K-tel's founder and CEO Philip Kives, a demonstration salesman who had previously sold cookware door-to-door and in a department store, used television advertising in 1962 to sell Teflon-coated frying pans to a large-scale audience. Kives bought and marketed a number of other products from Seymour Popeil, father of Ronco founder Ron Popeil. Products such as the "Dial-O-Matic" (a food slicer that allowed the user to "dial in" to control the thickness of slices), the Veg-O-Matic, and the "Feather Touch Knife." The combination of inexpensive goods and a simple but hard-selling pitch were a novel combination in television advertising in the early 1960s. It was the birth of the infomercial. In August 1965, Kives took his "Feather Touch Knife" on the road to Australia and by Christmas had sold one million knives, netting a dollar profit per knife. Initially, his main U.S. supplier was Seymour Popeil, the father of Ronco founder Ron Popeil. Yet as K-tel grew, Popeil pulled out, forcing Kives to source his own products. His best selling one was the miracle brush, selling 28 million units.
Kives was born on a small country farm near Oungre, Saskatchewan, Canada. Like the other farmers in the area, Kives’ family struggled and was on welfare for many years. After leaving the farm he tried his hand at a variety of jobs including cab driver, cook and food truck operator. He eventually found his talent in door-to-door sales. Within two years, he was trying his luck in Atlantic City, New Jersey working the carnival circuit on the Boardwalk, where he learned the art of the sales pitch. He re-located back to Canada and made the first of many deals with Eaton’s Department Store in Toronto Wanting to pitch to a larger market, he realized TV was the answer. With no cash to fund his venture, he cut a deal that would later evolve into his trademark two-part formula. He first agreed to pay for television advertising, if a store like like Eaton’s would agree to stock the product; then, he would offer television stations a “per inquiry” or PI deal whereby they would receive an upfront down payment (representing the guaranteed sale of a minimum number of products) and then a percentage of every product sold beyond that number. The twin set of incentives ensured that the stores and stations were on his side, and the formula worked brilliantly. Although in the case of the first Eaton’s deal the pan itself was a disaster – because the Teflon came off with the eggs – Kives realized that the pitchman style he had perfected on the boardwalk of Atlantic City was a winning formula for TV.
K-tel was formally incorporated in 1968. After a successful decade in the 1970s, the company expanded rapidly both through acquisitions in its core area of business and diversification into other areas. Kives' cousin Raymond Kives worked as president of the K-tel USA division from 1967 to 1977, and the K-tel Europe division from 1977 to 1984. In the five years prior to 1981, K-tel sold more than $150 million LPs in 34 countries. Its sales jumped from a respectable $23 million in 1971 to $178 million in 1981. The company diversified, forming subsidiaries in areas such as real estate and oil exploration[1 and also acquired rival Candlelite Records in 1980. K-tel lost $15.9 million when Candlelite’s customers refused to pay for their shipments. The company experienced a reversal of fortune when the high-risk ventures went bad, and in 1984 the publicly traded U.S. entity, K-tel International, filed for Chapter 11 bankruptcy protection. In 1986, moreover, the Bank of Montreal foreclosed on the K-tel Canadian subsidiary, at the very moment of the USA Chapter 11 filing. Advised by Minneapolis-based Sullivan Associates, K-tel turned itself around, negotiating settlements with banks and other preferred and unsecured creditors. Six years later, after all the legal battles, a settlement was reached with the Bank of Montreal, and in 1991, Kives got his Canadian company back.The comeback gained speed in the 1990s. By 1994, the company ranked #7 on BusinessWeek’s annual Hot Growth List, for earning a $2.7 million profit on sales of $56 million in 1993. Mickey Elfenbein, Kives' nephew, was appointed CEO of the K-Tel International division in 1993, until the late 1990s. K-tel achieved a resurgence in worldwide sales, primarily of music-related products, and had a successful NASDAQ IPO trading under the symbol KTEL.