'Psychic Network' Mastermind

June 18, 1995|By Alec Matthew Klein | Alec Matthew Klein,Sun Staff Writer

For Michael Warren Lasky, making predictions is not a whimsy. It's a career.

He cut his teeth as a professional sports handicapper, often guaranteeing the outcome of horse races. Then he divined an even more lucrative business -- the "Psychic Friends Network," a 900 telephone line produced by his Baltimore-based company, Inphomation Inc., makers of those 30-minute commercials dressed up as television talk shows.

The psychic line, geared for callers looking for advance notice on the outcome of their love life, career, or any other question of fate, has become one of the nation's top-grossing infomercials -- but not without also becoming the subject of controversy. The CBS news show "60 Minutes" called it the "Godzilla" of the industry. Some customers have complained about the service. And critics say it's appalling.

"It is nothing less than a national shame," said Bob Garfield of Advertising Age magazine. "It angers me, it frustrates me. At the very minimum, it's grossly exploitative of those probably least capable of defending themselves against naked ignorance and superstition."

But Mr. Lasky has been criticized before and shrugs it off now. "You have a phone in your hand," he said, "you don't have a gun to your head."

He insists he is only giving people what they want: Customers log an average of 2.5 million minutes per month calling their own personal "psychic," the company reports. At $3.99 a minute per call, the bill can add up quickly. For 15 minutes, for example, it costs $59.85; for 30 minutes, almost $120.

The result: Inphomation generates more than $100 million in annual sales, second only to Jane Fonda's fitness tape, according to industry analysts.

The "Psychic Friends Network" is part of a larger phenomenon -- the explosion of infomercials since the Reagan administration lifted restrictions on commercial air time in 1984. Television ads, once limited to 16 minutes per hour (20 minutes per hour during political campaigns), are now unlimited.

And the top has blown off. Television has become a free-wheeling bazaar of goods and services, the denizen of get-rich, lose-fat infomercials.

Today, nearly half of the nation's adult consumers have watched an infomercial, according to a recent Gallup Poll. All of which translates into more than $800 million a year in consumer spending and in excess of $400 million of air time bought annually.

Infomercials -- to some, the bane of late-night television -- is big business.

"Someone once said an ad is the truth well told. In 30 minutes, you have a lot of time to shape the truth," said Mitchell A. Orfuss, an executive of J. Walter Thompson, the huge New York advertising agency.

Increasingly, the infomercial industry is becoming the province of major corporations, including American Airlines, Black & Decker, Club-Med, Ford Motor Co., Pepsi, Procter & Gamble, Playboy, Revlon, Sears and others, according to the National Infomercial Marketing Association.

Inphomation Inc., launched in 1990, has helped fuel the wild-fire growth, playing nearly 800 ads a day on broadcast and cable television stations, offering viewers across the nation a stable of infomercials: "Barbara De Angelis Ph.D.: Making Love Work," a how-to on personal relationships; "The Helicopter Lure" for fisherman, and more recently, "Check It Out," a would-be detective's manual.

But the biggest money-maker is the "Psychic Friends Network."

For Mr. Lasky, the 900 line was more than a leap of faith. Asked whether he believes in psychics, he said, "It's very difficult to believe in a lot of different things, but the answer now has to be yes."

And based on its volume, so do many other people. But not all his customers have come away satisfied.

Betty Jean Jeffreys of North Carolina, for instance, said she couldn't get a straight answer from her psychic.

Worried about her finances, Ms. Jeffreys, a 57-year-old free-lance court reporter, called in August after watching the infomercial, a polished 30-minute segment with Grammy-award winning singer Dionne Warwick acting as hostess.

"It was so convincing," Ms. Jeffreys said.

What Ms. Jeffreys didn't know is that like other infomercial celebrities, Ms. Warwick is paid a fee and royalties for her appearances. Although Mr. Lasky declined to say how much he pays her, industry experts say celebrities' fees range from $5,000 to $50,000, with royalties ranging from 2 percent to 5 percent of gross revenue.

His psychics get a cut, too. Mr. Lasky said he pays his psychic "independent contractors" a percentage of each billable minute on the phone with a customer, a rate at which they can make between $200 and $800 a week. Now numbering about 2,000, he said he finds his psychics through other psychics.

But the anatomy of infomercials was not Ms. Jeffreys' concern. She wanted someone to talk to. So she dialed.

"They had a woman come on the line," she said. "Her conversation was very slow -- to hold me on the line and tell me nothing, just stuff that would fit anybody."

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