The rise and fall of QVC and HSN
Michael Girdley’s video chronicles the full lifecycle of America’s two flagship home‑shopping channels, QVC and the Home Shopping Network (HSN), from their humble origins in a 1977 radio promotion of can openers to their 2026 Chapter 11 bankruptcy. The narrative begins with Bud Paxson’s radio‑to‑TV experiment, the creation of the Home Shopping Club, and its 1986 IPO. It then follows entrepreneur Joe Siegel’s launch of QVC in 1986, his strategic cable‑operator equity deals that gave QVC monopoly‑level carriage, and the rapid early revenue growth fueled by celebrity hosts like Joan Rivers. The 1990s saw media moguls Barry Diller and John Malone acquire stakes, and Diller later use HSN’s cash to build the IAC empire. As broadband and streaming displaced cable in the 2010s, the channels’ sole distribution channel eroded, prompting a 2017 $2.1 billion stock merger that formed the Qurate parent and a pandemic‑driven sales peak of $14.17 billion in 2020. However, a 2021 fire that destroyed 75 % of a key North Carolina fulfillment center, combined with $6 billion of debt, a shrinking cable subscriber base (down >50 % from its peak by 2023), and an aging, repeat‑buyer‑only customer base (average age >60, 96 % repeat sales), led to a revenue decline to $10 billion and unsustainable operating leverage. By 2026 the company faced $6.6 billion debt, an expiring credit line, and loss of supplier support, culminating in Chapter 11 reorganization, the closure of the HSN campus, and layoffs of roughly 900‑1,000 employees. The video weaves business‑strategy analysis, human‑psychology insights, and personal anecdotes to explain why a once‑$26 billion empire collapsed.
Chapters
On April 16th, 2016, an empire of TV stations, two of them in fact, that taught America how to shop, declared bankruptcy. It was QVC and HSN, something many of my generation had grown up on, and the only place you could go and watch TV at 2 AM where a TV channel would move billions of dollars of Joan Rivers jewelry and stuff like that. But then just as suddenly as it had all grown into a huge $26 billion empire, both channels were gone. Forever. This video explains what happens. It's the rise and fall of QVC and HSN, because it's in the story too.
Oh, and by the way, thanks to David for sponsoring this video. More on them later.
You could download a cheat sheet for each one of these videos, including this one, off my website, girdley.com/youtube. What happened actually starts back in 1977. A Clearwater, Florida radio DJ named Bud Paxson had a problem. An advertiser had stiffed him on a bill and instead given him 112 brand new can openers in a box. So Bud had an idea. He told his DJ, go on the air and try to sell the damn things. And they're gone in under an hour. And without knowing it, the guys had stumbled upon something about human psychology. A lot of times it's not about the message or the thing, it's about getting somebody's attention and how you package it up, which is also a case in point about this channel. A few years later, Bud and his partner Roy Spear take the thing to television. They launched something called the Home Shopping Club, first on local cable TV, and then they go national. In 1985, they changed the name to the Home Shopping Network. By 1986, it was so successful, they IPO'd and took the company public.
Investors loved it too.
The stock would triple on day one. But there was an issue to happen. There was a guy who was watching from his home in Pennsylvania. He was an investor named Joe Siegel. He had founded a thing called the Franklin Mint. And if you're at a certain age, you remember this thing. They would sell kind of crazy coins and plates and stuff on TV, and he made a fortune doing it. Then he took that fortune after selling the Franklin Mint and then, believe it or not, lost it by investing in an upscale Swiss hotel. I'm not making this up. Joe needs a comeback, and he looks at HSN and says, "These guys don't know what they're doing. I can do this so much better. I'll bring better hosts, better product, and better everything." November 24th, 1986, just in time for the holidays, he launches QVC. Their first product, a shower radio, so you can listen to the radio while you're taking a shower. Joe, as I've talked about in other videos, is a genius entrepreneur who understands how leverage works and how to align incentives. He does something really smart. He calls all the big cable operators, Cablevision, TCI, all these guys, and says, hey, I'll give you a deal. I'll give you part ownership in my channel, but what I want in return is to be promoted in a featured place on your cable systems forever. These cable guys were shrewd business folks. If you look at some of them, like John Malone, they're legends in United States business history. Followed my stories here on this channel about how cable worked at the time. They were often given monopoly-level exclusivity to local territories. So basically QVC was given suddenly monopoly-level access to an entire, you know, swath of customers in each market where they partnered. QVC set a record that year for the most revenue of any startup in its first year, $112 million. Joan Rivers, who by this time was blackballed in Hollywood. She had a dirty mouth. I mean, let's go. Let's be real about it. She joined QVC as a guest host and would move over $1 billion worth of merchandise over the coming decades. Roy Mangiano sold 18,000 Miracle Mops on QVC in 20 minutes. By 1992, Barry Diller, a famous Hollywood and TV executive, buys 3% of the company for $25 million. And becomes CEO. John Malone's company, remember, one of those cable companies, he buys in as well, but he does it even a bigger scale. He comes in and he buys controlling interest of QVC, something his entities would own for the next 30 years. And at this point, nothing can stop QVC and HSN. They're printing money. Monopolies will do that. But here's the thing about business partnerships. They're often easy to get into, which you see how quickly we did in this story, but they're like marriages. They're easy to get into, really hard to get out of. Just ask all those people who fly to Vegas each year to get married by Elvis. But we'll come back to that later on in the story. As the '90s went on, HSN and QVC were some of the most interesting business drama going on. Barry Diller, remember the guy who was bought in and all that kind of stuff? Well, he quit in 1993 and he walked right across the street and went to go work for the competitor, Home Shopping Network. Would eventually use the Home Shopping Network and all the cash it was generating to create a holding company. Of diversified internet and media businesses called IAC, or Interactive Corp, worth eventually $40 billion. Hotels.com, Tinder, Match.com, Expedia, all part of his empire. As the 2010s came around, QVC and HSN were wedded to one distribution channel, the cable TV box. But as you might have seen in my video about ESPN on this channel, that was the time when the cable TV monopoly started to die. The core reason was internet started getting better. We were all going to YouTube and over-the-top streaming with services like Netflix. Suddenly the monopoly that had existed for QVC and HSN around these cable networks and their providers, well, that was going away.
But before we get into that, I want to talk about today's video sponsor, David. One thing that's surprisingly hard is finding a protein bar that actually makes sense nutritionally without tasting awful. Most bars either load up on sugar and calories, or they technically hit your macros but feel like eating drywall. David is built differently. Their Gold bars have 28 grams of protein and only 150 calories and zero sugar, which gives them one of the highest protein-to-calorie ratios on the market. And to put that in perspective, getting that same amount of protein from foods like peanut butter or almonds usually comes with hundreds more calories attached. The texture is actually good. The Gold bars have more of a soft doughy texture with crunchy crisps, while the Bronze bars lean into a lighter marshmallow-style texture with chocolate, so it feels like something you'd actually want to eat during the day and not just a fitness product. David is offering viewers a deal where if you buy 4 cartons, you get your 5th one free using the link below or the QR code on the screen. If you don't want to wait, you can also find them today at places like Target or Walmart.
Remember, this entire empire had been built on these monopolistic local cable operators, uh, and their incentive to keep UBC and HSN on their cable systems. As the 2010s went on and cable continued dying, the industry did something that's pretty typical when you're seeing consolidating or shrinking industries, which is consolidation of the companies. And in this case, in 2017, QVC went in and bought the parent of Home Shopping Network, $2.1 billion in stock. They combined them into one home shopping giant that was doing $14 billion a year in sales. As COVID came around in 2020, everybody was suddenly trapped at home. And, uh, it looked like a stroke of genius. What else did you have to do besides sit at your house, uh, selling you stuff? And that year, sales hit $14.17 billion. But there's one thing about these channels I hadn't really talked about, and if you ever watched them, you would have seen something kind of magical happening. The people who were selling the products were spending, to some extent, very little time selling people on the features and benefits of the products. They were spending more time developing relationships with the people who were watching. And if you're a 75-year-old who's mostly living at home, your spouse has passed away, what better way to find kind of companionship than a person who would show up every single night on your TV? They just happen to be selling you a shower radio. And I remember as a kid watching Home Shopping Network and QVC to just see the people calling in and talking about stuff. And a lot of times they were just kind of talking about the host's families or what was going on in their personal life and not talking about the items. It's crazy. Humorously enough, me and my 12-year-old friends back then in the '80s tried to call into Home Shopping Network and prank call them and get on the air. They smelled us 12-year-olds coming from a mile away and didn't let it happen.
But at least we tried. They had a 1-800 number. And at this time in the 2020s, debt was still cheap. You could borrow a lot of money and something that'll come back in the story was how much debt they put on the business. But the first thing that would start to go wrong for QVC was an episode that happened in late 2021. That was a fulfillment center in North Carolina that carried basically 30% of the entire inventory for the combined company caught on fire. 75% of it would burn up and it'd be put out of commission.
A worker would even die. He was a 21-year-old guy who had worked at the company.
6,000 people had worked there. 6 days before Christmas. It was such a big fire that the feds got involved. The ATF came in to investigate what had happened. Turns out that the owners of HSN and QVC had never thought to diversify away from this single point of failure.
And it all happened right before Christmas time. Look at big logistics providers. They have limits on the amount of concentration they have in any single warehouse. UPS, Amazon, FedEx, they don't make this mistake. And here are the owners of a $14 billion a year company that made precisely that. And as I talked before, there was $6 billion in debt on the company, and here they were getting shut down right at the biggest moment. In their annual sales cycle. This would have probably been survivable for the company, but there was a problem even bigger than all that. Remember all that cable kind of disruption and decline I talked about before that had started to get serious in the 2010s? Started to get worse in the 2020s. 2022, the cable industry in the United States would lose a record 5.1 million subscribers, a 6% decline in a single year. By the end of 2023, the market would be down over 50% from its peak. With only 64.5 million subscribers paying for cable still.
HSN and QVC, they had renamed the company Qurate, Q-U-R-A-T-E, like curate. You see, it's very punny. Would go down nearly 14% in 2022 in the post-pandemic era as things went back down to normal. And that decline would continue in 2023 with sales cratering down to nearly $10 billion. And management wasn't stupid. They had seen the decline of cable had been going on for 15 years. Any person with a brain can see it. They had presented answers like QVC Plus and a mobile app with the hopes that people would, you know, basically do online shopping via Home Shopping Network on their phone or tablets and stuff. But there was one number that was incredibly scary. By this point in the early 2020s, the average age of a buyer on Home Shopping Network or QVC was over 60. And in terms of buying, 96% of sales were to repeat customers. In other words, new people weren't coming in. And they definitely weren't young. See what's happening to the channels at this point. Every year the customers are getting older, they're buying less, and at the same time, fewer people are actually watching the channels at all because they're cutting the cord. And if you look at what happens next, the whole recipe for it was set in the merger that the two channels did back in 2017. They had modeled the entire, you know, combination of the two that the business would keep doing $14 billion a year in revenue. Put enough money and sent that out to shareholders. That's where the $6 billion typically goes. In order to make the deal get done. And that would be sustainable as long as they stayed at that level of revenue and profitability. They just didn't model out what would happen if the revenue went down to $10 billion. 2026 came along, and coming into this year, the company had a problem, which was they had $6.6 billion in debt, and a big chunk of that was in a line of credit that was going to expire later on this year, October 2026. And something I haven't talked about so far is that QVC and HSN had a genius model, one that many retailers use. Which is they saved a lot of their working capital and didn't need it because they didn't actually take possession of a lot of these items and pay for them until basically they had sold. But retailers have been failing a lot over the past decade, everybody from Fry's to Toys R Us, and the suppliers have learned their lesson. They don't want to get hung out to dry, so many of them, seeing the writing on the wall for QVC and HSN, started to pull their best products. If they let them carry their best products, they didn't give them favorable financing terms. What happened next is the same doom loop that Fry's went into on this channel, which is your sales decline, your fixed costs stay at the same level, your best suppliers start to cut you off, uh, and eventually the whole model just stops working when you can't meet your debt payments. Ironically, the problem with the whole thing was not because of the business itself. The margins on all this stuff was actually really good by retail standards. 35%, and your typical buyer was buying 28 things a year between Home Shopping Network and QVC. By those measures, they shouldn't be going out of business. But unfortunately, there was nothing that the ownership could do at this time. The entire thing, uh, was owned by John Malone's Liberty Media, and that was entirely structured to maximize tax efficiency and cash extraction. And there was no way for them to be able to insert more cash to rejuvenate the entire business. Oh, and one more fact that'll blow your mind. The top 5% of customers for Qurate would buy over 70 items per year. They're basically addicted to online shopping like a gambling addict would be to putting quarters in a slot machine or dollar bills or— well, they don't do that anymore. But, you know, you know what I'm saying? Credit cards. Fundamentally, if you look at the way the business was run, they had a bunch of call centers, people who would answer the phone when you called in. These are old folks, by the way.
It's not like they're doing e-commerce.
There's fulfillment. Call centers, studios, hosts, carriage fees. All of this doesn't care if you're doing $14 billion a year or $10 billion a year. When your revenue falls and your costs don't, eventually the accountants refer to this as negative operating leverage. A bad place to be. I mean, as 2025 came in, QVC, Qurate was losing $0.22 on every dollar that came through the door. I told you that a lot of the hosts had developed personal relationships with the guests. Are the customers? Well, Mary Beth Rowe, a lady who'd been there for decades as a host and people trusted to buy products from her, she retired and walked out the door. That's why on April 26th, 2026, the company that basically created home shopping over the television and taught us how to be good consumers— by the way, if you're interested, go on YouTube and watch some of the things where people, Chinese people, buy stuff online. It is crazy how different it is, but also how similar it is. To what we were doing as Americans 25 years ago, all done via TV and streaming. Pretty nuts. Out of Chapter 11 bankruptcy, the company has a chance to reorganize. The creditors are now firmly in control, uh, and having taken a big chunk of debt off the books, hopefully the new company can be smaller and more profitable and survive. The campus that Home Shopping Network operated out of in St. Petersburg, Florida has closed down and 900 people lost their jobs.
Nearly 1,000 employees at QVC are out of a job. The Westchester-based company has announced layoffs impacting around 900 workers.
It's amazing the wild ride that all started with some guy at a radio station in Florida selling 114 can openers because somebody had screwed him over on some advertising. Yeah, tribute to Bud. One thing that gets talked about a lot in business and in life is would you rather be lucky or good? And look, the guys who started QVC and HSN, they got lucky. They showed up precisely at a moment in which the technology and the regulatory framework around monopolies of local cable enabled them to create amazing businesses that printed money for decades. They were good enough to recognize that, and that's how vast fortunes get created— when you're lucky and good. But eventually technology in the world changed so much around these two businesses that the monopolies weren't there anymore and the money printing stopped, and it didn't matter how good anybody was at that point. 'cause these businesses were set up and weren't gonna succeed. Ultimately, the greatest entrepreneurs that I know tend to have a level of humility. They realized they were good, but also if they made a lot of money, they tended to be pretty lucky too. All right, hopefully you enjoyed this about HSN and QVC. If you did, tell me about it in the comments below. You telling me I did a good job encourages me to make more. Catch you next time.
