900 ways to make money

Communications News, July, 1990 by Bob Gitlin

900 WAYS TO MAKE MONEY

Ask Larry Summers for a 900 business plan and he'll laugh in your face.

"No 900 guy really knows what the hell he's going to do--none of 'em," says the president of a new Dallas-based service bureau, Wholesale Telephone Systems, and a major engineer of 900-program answering-machine technology in the U.S.

"We were one of the main Telesphere nodes for Prime Time to End Hunger," he says. "I got 37 calls. Telesphere, AT&T, Sprint, and MCI worked their butts off on that one. We must have all received fewer than 2000 calls nationally among us.

"Remember Elvis Lives? I got 140 calls.

"We thought they'd both be blockbuster programs."

On the other hand, some 900 services put together almost as afterthoughts are wildly popular.

Summers remembers a 900 viewers' poll for a George Foreman heavyweight bout. Viewers of The USA Network called in during the telecast to vote on whether the aging, portly pugilist ought to hang his gloves up.

"We didn't think it would be any big deal," Summers says. "We got 75,000 simultaneous call events."

One IP running a 900 dating line goes bust; another with the same idea strikes it rich.

"I saw two different guys do a World Series ticket giveaway," Summers says. "One got probably 80,000 calls, the other got 200."

The 900 entrepreneur has a hard enough time knowing if he's going to get a call tomorrow, let alone predict months down the road.

Many critics, like Summers, would like to see some reduction in red tape to increase incentive to get into the 900 business.

Cricket Matches

Although American ingenuity is responsible for much of the proliferation of activity in this area, the British invented the technology.

Our "900" is based on the "0898" flat-rate "premium-billed" service developed in the U.K. 22 years ago. (The English carry on with such innovations as dial-ins involving horse races and cricket matches.)

According to most observers of the U.S. scene, it was a pretty boring service here until players other than AT&T got involved.

Two years ago, Larry Summers adapted Dialogic cards to answer calls in a new class of equipment specifically geared for 900 and based on how the national telecommunications network works.

Any given line can be used for any given call at any given minute. That's what distinguishes this equipment from a configuration that works overtime and incurs concomitant expense to both service bureau and information provider (IP).

"That signaling will tell us where that call is supposed to go and how it's supposed to be hooked up," Summers says. "This is as opposed to the 976 world, where it rings and you need dedicated equipment."

This new technology put an end to the era of the "bargein" 900 call--all tariff-bound AT&T could provide with its Dial-It service, which debuted with presidential election phone-in polling and listening in on conversation among astronauts in space.

Upstart Telesphere

The upstart that now runs more 900 programs than any other, and prides itself on its flexibility in working with customers, is Telesphere.

Telesphere, with far less of a long-distance market than the other three to begin with, has made audiotext a more critical aspect of its business.

"Telesphere takes a small-business approach to 900," says Summers.

AT&T, Sprint--and even MCI, which Summers predicts will be the one to watch (as it becomes less stodgy in its requirements for paperwork)--have been accused of letting unwieldy bureaucracy slow entry into what can't be anything but a crapshoot.

Long lead times and prefix-bound number pricing, which makes innovative special situations impossible, are the traditional way a major carrier sells 900 lines.

"That's the only way AT&T can bill it, because they're still locked into the old LEC accounting machines," Summers says.

What does this mean to the entrepreneur of a 900 call?

It means that the IP, whether it goes through a service bureau or installs its own equipment, must go hat in hand to the IXC and show a long-term business plan.

Despite all this, however, 900 is booming.

Recent market studies predict a $2 billion U.S. industry by 1992.

Sports, business, clean-entertainment, and other applications have happily conspired to drive away much of the taint of "dial-a-porn."

Is Gab Fading?

Rick Bachman, marketing director at Texas Marketing Communications (TMC), estimates his current breakdown as follows: 60 sports-related programs, 20 financial-services lines, and 10 polling applications, to name the major areas.

Like most of his colleagues, he claims there is a strong move away from gab and other "soft" entertainment lines into more business types of programming.

As the environment of healthy innovation quickens, Bachman predicts an increase in hybrid audiotext, in which 800 and 900 will be merged.

"The IP pays an 800 charge and provides a service at the same time a client pays a 900 charge and disseminates information to the IP," he says.

One major accomplishment of 900 is the virtual elimination of pest calls.

If you're going to pay for it, you tend to make the call with serious intentions.