profitable home categories.

QVC and HSN parent Qurate Retail Group, which also includes online retailer Zulily, saw revenue in the first quarter dip about 5%, to $2.9 billion. Operating income fell 20% as the shift to low-margin offerings and an increase in costs associated with its fulfillment centers and employees during the pandemic ate into profits.

About 10,000 Qurate employees are now working from home and the company has spent about $19 million in emergency pay and benefits for its workers. Qurate has committed about $10 million to support urgent needs in its communities, including donating airtime for public-service announcements, participating in the Small Business Spotlight initiative with the National Retail Federation; a global PPE-creation project funding artisans globally with female-founded nonprofit group Nest; and relief programs like Meals on Wheels and No Kid Hungry.

Qurate president and CEO Mike George said sales began to rebound late in March and have continued into April. Qurate’s online businesses had strong showings in the quarter, with traffic on the QVC website up about 30% compared to the prior year and live streaming over social media rising 100%. Home viewership at the QVC and HSN channels was up 10% in the period.

On a conference call with analysts, George said though it is still early in the second quarter, the April growth is consistent and evident across several product segments.

“We’ve seen it across new customers, reactivated customers, occasional customers and core customers,” George said. “We’ve seen it across a range of home categories, electronic categories, beauty categories. The only place we’re not seeing it is in apparel, accessories and jewelry. So I’d characterize it as consistent, broad-based sales growth.”

The shift wasn’t exactly an accident, George added. Qurate foresaw the changes in buying habits associated with the pandemic, and tailored its message and offerings to meet them.

Tailored to the Times

Qurate blew up most of its on-air
programming calendar, inventing new programs that would address the moment, like Love Your Home, a home-products show that replaced Beauty iQ, and airing afternoon miniseries to take advantage of an increase in viewership during that time slot.

QVC, HSN and Zulily also beefed up their home-products inventories to focus on new trending categories like home, sanitation, food and storage, business tools, tech resources for distance learning and
beautification. The company also leaned
into its social media platform, including the #PostAtHome campaign on QVC, which featured hosts live streaming from their homes, and Cornerstone Brands’ Grandin Roads #MakeYourDoorHappy, encouraging viewers to share their front door decorations on social media.

QVC and HSN saw increases in home-fitness products — sales of bikes, treadmills and ellipticals were all up — as well as vitamin supplements and home-office products like laptops, tablets, printers and monitors. Viewers also were interested in boosting connectivity with family and friends as shelter-in-place orders continued, leading to increased sales of video-calling devices like Amazon’s Echo Show and Facebook Portal.

Qurate said about two-thirds of
new customers in the quarter came in organically, reflecting the power of its brands. Now, George said, Qurate will step up marketing spending to attract and retain new customers.

“We’ve seen improved efficiency across all marketing channels, including paid social, which gives us a powerful platform to highlight our unique shopping experience and are moving quickly to convert new customers into lifetime customers with campaigns that build relationships by focusing on what makes us unique and targeted emails, digital nurturing through retargeting and the piloting of additional social channels and ad formats,” George said on the call.

Lower Margins, Higher Costs

Evercore ISI analyst Oliver Wintermantel wrote in a research note that while the April sales growth is encouraging — he revised his Q2 revenue estimates upward to a 1% decline — the mix in products to some lower-profit merchandise comes at a time of additional operating costs related to the pandemic. Wintermantel expects EBITDA margins to fall another 100 to 150 basis points in Q2.

“Consumers adapted to the new stay-at-home mandates and the company adjusted its merchandising, programming and marketing to better meet the needs of its customers,” Wintermantel wrote. “That said, the product margin pressure due to category mix shifts continued and [Qurate] is incurring further COVID-related costs — including additional pay, reduced productivity in its fulfillment centers, which is leading to increased fulfillment times and additional bad debt reserves (in anticipation of the deteriorating economic situation).” 

QVC and HSN announced their plan to showcase more than 70 entrepreneurial brands on their platform by the end of 2020.

“The Big Find” is a nationwide search for up and coming brands in beauty, accessories and fashion. More than 38 have already been seen on HSN and QVC such as Act and Acre, Valencia Key Jewelry and Have Some Fun Today.

QVC and HSN have launched some of the most successful entrepreneurial brands such as IT Cosmetics, TATCHA, Junior's Cheesecakes and more, said Mary Campbell, chief merchandising officer, Qurate Retail Group, and chief commerce officer, QVC US.

The search for entrepreneurial brands attracted 650 entries around the world when it launched in June 2019. In August, 270 semi-finalists met at day long pitching sessions in Florida, Pennsylvania, New York and Seattle. 

HSN Inc. shareholders will gather Dec. 29 at the home shopping giant’s St. Petersburg, Fla., headquarters for a special meeting to approve its $2.6 billion merger with QVC Inc. parent Liberty Interactive, the company said in a filing with the Securities and Exchange Commission Monday.

Liberty first announced the all-stock deal in July, where Liberty Interactive would acquire the 62% of HSN it doesn’t already own. The company plans to keep its HSN and QVC brands separate.

The deal is still subject to federal regulatory approvals. Liberty has said it expects the transaction to be completed by the end of the year.

According to the deal each HSN stockholder will receive 1.65 shares of Liberty Interactive's Series A QVC Group common stock for each share of HSN common stock they own.

According to the prospectus, Liberty Interactive will issue about 53.5 million shares of Liberty QVCA common stock to HSN shareholders, who would own about 11.1% of the equity and 7.2% of the voting power of Liberty Interactive's QVC Group tracking stock. Additionally, HSN shareholders would own about 6.2% of the Liberty Interactive voting power as a whole.

Long before Amazon and Alibaba, there were home shopping channels on television.

Today, in the modern age of digital commerce, those “home shopping” channels are hoping that a steady video stream of celebrity endorsers and effervescent hosts will save — and even grow — their niche in retail TV and online retailing.

While Amazon gobbles market share from online and big-box retailers of every shape and size, TV home-shopping channels have managed to maintain their hold on a multibillion-dollar share of the business, in part with new technology and digital strategies.

Related: Next-Generation TV Expected To Usher in New Era of T-Commerce

Last month, the industry got a bit of a boost with the pending merger of its two largest companies, QVC and HSN. That deal, expected to close in the fourth quarter, is either a testament to the power of TV home shopping or an attempt to buy a little more time for a struggling sector.

On the surface, the QVC and HSN deal, valued at about $2.6 billion, does a little of both. The combination would create a potential powerhouse with $14 billion in annual sales and annual cost savings of $75 million to $110 million per year. It will also pair the two giants in the space, with diverse product lines: QVC has focused on home and accessories products, while HSN has concentrated on young women’s fashions.

QVC is in more TV homes — 104 million versus HSN’s 84 million — but HSN has a stronger online and mobile presence. Forty-three percent of HSN’s $2 billion in online sales are mobile.

Bulking Up Against Amazon
The added heft could help insulate the companies from the looming threat of online retail behemoth Amazon, which is expected to report online retail sales of more than $107 billion this year.

“Everybody’s always worried about Amazon, just because of how big it’s gotten and generational shifts,” FBN Securities managing director, cable media and entertainment equity research Robert Routh said in an interview. “People in my generation may or may not have wives or girlfriends that watch QVC, while millennials, they don’t even watch television.”

The biggest question is whether companies still involved in the sector have enough exclusive products, personalities and other assets that will overshadow any losses on the TV side, Routh added. “At some point it could face material issues to its core viewership unless it can find a way to adapt,” he said. “But so far it has.”

While TV shopping may have passed its heyday — sales for both QVC and HSN have dipped over the past year — companies in the sector see video as one of the differentiating factors that won’t just keep TV shopping alive, but help it thrive.

“If anyone says they’re not concerned about Amazon, then they don’t have their eyes wide open,” Jewelry TV chief strategy officer Tim Engle said in an interview.

Engle said while the deal could affect other retailers that offer similar products, Jewelry TV made the decision in the early 2000s to focus exclusively on one product — jewelry.

“We feel like that niche and that focus really positions us well and defines who we are,” Engle said. “I’m not like the No. 3 person trying to compete with these two mega-giants. I’m the No. 1 person in my space.”

QVC and HSN have also made changes over the years, switching their product focus from electronics and watches several years ago to a concentration on home products for QVC and women’s fashions for HSN.

Both channels have a steady stream of celebrity endorsed offerings, from Lisa Rinna and Isaac Mizrahi fashions at QVC to Diane Gilman jeans and Keith Urban guitars at HSN.

And both have plunged headfirst into the information age with mobile and e-commerce capabilities. At QVC, e-commerce accounted for $4 billion of global revenue in 2016 and represented 9% of consolidated global revenues and 55% of U.S. revenues in the second quarter, with mobile making up 63% of global e-commerce orders and 62% of U.S. e-commerce orders.

According to HSN, about 43% of its $2 billion in annual digital sales are from mobile.

Both QVC and HSN have a strong presence on TV. QVC’s three pay TV channels are in 104 million homes and HSN’s two channels are in 91 million households. Both brands have a strong relationship with major cable operators such as Comcast, Charter Communications and Cox Communications, as well as with smaller systems throughout the country.

Both channels also have been active adopters of new technologies. HSN is available on Roku, Apple TV, Android TV, You Tube, Smart TVs and Amazon Fire TV, while QVC is on Facebook Live, Apple TV, YouTube and Roku.

While QVC and HSN grab most of the TV home-shopping headlines, smaller outlets such as Evine Live (formerly ShopHQ), Jewelry TV, Shop LC, America’s Auction Network, Gem Shopping Network and others have managed to weather the changes as the business has evolved.

Rolling With the Changes
Some have managed the changes better than others.

Privately held Jewelry TV has had double-digit sales growth in the past two years; it grew by 14% in 2016 and by 15.7% in 2015, far outpacing overall retail industry growth rates of about 3.4%, according to the National Retail Federation.

Compared to Amazon, Jewelry TV and TV home shopping in general is tiny. But Engle sees that as an advantage, too.

“People still want some humanity in their retail,” Engle said. “I think there is a place for Amazon, I think there is a place for Macy’s, I think there is a place for all the retailers, but I also think there is a viable place for selling on video. Video is where the industry is moving anyway; we’ve just been doing it for 25 years.”

While every shopping channel has an eye on Amazon, Routh of FBN Securities said, there is room for the e-retailer and the channels to survive. “There is still a huge percentage of the population that stays at home and tends to watch channels like QVC and HSN as they’re doing other things,” Routh said.

Amazon made its name in books, movies and music, but has been steadily encroaching on other industries as it strives to dominate the retail sector. Last year, it became the largest online seller of clothing, racking up $16.3 billion in apparel sales in 2015, according to Internet Retailer. And the online giant is closing the gap between itself and big-box retailers like Walmart, with $24 billion of total sales in 2015, and Macy’s, with $21 billion, Internet Retailer reported.

Amazon has reportedly investigated launching its own shopping channel, a “QVC Killer,” according to tech site Geek Wire, which would allow purchases right from the screen. Amazon already has incorporated e-commerce features to its Amazon Fire Stick, allowing customers to purchase some items. And HSN signed a deal in 2016 to incorporate its Shop By Remote app on the Fire Stick and the app also is available on Android TV.

“We bring an experiential aspect and an engaging aspect, where I can sell a chrome dioxide ring and explain why chrome is so unique, what’s the story behind chrome, where in Russia is it mined, why is it so unique and why it is better to buy this than maybe an emerald,” Engle said. “You can’t get that behind the counter at a Zales or a Macy’s and you certainly are never going to get it from Amazon. That’s not where Amazon plays.”

Still, there’s little dispute that the TV home-shopping business is under pressure. QVC, long the sector’s undisputed king, saw its U.S. revenue dip 3.2% in 2016 to $6.3 billion, while overall sales stayed flat at $8.7 billion. In the second quarter, sales fell 4% to $1.97 billion from $2.1 billion in the previous year.

“It is a tough environment; we’re not here to suggest that the environment is going to suddenly get easier,” QVC CEO Mike George said on a July conference call announcing the deal. “And so, certainly the sales headwinds are a reality for retailers.”

At HSN, net sales fell 2.7% in 2016 to $3.6 billion, and the slide continued in the first half of 2017, with overall revenue declining 5.9% to $1.6 billion.

“[I]t has been a tough period; we’re not happy with the performance,” HSN CEO Rod Little said on the July call. “It’s part of why we’re here today, I guess.”

HSN expects the market to begin turning around in the second quarter, when efforts to cut costs and the divestiture of some smaller apparel lines kicks in.

“And then it’s all about leveraging the capabilities; digital, social, some of the platform e-commerce elements that QVC has and taking the best of both mindsets, what they’re good at, what we’re good at, and getting after some of those very quickly,” Little said.

Home shopping networks have largely stayed out of the battles between pay TV programmers and distributors for good reason. The channels are offered for free and distributors also get a cut of sales generated in their markets. At HSN, that has meant that pay TV providers have received a 10% slice of their nearly $4 billion in annual sales, while QVC shares up to 5% of its $6.5 billion in U.S. revenue. Those percentages will be modified after the deal closes in the fourth quarter, but isn’t expected to be a dramatic reduction in the overall pie.

Some operators have said the deal will force a re-evaluation of the QVC and HSN networks, which include QVC2, Beauty iQ and HSN2, in addition to the main QVC and HSN channels.

“They do pay us, but it’s not a huge amount of money,” said one midsize distributor who asked not to be named, adding that the merger could be an opportunity to reduce the number of QVC-HSN channels carried, which could then be used for broadband or for other content.

“Their second and third channels really don’t have the same value,” the midsize distributor said. “[The merger] makes it a little easier to push back.”

George, who will manage both companies when the deal is closed, said on the conference call that he understands that the combined companies’ five channels have varying degrees of distributor interest, with different channel positions, carriage structures and even some still broadcasting in standard definition.

“We’ve always believed in that, as a core principle at QVC, that our distributors should win when we’re winning,” George said on the call. “And so, we want to engage with them on what would that look like and what would make sense for all parties.”

“Timing is finally right,” Liberty Interactive CEO Greg Maffei said before ticking off the reasons for having QVC join forces with home-shopping channel rival HSN in a deal for $2.1 billion in stock.

The reasons mostly had to do with HSNi’s stock price falling to the point where it made sense for Liberty Interactive — which already owned 38.2% of HSNi — to buy out the rest of HSNi.

At points over the last couple of years, HSNi’s share price had been nearly 3 times that of QVC Group, Maffei said, but had slid to about 1.3 times. Measured by multiples of cash flow, QVC actually moved ahead of HSN, he said. “It seems like finally the market had come to our point of view.”

For the cable companies carrying QVC and HSN, the impact will take longer to measure, because those contracts are for relatively long terms. But the message from QVC CEO Mike George on a call with analysts on July 6 was: “Our distributors should win when we’re winning.”

Maffei, George and Rod Little, the chief financial officer at HSNi, told analysts on the conference call that after the transaction closes they will begin talks with distributors that carry the companies’ five channels: QVC, in 104 million homes; QVC2, in 60 million; BeautyiQ, in 40 million; HSN, in 91 million homes; and HSN2, in 48 million.

Barton Crockett, of FBR Capital, asked about differences in what QVC and HSN pay TV distributors. HSNi, he said, pays about 10% of revenue back to U.S. distributors while QVC pays out more like 4% of revenue in deals that have differing structures.

George said differences in deals, but also in channel positions and high-definition versus standard-definition carriage, will all be discussed to find out “what configuration would best optimize viewership for the customers and drive growth and then help restructure arrangements where our distributors benefit from the growth.”

A projected Q4 closing of the HSNi deal won’t be tied to Liberty Interactive’s pending purchase of Alaska cable operator General Communication Inc. (see cover story). Liberty Interactive plans to spin GCI into Liberty Ventures after that transaction closes.

Liberty Interactive Corp. and HSN Inc. (HSNI) have entered into an agreement that will see Liberty Interactive acquire the 62% of HSNi it does not already own in an all-stock transaction.

The deal is valued at $2.6 billion, including debt, or $2.1 billion in equity. HSN and QVC will remain separate brands. 

HSNi assets include 40-year-old multichannel retailer HSN (which launched its TV channel in 1994) and Cornerstone, which comprises home and apparel brands.

READ MORE: Liberty Interactive to buy Alaskan cable operator GCI for $1.1B

Liberty owns shopping network QVC. QVC is the bigger of the two retailers, with more than 8 million customers, while HSNi has more than 5 million, with about 2 million customers overlapping, the companies said. QVC is in 104 million homes and HSN is in 91 million homes, they said. 

HSNi shareholders will receive fixed consideration of 1.65 shares of QVCA for every share of HSNi. Former HSNi shareholders (excluding Liberty Interactive) will own 10.6% of QVC Group’s undiluted equity and 6.9% of undiluted voting power when the transaction concludes. The price reflects a 29% premium on HSNi, the companies said: HSNi closed on July 5 at $31.30 and opened today at $42.50 after the deal was announced. After 11 a.m. the stock was at about $40 per share, up about 28%. QVC A shares, at $24.36, was down about a half a percentage point at that time.

The companies project $75 million to $110 million in annual cost savings will be achieved in three years' time. 

HSN and QVC carriage agreements with TV distributors have different structures, with HSN paying out at a higher rate as a percentage of revenue, analysts pointed out during a call discussing the deal. Liberty Interactive CEO Greg Maffei and the heads of HSNi and QVC said they would be working with distributors, after the transaction closes, to find the best deals for all parties, including on variables including channel positioning and HD versus SD carriage in addition to payouts. Maffei said the distribution contracts are for relatively long terms so that won't be an immediate issue over the next 12 months. "Our distributors should win when we're winning," QVC CEO Mike George said.

Related: Internet Can’t Kill the Retail Star

HSNi headquarters will remain in St. Petersburg, Fla., and will be overseen by George. The acquisition, which awaits regulatory approval, is expected to be completed by the fourth quarter. Approval of the Liberty Interactive stockholders is not required. 

QVC has more than 17,000 employees and its ecommerce unit zulily has more than 3,000, while HSN has 6,500 employees.  

As for why the deal is happening now, Maffei said on the call that the "timing was finally right.” HSN has been trading lower, including on a cash-flow multiple basis, making the deal more affordable to QVC, he said. Management changes at HSNi also played a role: former CEO Mindy Grossman left in May to become chief at Weight Watchers. A year ago, HSN traded in the $50 per share range on NASDAQ.

"The addition of HSN will enhance QVC's position as the leading global video eCommerce retailer. Every year they together produce over 55,000 hours of shoppable video content and have strong positions on multiple linear channels and OTT platforms," said Maffei in a release. "The value of the combined QVC, HSNi and zulily will be further highlighted when later this year QVC Group becomes an asset-backed stock as part of the previously announced split-off of Liberty Ventures."

Liberty Interactive executives said the acquisition of HSNi will increase the scale of the QVC Group and boost cross-marketing “to better engage existing and potential customers.” It also noted HSNi’s lower debt leverage.

“Joining the QVC Group will give us instant access to global consumer markets, a leadership team with deep expertise and a global perspective, and the opportunity to further strengthen our content-based brand portfolios in a changing retail landscape,” said Arthur C. Martinez, HSNi’s chairman of the board of directors, also in a release. “We have both been innovators in a growing and dynamic retail environment with a unique vision of what shopping should be, and as new technologies continue to change our everyday lives, together we can develop the next generation of shopping for the next generation of consumers.”

Cornerstone’s brands include Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements.

Upon closing, the Liberty Interactive board of directors will be expanded to include a director from the HSNi board, selected by Liberty Interactive.

The companies said Allen & Company is serving as financial advisor and Baker Botts LLP is serving as legal advisor to Liberty Interactive. Centerview Partners and Goldman Sachs Group are serving as financial advisors and Davis Polk & Wardwell LLP is serving as legal advisor to the Special Committee of the Board of Directors of HSNi.

Over the past few years, digital technology has profoundly changed the home-shopping business, which not only appears to be surviving but, in many ways, is thriving despite radical changes in consumer-buying habits.

QVC, HSN and Evine Live have embraced e-commerce, with sales from digital platforms soaring to roughly half of their revenue. In fact, QVC and HSN ranked Nos. 8 and 19, respectively, this year in a list of the Top 25 e-commerce retailers compiled by eMarketer. And now, the products borne from the digital revolution — consumer electronics ranging from laptops to Fitbits — have supplanted jewelry as a key home-shopping product category.

As it turned out, the Internet didn’t kill home shopping. Instead, the major home-shopping channels stepped up to the plate with their websites and mobile apps; adjusted their mixes of merchandise to reflect the times; repurposed their TV content and created original programming for their digital platforms; and made aggressive, innovative forays into social media.

For the remainder of the year and going forward, executives at QVC, HSN and Evine said they will continue to make changes and find new ways to make buying on digital platforms more enticing and easy.

HSN, for example, will once again live-stream a fashion show featuring apparel from its celebrity vendor Serena Williams, with that event to take place later this month.

“Everything in the fashion show will be shoppable in the moment,” HSN president Bill Brand said.

QVC’s efforts have included launching an all-digital network — Beauty IQ, available on QVC.com — and experimenting with Facebook Live. And Evine is focusing on making its online checkout process as consumer-friendly as possible, as well as following the example of its two larger competitors by finding success with celebrity vendors, including Southern chef Paula Deen and actress-singer Vanessa Williams.

QVC, HSN and Evine say that these kinds of initiatives, as well as their ability to be nimble to adjust to consumer trends, have given them an advantage in a brutal retail environment. It’s a landscape in which brick-and-mortar companies are announcing store closings or filing for Chapter 11 protection, and one where Amazon.com appears to have changed shopping habits forever. QVC, HSN and Evine Live maintain the relationships they’ve forged with their longtime customers — who unabashedly enjoy shopping — through the networks’ vendors and hosts will also help them weather the storm.

“We were always part of a shopping experience that was best had outside of the traditional brick-and-mortar environment,” Doug Rose, QVC senior vice president of brand and communications, said.

And now those “super-engaged consumers” can shop online — on a desktop, laptop, tablet or smartphone — for any product 24/7, according to Brand.

That is not to say that home-shopping networks haven’t been buffeted by the changing retail climate. In the second quarter, QVC’s domestic network saw revenue increase 2% to $1.4 billion, but CEO Mike George warned that sales had tailed off the end of the quarter. HSN’s net sales slipped 3% from the prior year to $557.2 million, and Evine Live saw a similar dip, down 2% to $157 million.

But home-shopping network officials said their companies are better equipped to buck the negative trends in part by swiftly adjusting their on-air and digital offerings in a way that, in their view, traditional retailers cannot.

“We are so flexible we can go where the customers are taking us,” Rose said. “You’ll see us shifting airtime and resources and digital space to categories that are really responding and we’ll shift them away from ones that are not doing as well.”

DIGITAL REVOLUTION

In the second quarter, QVC’s digital sales increased to 51% of revenue, to $727 million, with mobile making up 57% of that, according to QVC’s parent, Liberty Interactive.

“People who like shopping for discovery like to fit it into the margins of their day, and so, when they’re grabbing a cup of coffee in line in Starbucks, they’re going to open up their app and they’re going to see what’s on QVC today,” Rose said.

Home-shopping networks were well-positioned to take advantage of the e-commerce boom. Digital made it easy for shoppers to buy merchandise from the networks’ vast inventories of product, even when it wasn’t being shown on-air. And QVC, HSN and Evine also had distribution systems in place to get goods directly to consumers.

In addition, the networks could post video from their telecasts online with products.

“Most brick-and-mortar retailers don’t have the internal structure to do all this kind of production,” Nicole Ostoya, Evine’s chief marketing officer, said. “It takes years producing 24/7. We’re making content and it’s taken all of these years to hone this skill.”

Officials at all three of the major home shopping networks say that their strategy is to tell viewers the interesting stories behind the brands and products they sell, and the people behind them, and video lets them do that online.

Today, these networks say that they are continuing to fine-tune their online experience for shoppers.

While some retailers viewed e-commerce and mobile “as something of a disruptive factor, we look at [them] as a unique opportunity,” Rose said.

Digital sales are also skyrocketing at HSN, making up 46-47% of its business, according to Brand. He said that his network’s most valuable customers shop across all of its platforms.

“I’ve had to really pivot this business to be sure that we’re building an experience that’s based in content but is seamless and frictionless across every single device,” he said. “The iPhone only came out in ’07 … and now smartphones and tablets make up 50% of all of our digital sales.”

On the mobile front, the focus at HSN is “on optimization,” making that experience as strong and consumer-friendly as possible, Brand said. And as a result of growing demand on digital, HSN has widened it online product assortment, particularly in the beauty category, according to Brand, “because our customers want great product when they want it, and that’s what digital provides.”

The third-largest home shopping network is officially named Evine Live, but on-air it has dropped the “Live” and refers to itself as just “Evine” because of its digital presence, Ostoya said.

“We think that Evine is cleaner and easier to understand,” she said. “A lot of places that people experience us — online, on our app — the content isn’t live, so it felt like [Evine Live] wasn’t exactly right.”

In the second quarter, the company reported about half of its sales are online, and 50% of those are actually done by mobile, Ostoya said.

“But a big piece of that is driven by what’s on-air,” she said. “What we’re finding is a lot of customers still see what we’re selling on the TV but instead of calling, they do the quick checkout on their second screen … So we have a really nice healthy online business, but there is that chunk that’s driven by what’s on TV.”

Like its larger competitors, Evine has been tweaking the content it offers online, and has new initiatives in the works for unique online content, according to Ostoya.

“In the old home-shopping/online world, we would just take our shows and repurpose them on the Web,” she said.

Now Evine is editing down 10-minute segments to two minutes for the Web, to make it more convenient for consumers, Ostoya said.

Evine is also working to ease the process for checking out and purchasing items online, and plans a total overhaul of its website next year under the guidance of its newly named chief digital officer, Macy’s veteran Sunil Verma, Ostoya said.

THE AMAZING GORILLA

E-commerce giant Amazon has been a disrupter, luring shoppers away from brickand- mortar retailers. This year, it also escalated efforts to sell apparel — a key category for home shopping — launching a live show called Style Code Live featuring clothes available on Amazon.

Rose and Brand said that while their home-shopping customers buy some goods on Amazon, the monster website doesn’t have the allure and attributes that attract many shoppers to HSN and QVC. Amazon’s emergence more than 20 years ago “has been wind on our back,” Rose said, “because for that entire time what it, in effect, did was help bring more and more people into the behavior of shopping remotely.”

But Amazon really just represents “a search-driven experience if you know what looking for and you are just trying to avoid running an errand,” according to Rose.

“Amazon is kind of the elephant in the room in retail right now,” HSN’s Brand said. “And they’re doing an amazing job of delivering product purely from a commodity standpoint ... Our point of differentiation comes through products you can’t find anywhere else, the content and the personalities [on the network], and the relationships.”

Some 75% of the merchandise HSN sells can’t be bought elsewhere, and popular vendors such as celebrity chef Wolfgang Puck and veteran host Colleen Lopez have loyal followings, according to Brand.

“Those relationships even in the toughest retail environment help us pull through,” he said, adding that shoppers don’t have a relationship with a search engine.

Ostoya described Amazon as “an incredible force in the marketplace” that is affecting everyone.

“Where we stand apart is Amazon is still a 2D experience: you can click on it, you can zoom in,” she said. “I know that they started Style Code, but they don’t quite understand the science that we understand about home shopping … They don’t understand that you have to get the information out clearly [about merchandise] right away ... They’re doing kind of a talk show. That’s not commerce shopping.”

SHAKING UP THE MIX

It’s an outdated notion that QVC and HSN are largely purveyors of cubic zirconia jewelry. With the explosion of consumer-electronics products, driven in good part by the Internet, QVC and HSN have diversified far beyond from jewelry sales in recent years and shifted their product mixes to include consumer electronics as common as tablets to newer wares just coming to market.

“We had great success with Amazon and its Echo device,” Rose said. “Those kinds of emerging technologies are very demonstrable and that’s kind of our sweet spot … Products that we are constantly looking for are those that have great stories to tell, and they might actually struggle a bit in the absence of telling that story.”

QVC also believes its growing international footprint gave it an advantage in the retail and home-shopping arena for consumer electronics and other categories. That reach allowed it to afford brands such as Dyson virtually global distribution through its home-shopping channels in Europe and the Far East, Rose said.

Consumer electronics “continues to be a strong pillar” of HSN’s strategy, and the network has built strong relationships with companies such as HP and Samsung, according to Brand. The network also is partnering with exercise-electronics maker Fitbit on offerings.

HSN has become such a player in the consumer-electronics arena that the industry turns to the electronic retailer for marketing advice, according to Brand.

“And the reason that the consumer-electronics business relies on us the way that they do is because of the understanding that we have of the female consumer,” he said. “It’s fascinating to go to [International] CES with our team and they rely on us to help them pick colors in laptops. Technology … is a big part of our business, but it’s also how women interact on social [media] and shop now.”

In contrast to QVC and HSN, Evine’s major product category remains jewelry and watches, Ostoya said. While the network has diversified its merchandise mix, it pulled back on the consumer-electronics segment last quarter and is retooling efforts “because we weren’t doing it well,” Ostoya said.

There’s a lot of potential in electronics because Evine hosts and expert vendors can explain all the benefits and features of a product on-air more skillfully than an untrained teen salesperson at Best Buy, she said.

QVC Group CEO Michael George will be able to buy a lot more baubles, bangles and beads from the home shopping conglomerate he runs, raking in a total of $19.7 million in total compensation in 2015, according to a proxy statement filed with the Securities and Exchange Commission Friday. 

QVC is part of Liberty Interactive, one of several companies that have spawned from cable legend John Malone Liberty Media. QVC is the largest holding of Liberty Interactive, which also includes online retailer Zulily and Liberty Ventures, which holds online companies Bodybuilding.com, CommerceHub, Evite and Right Start and minority interests in Time Warner Inc. and other companies.

George’s 2015 compensation increase was mainly due to $17.5 million in stock option awards the CEO received in 2015. George received no option awards in 2014. His total 2014 compensation was about $1.99 million.

The option awards are tied to a new five-year employment deal George reached with the company in September. As part of that agreement, he was eligible to receive a one-time grant of 1.7 million options to purchase QVC shares at a strike price of $26 per share. Half of those options vest on Dec. 31, 2019 and the rest on Dec. 31, 2020.    

In contrast, Liberty Interactive president and CEO Greg Maffei took a pay cut in 2015, reaping a total of $14.87 million in total compensation, compared to the $32.5 million he received in 2014. Option awards were the difference for Maffei as well – he received $3.6 million in option awards in 2015 compared to $28.6 million in 2014.

Options also played a big role in compensation gains for several other executives. Chief financial officer Christopher Shean received $7.7 million in total compensation in 2015 (up from $893,368 in 2014), including $6.3 million in option awards. Senior vice president Albert Rosenthaler saw his total compensation rise to $7.6 million in 2015 from $828,111 in 2014, mainly on the basis of a $6.3 million option award.

In their quest to find new products, develop more engaging content and attract new viewers, home-shopping networks have turned to a now-familiar programming genre: reality competition.

QVC, HSN and Evine Live have forged alliances with three of the stars of ABC’s primetime hit Shark Tank in order to create their own on-air competition “programs” or segments, as well as to source merchandise.

Last month, HSN unveiled its “American Dreams” initiative, which will feature Shark Tank’s Daymond John as part of a team searching for entrepreneurs with good ideas and products for the network.

Lori Greiner, a Shark Tank “shark” and veteran QVC vendor, became a financial backer for Scrub Daddy, a smiley-faced sponge that gained sales traction on the home-shopping channel. Last year, it was named Shark Tank’s most successful product.

And earlier this year, billionaire Shark Tank shark Mark Cuban hosted a series, Mark Cuban’s American Dream, on Evine Live where he showcased inventors whose companies he had invested in. The home-shopping network calls it “retail reality.”

Jewelry Television has gone all in on the trend, claiming to be the first shopping network to broadcast a full-fledged reality show, JTV Rock Star Designer. That half-hour program, chronicling the network’s national talent search for jewelry designers, airs on Fridays at 7:30 p.m. JTV is considering shopping around a second season of the show to a traditional cable network.

Home-shopping networks have good reason to piggyback on the popularity of reality-competition shows. As both the retail and television environments have grown increasingly competitive, home-shopping networks have been upgrading their programming — to make it about storytelling and entertainment — and reality competitions can add those elements.

BREAKING THROUGH

“What has appealed to us about this whole genre of reality competitions is that it’s in line with our overall brand marketing strategy, which is to look for disruptive, high-engagement opportunities to break through clutter,” Doug Rose, QVC’s senior vice president of brand and communications, said.

Home-shopping networks also want to broaden their audience, to reach those who may watch Shark Tank but never tune into “The Q.” And the home-shopping outlets are always looking for the next big product, and Shark Tank can scout for such wares.

HSN president Bill Brand emphasized the importance of expanding his network’s viewership through its “American Dreams” undertaking.

“Wherever those eyes and ears are, I want to build awareness, and ultimately it’s about acquisition,” he said. “I want to acquire new customers who never considered HSN, but now that we’re doing something like ‘American Dreams’ … maybe they’ll shop here.”

Seeing a QVC vendor such as Greiner on Shark Tank lets new audiences view the network as a TV venue with “really appealing personalities and great stories” behind its products rather than “just a parade of items,” Rose said.

HSN is in the midst of its “American Dreams” initiative, where it has enlisted five entrepreneurs, including John, the founder, president and CEO of apparel label FUBU, through Shark Tank, to search the nation using TV, radio, conferences and trade shows to discover new product ideas.

The others participating in the search are: Marc Portney, through investing in entrepreneurs on Science Channel’s series All-American Makers; Bob Circosta, through HSN’s revamped “American Dreams Ideas Portal,” convention searches and seminars; Akos Jankura, through the “My Cool Inventions” radio talent search; and Gregg Smith through Edison Nation, which operates a marketplace for independent inventors.

Once a month, HSN’s The Monday Night Show With Adam Freeman will dedicate its first hour to showcasing three or more entrepreneurs with their new products along with the entrepreneur who found them — be it John or one of the other four.

Brand maintained that reality-competition shows have actually taken a page from HSN’s playbook in terms of hunting for blockbuster products, citing inventor Joy Mangano and her Huggable Hanger line.

“It’s the idea of Joy Mangano on Long Island creating a hanger and now almost 700 million being sold: That’s competition,” Brand said. “And if you think about the number of entrepreneurs, the number of new ideas, the number of product ideas that come through the HSN pipeline at any given time, it’s competitive … Who’s going to get their shot at going into 96 million homes?”

HSN already had a relationship with John, who reached out to Brand about two years ago.

BULDING ON RELATIONSHIPS

“He was talking about being on Shark Tank and having these product ideas and he said, ‘Bill, do I have permission to talk about HSN on Shark Tank? And I said, ‘Do you have to ask me?’ ” Brand said.

John has been selling items from his own mobile-phone accessory line, Moguls Mobile, on HSN, and enjoys appearing om the home-shopping network, Brand said. In advance of “American Dreams,” John introduced three entrepreneurs and products from Shark Tank on HSN in July.

Products that John brings from Shark Tank will have added credibility because HSN viewers are engaged in pop culture and familiar with the ABC show, according to Brand.

Dominant home-shopping network QVC, owned by Liberty Interactive, has been particularly aggressive in the reality-competition space, capitalizing on the relationships some of its major vendors have had with such programming. Greiner had been inventing and selling products on QVC for years before she was chosen as part of the Shark Tank panel.

“Lori has been a breakout star for them and clearly has helped elevate awareness of QVC among that audience,” Rose said. “So we’re really grateful to be sort of riding on her coattails on that one.”

Inventor Aaron Krause had appeared on QVC early in the development of Scrub Daddy, Rose said. Greiner became an investor when Krause made his pitch on Shark Tank, and Scrub Daddy roared back to QVC with great success, jump-starting its sales push.

For two seasons, QVC collaborated with Lifetime’s Project Runway All Stars, partnering with the show where designer Isaac Mizrahi — who does collections for the home-shopping network — was a judge.

“We approached it with the expectation that there were a lot of people that watched that show and had come to really like Isaac and appreciate him and understand his esthetic, and had no idea that he had this huge business at QVC,” Rose said. “So why don’t we just remind folks engaged in that show that you can find Isaac’s complete line at QVC?”

Project Runway: All Stars incorporated fashion accessories from QVC on the show and used one of the shopping network’s then-hosts, Lisa Robertson, as a guest judge. Winners from two seasons created capsule fashion lines for QVC, with Seth Aaron Henderson’s “SA by Seth” still sold on the home-shopping network.

And once again, through an association with one of its vendors, QVC currently is participating in an initiative with Today. Jill Martin, a contributor on the NBC morning show, is also the creative director for QVC’s G.I.L.I. fashion line. The Peacock Network is staging a “Today’s Next Big Thing” competition, and recently finished accepting product submissions.

The finalists will make their pitches on Today this month, and the winner will appear with Martin on QVC.

TOO BIG FOR YOUTUBE

JTV, which sells jewelry and gemstones 24/7, turned to reality competition with its Rock Star Designer show to create more brand awareness, drive viewers to the channel and ultimately, increase sales, vice president of marketing Jill Johnson said. The program features five finalists from a competition that JTV held earlier this year, and one of the judges is Michael O’Connor, a celebrity stylist who was a fixture on QVC for many years. The program is a full-scale TV production with original sets, wardrobe and crew.

Rock Star Designer was initially planned as an offering for YouTube, where JTV is trying to beef up its presence, Tim Engle, the network’s chief strategy officer, said.

“But when we started to see the postproduction output, I felt like it was just way too good to relegate it to YouTube alone,” Engle said. “I felt our viewers would appreciate it as well.”

JTV president and CEO Tim Matthews agreed, and wanted the show to air in primetime on Friday nights, as a lead-in to one of the network’s most popular segments, “Girlfriend Friday,” Engle said. The show’s episodes are also available on YouTube and on JTV’s website.

Since the debut of Rock Star Designer, JTV’s YouTube viewership has doubled “every single week,” Engle said. And viewership on the TV show, as tracked by Rentrak, has been increasing, he said.

On a recent Friday night in August, sales on “Girlfriend Friday” appeared to get a big boost from its Rock Star Designer lead-in, Engle said.

“I would have to say was probably our largest sales for that slot in recent memory,” Engle said. “Even during the holidays I don’t remember it being that successful … We must have had really good viewership coming into that hour.”

JTV is running seven episodes of Rock Star Designer, ending Sept. 18. The winner will receive a $5,000 cash prize and get to design and sell a jewelry line on the network.

JTV has several options going forward, Engle said. It could do a second season of Rock Star Designer and only put it on YouTube. It could renew it to run on the home-shopping channel. Or it could try to take the show to a traditional cable network, perhaps a Lifetime or DIY, Engle said.

“The pitch we could make is that we would basically be co-branding or co-producing with a production company, except what we bring to the table — unlike any other reality program — is another network that’s in 85 million households,” Engle said. “So it’ll help bring viewers to a cable network and the quid pro quo obviously is there would be talk about Jewelry Television (on the show).”

JTV could possibly air a companion show, the way AMC does with Talking Dead after The Walking Dead, offering additional cross-promotion, Engle said.

Evine Live, the rebranded former ShopHQ, found success when it collaborated with Shark Tank’s Cuban. In August of last year the network premiered Mark Cuban’s American Dream, which featured nine entrepreneurs with new products that the Dallas Mavericks owner had invested in. The segment’s debut racked up the home-shopping network’s highest TV and online viewership in its history.

Last October, Evine Live brought Mark Cuban’s American Dream back for an encore, with five entrepreneurs returning with their best-selling products. One of the big hits was the Monkey Mat, a portable clean surface for babies and children that Cuban and Greiner invested in via Shark Tank.

“We’re strong believers in creating exciting and entertaining shopping experiences, and working with Mark Cuban is certainly all about that: Great ‘retail reality,’ as we would like to say,” Dawn Zaremba, Evine Live’s director of marketing, said.

It’s unclear if Cuban will be coming back to the home-shopping channel. “We are always in discussions with him and others to bring similar entertainment and exclusive products to Evine Live,” Zaremba said.

Linda Moss is a business journalist who writes frequently about home shopping television.

QVC Group, the home shopping arm of Liberty Interactive, has agreed to purchase online retailer zulily in a deal valued at about $2.4 billion.

Liberty Interactive will acquire zulily for $18.75 per share – about $9.38 per share in cash and 0.3098 shares of Liberty stock for each zulily share. The purchase price represents a 49% premium to zulily's closing price Froiday of $12.57 per share. Funding for the cash portion of the deal is expected to come from cash on hand at zulily and QVC’s revolving credit facility.

The acquisition will be attributed to Liberty Interactive’s QVC Group tracking stock.

Zulily was formed in 2010 by Darrell Cavens and Mark Vadon, catering to young families and holding “flash” sales for clothing, home décor, toys and other products. The company went public in 2013 and counts Chinese e-commerce giant Alibaba Group as one of its larger shareholders, but has seen its sales sink in the face of stiff completion from Amazon and other online retailers. The stock has been down about 65% in the past 12 months, but was up 47% ($5.92 per share) to $18.49 each on Monday after the Liberty deal was announced.

“We are excited for zulily to join the Liberty family,” said Liberty Interactive CEO Greg Maffei in a statement.  “Darrell, Mark and their team have built an impressive business around entertainment, discovery and value to the customer, which fits perfectly with the QVC philosophy.  Combined under Liberty, we have an incredible opportunity to delight shoppers from the TV to the Internet.”

The deal is expected to be complementary to Liberty and help strengthen QVC’s position in experiential, discovery driven shopping.  QVC and zulily will be operated as separate consumer brands, but it is anticipated that the combination will help boost zulily’s global scale, vendor relationships and video commerce expertise, while QVC will benefit from a younger customer demographic, personalization expertise and e-commerce capabilities.

“As the world leader in video and e-commerce retail, QVC is dedicated to reimagining shopping, entertainment and community as one,” said QVC CEO Mike George in a statement.  “In zulily, we see a like-minded brand that shares our passion for discovering great products, for delivering honest value, and for building long term relationships with customers.  Our teams are committed to learning from and inspiring each other and leveraging our platforms in new ways to accelerate growth, serve our customers better, and realize the full potential of both of these extraordinary brands.”

Zulily will remain based in Seattle and Cavens, currently President and CEO, will remain in that role. George is being appointed to the Executive Committee of the Liberty Interactive Board of Directors and will serve on that committee with Liberty chairman John Malone and Maffei.  Cavens will report directly to George and the other members of the Executive Committee.  In addition, Vadon will join the Liberty Interactive Board of Directors.

“Mark Vadon and I are incredibly excited to announce our partnership with QVC.  QVC has built an amazing business with a great culture and incredibly similar understanding for bringing entertainment, discovery and value into the daily customer experience.” Cavens said in a statement.  “This combination under Liberty is about investing in our future and providing a tremendous opportunity to accelerate our platform for growth of the zulily brand through the partnership with QVC.”

The transaction has been approved by the boards of directors of both companies and should close during the fourth quarter. 

Baker Botts L.L.P. is acting as legal advisor for Liberty Interactive.  Goldman Sachs is serving as financial advisor for zulily and Weil, Gotshal & Manges LLP and Cooley LLP are acting as legal advisors.

Liberty Interactive took steps toward the ultimate spin-off of its QVC shopping channel into a separate tracking stock Friday, agreeing to move its digital commerce assets into a separate entity Liberty Ventures.

According to Liberty Interactive, digital assets worth about $1.5 billion -- Bodybuiding.com, Backcountry.com. CommerceHub, Evite, Provide Commerce and The Right Start – and $1 billion in cash were attributed to Liberty Ventures. In return Liberty Interactive shareholders will receive 67.67 million shares of Liberty Ventures common stock (0.14 shares of Liberty Ventures stock for each Liberty Interactive share they own). As a result, Liberty Interactive, which includes QVC and Liberty’s interest in rival shopping channel HSN, will change its name to QVC Group.

"We are excited to introduce the QVC Group which focuses on our leadership position in video commerce, enables a cleaner comparable analysis and provides for more targeted share repurchase and equity incentives," said Liberty Interactive CEO Greg Maffei in a statement. "The Liberty Ventures Group is projected to have over $2.7 billion in cash by year end which we can invest in a wide set of opportunities in TMT, including digital commerce."

In addition Liberty Interactive, currently traded on the NASDAQ Exchange under the symbol "LINTA," has applied to NASDAQ to change its symbol to "QVCA." The company said the effective date of the symbol change will be announced separately.

Liberty Interactive first announced plans to spin off the digtal assets and QVC last October.

Those plans were put on temporary hold after the company sold the flower and gifting portion of Provide Commerce to floral giant FTD in exchange for a 35% interest in the combined company.

Comedienne and E! Entertainment star Joan Rivers died Thursday after complications from throat surgery last month, according to published reports.

The veteran comic and host of E!’s reality series Fashion Police never recovered after going into cardiac arrest during throat surgery on Aug. 28. The 81-year old comedienne was rushed to Mount Sinai Hospital after the surgery where she was placed into a medically-induced coma.

Her daugther Melissa Rivers released the following statement: "It is with great sadness that I announce the death of my mother. She passed peacefully at 1:17pm surrounded by family and close friends. My son and I would like to thank the doctors, nurses, and staff of Mount Sinai Hospital for the amazing care they provided for my mother. Cooper and I have found ourselves humbled by the outpouring of love, support, and prayers we have received from around the world. They have been heard and appreciated. My mother's greatest joy in life was to make people laugh. Although that is difficult to do right now, I know her final wish would be that we return to laughing soon."

Rivers was a comedic pioneer both on stage and on television during her multi-decade career. In recent years, Rivers was also well known for the red carpet coverage and commentary she provided for TV Guide Channel and E! and also was the host of Fashion Police. She also hosted an online talk show, In Bed With Joan, and co-starred with her daughter on the WE tv reality show, Joan & Melissa: Joan Knows Best. 

Her career began in theater and stand-up, but she caught the national spotlight when she appeared on NBC’s The Tonight Show starring Johnny Carson in 1965. She subsequently became Carson’s official fill-in, a role she played rom 1983-86 until she launched a rival talker, The Late Show on Fox in 1986. The move soured Carson and also kept her from appearing on the Tonight shows helmed by Jay Leno and Conan O’Brien. She didn’t return to NBC’s late-night leader until Jimmy Fallon made his hosting debut last February.

CBS said David Letterman, during the taping of tonight’s Late Show With David Letterman, commented: “Here’s a woman, a real pioneer for other women looking for careers in stand-up comedy. And talk about guts – she would come out here and sit in this chair and say some things that were unbelievable, just where you would have to swallow pretty hard… but it was hilarious… the force of her comedy was overpowering.”

E! Entertainment and NBCUniversal released this statement on Rivers' passing: “E! and NBCUniversal send our deepest condolences to Melissa, Cooper and her entire extended family on this incredibly sad day.  For decades Joan has made people laugh, shattered glass ceilings and revolutionized comedy.  She was unapologetic and fiercely dedicated to entertaining all of us and has left an indelible mark on the people that worked with her and on her legions of fans. She’s been a much beloved member of the E! family for over 20 years and the world is less funny without her in it.  Today our hearts are heavy knowing Joan will not be bounding through the doors.” E! Online also posted a tribute to Rivers.

Discovery Group president Henry Schlieff, a longtime friend of Rivers, said in a statement: “I knew Joan for more than 30 years and while we all recognized her incredible humor and extraordinary work ethic, I can honestly say that her greatest qualities were her loyal friendship and incredible exuberance for life: her intelligence was exceeded only by her genuine warmth.  Indeed, Joan broke down so many barriers in her career and had so many projects yet to come. I join all Joan’s friends and fans in sending my love to Melissa – and, our prayers that she finds some consolation in the knowledge that we all share in her loss.”

One of the first celebrities to pitch products on a home shopping network more than two decades ago, Rivers built a multi-million jewelry, apparel and accessory business on QVC. And even when she wasn’t on the home shopping network, she actively promoted her products, wearing them on not only Fashion Police but during her appearances on other TV shows and for photographs. With Rivers’s death, QVC will have to decide how to proceed with her collection, which is so closely tied to the oft-times controversial entertainer.

“She has been a special part of our QVC family for 24 years, and we knew Joan not only as an extraordinary comedian, writer, producer and business leader, but as a generous and caring spirit, who inspired us to be better every day,” QVC president and CEO Mike George said in a statement. “Joan truly loved her customers, and delighted in bringing joy and inspiration to their lives over these last many years.”