• by David Goetzl , June 22, 2010

QVC's push to expand its online business brings with it an opportunity to grow profits by cutting out payments to distributors. While the TV shopping network typically pays about a 5% commission to operators on items sold, the company doesn't pay the fee for Web sales.

On the Web site, about half of the offerings aren't available on-air -- or haven't been recently -- CEO Mike George said Tuesday. Online sales also help avoid phone costs, which can cut into sales. QVC is in 98 million U.S. homes.

George was somewhat muted in his assessment about revenue gains from digital sales at a Goldman Sachs event, saying "modest levels of margin expansion over time" can result. They are driven, in part, by the "expense offsets."

That commentary was in contrast to bullishness about the potential of the iPad to drive QVC's business, partly because the sleek devices can upgrade any dowdy image that home shopping networks may still face. Along with smartphones -- which George said have already brought strong growth -- QVC can be watched on an iPad and products can be ordered swiftly.

"I do think we have yet to comprehend the potential power of the iPad and iPhone platforms on our business," George said. "I just think it will extend viewership, extend engagement and create new kinds of experiences -- and quite frankly, invite new kinds of customers who couldn't get past the old stereotypes of home shopping."

Liberty Media owns QVC, which is carried by cable, satellite and telco TV providers that benefit from the commissions. QVC generated $7.4 billion in revenues last year, one-third from outside the U.S.