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From: esr@iheds.UUCP (Eileen Rieback)
Newsgroups: net.consumers
Subject: Question about Sweepstakes
Message-ID: <474@iheds.UUCP>
Date: Mon, 30-Dec-85 12:21:55 EST
Article-I.D.: iheds.474
Posted: Mon Dec 30 12:21:55 1985
Date-Received: Tue, 31-Dec-85 03:33:49 EST
Distribution: net
Organization: AT&T Bell Laboratories
Lines: 34

Well, it's the time of year again when our mailboxes bulge with those
Sweepstakes entries from magazine and book clearinghouses.  One company
is advertising a 10 million dollar grand prize!  My question is this:
How can a clearinghouse afford to give away prizes of such magnitude??

I am assuming several things in asking this question:
1. They are required by law to actually award the advertised prizes.
2. Since they are not the publishers themselves, but rather the "middleman"
   or distributor of the materials, they cannot expect to make more than
   a dollar or two on a $25 subscription.
3. An entrant does not have to subscribe to anything in order to enter, and
   subsequently win the Sweepstakes. (Or so we are lead to believe, anyway.)

If these assumptions are true, then it doesn't seem possible that an
advertising blitz such as this, complete with prime time TV commercials,
could possibly generate enough revenue to even pay for the sweepstakes
prizes, let alone to make a profit.  Even if 10 million people send in
their entry forms, how many of them will also subscribe to a magazine, since
it is not a prerequisite to winning??

I personally would rather deal directly with a magazine publisher for a
subscription, to avoid the possible problems with going through a
middleman.  Can that many millions of people feel otherwise and be
spurred on to subscribe just because of the lure of the glossy mailings
and big prizes???  Does anyone have an actual figures on the costs and
revenues generated by an advertising gimmick such as this?

As for me, I will not even bother to submit my sweepstakes entry, even
though I don't have to subscribe to anything. With my luck, the only thing
I stand to win for my 22 cent investment is the dubious honor of
having my name placed on 100 new junk mailing lists!  (Well now, maybe
THAT'S how they generate all the revenue ......)

E. Rieback