Some of you may not remember this, but there was actually a time in this country’s history when regular, everyday people used to, with their hearts racing, run to the mailbox and tear open that Publishers Clearing House (PCH) envelope. We dreamed of riches and glory and the possibility that a TV crew would someday show up at our door and present us with a check for over a million dollars.
While many of us remember those iconic Prize Patrol commercials, we can’t help but wonder—I couldn’t help but wonder—what happened to that marketing giant that once dominated our mailboxes and television screens?
The Golden Age of the Big Check
In its heyday, PCH was more than just a company reselling magazines and giving away money—it was a cultural phenomenon. Founded in 1953, PCH turned a simple act of selling magazine subscriptions into people’s idealized hope of having the money to live the American dream. Their formula was brilliant: combine the thrill of a potential million-dollar prize with subscriptions and merchandise sales.
The company’s sweepstakes became legendary. Every time you’d see that van with the Prize Patrol logo pulled up to someone’s house on TV, you can’t help but imagine it happening to you. The winners’ reactions were priceless – tears of joy, disbelief, and sometimes even fainting at the sight of that oversized check. The first time they walked a tightrope and ran a Prize Patrol happening live after the Super Bowl, the result was a decade of publicity. Since its founding, PCH has given away $500 million in prizes.
Magazines. Meet the Internet
However, something called the internet killed PCH’s growth. Glossy magazines sold by the millions faced stiff competition from websites and social media. People asked: Why wait for next month’s issue when you could get your content instantly online?
The numbers tell the story. Magazine subscriptions, once the bread and butter of PCH’s business model, started dropping faster than a stone in a well. People weren’t just reading differently – they were living differently. The daily trip to the mailbox became a quick check of email notifications.
Business Lesson #1: Just Don’t Get Too Comfortable PCH’s first mistake was assuming its traditional business model was untouchable. Innovative businesses today need to constantly scan the horizon for disruptive technologies and changing consumer behaviors. The time to adapt isn’t when disruption hits—it’s before.
Legal Problems and the F Word
Covetousness, by a greediness of getting more, deprives itself of the true end of getting; it loses the enjoyment of what it had got. 17th Century English Writer Thomas Sprat
If the digital revolution wasn’t enough, PCH faced another challenge: legal scrutiny. Those enticing marketing materials that made everyone feel like they were “definitely a winner”? They caught the attention of state attorneys general across the country. By the early 2000s, PCH had paid over $50 million in settlements for allegedly misleading marketing practices. However, PCH began introducing an even more extreme version of their mailings that got them in even deeper legal waters and killed their credibility altogether. Not convinced that people were being told they were “definitely a winner,” the company began sending mailings telling them they were a FINALIST.
People began receiving mail telling them they were finalists, which was technically correct because they and the millions of people receiving the notification all had the same chance to win. However, the courts and those who received the mailings viewed it as legally deceptive.
In its heyday, PCH’s annual revenue exceeded $1 billion, and it sold over $800 million worth of magazine subscriptions annually from over 1,000 different magazine titles.
But greed and the Finalist “F” Word not only cost the company its reputation, but PCH ended up paying $34 million in settlements to 26 states in 2000 and $52 million in settlements in 2001. It’s been a rocky road since and the company, which once had thousands of employees, has just gone through another level of layoffs, reducing its headcount to 130.
On Mike Rowe’s recent podcast, “The Way I Heard It,” Frank Lester, a long-time PCH VP of Marketing, said that the vaunted “F” word was wholly responsible for destroying the company’s reputation, leading to a massive decline in profits.
Business Lesson #2: Short-Term Gains and Greed Can Lead to Long-Term Pain
PCH’s aggressive and misleading marketing tactics brought immediate results but eventually led to costly legal battles and reputation damage. Today’s businesses need to prioritize transparency and ethical marketing over quick wins. In the age of social media, reputation damage can be irreversible.
Your Grandparents’ PCH vs. Today’s Reality
Today’s Publishers Clearing House is an entirely different beast. It still exists, but it’s had to adapt to survive. The company now focuses heavily on digital platforms, running online games and sweepstakes through its website and mobile apps. The Prize Patrol still makes house calls, but you’re more likely to see the winners on YouTube than on network TV.
Business Lesson #3: Diversification is Survival
PCH’s eventual pivot to digital platforms shows the importance of not putting all your eggs in one basket. Smart businesses today need multiple revenue streams and platforms to reach their audience. When one channel falters, others can pick up the slack.
What Today’s Small Businesses Can Learn from PCH
- Stay Agile: Your current success doesn’t guarantee future survival. Build flexibility into your business model.
- Listen to Your Customers: PCH could have picked up early signals about changing consumer preferences if they’d been paying attention.
- Embrace Change: Don’t wait for disruption to force your hand. Be the disruptor in your industry.
- Build Trust: Short-term marketing wins aren’t worth long-term reputation damage.
- Innovate Continuously: Don’t just adapt to change – create it.
Publishers Clearing House hasn’t disappeared—it’s still here, but on a much smaller scale. Its demise and now comatose state offer some valuable lessons for any business navigating today’s rapidly changing marketplace. While the company eventually barely survived its challenges and legal issues, imagine how different things might have been if it had not succumbed to greed over reputation and led the digital revolution instead of following it.