IVR service bureau companies have been informed by Verizon, owners of MCI, that it will terminate billing for all 900 number pay-per-call programs in the United States, effective December 31, 2012.
900 numbers enjoyed an astounding run in the 1990’s as businesses like Microsoft used them for computer technical support. The US Passport office also employed 900 numbers for expedited passport requests. You could even listen to the astronauts on the space shuttle via a 900 number.
Then, there were the 900 number programs that usually consisted of girls in hot tubs saying “call me” on late night television. In most cases, when you did call, you probably got a lot less than you might have thought you were getting, especially since the major carriers banned billing for adult content within two years of the mass introduction of 900 services in 1989.
But, the place where 900 numbers had the most lasting impact in the minds of the consumers was in entertainment. Singer Michael Bolton had a popular 900 number for his fan club and WWF heavyweight champion Hulk Hogan’s 900 number was the most called number in the nation. And, who could forget Dionne Warwick and her Psychic Friends Network which was said to have earned $1 billion per year in the early 1990’s.
Psychic Friends Network went bankrupt in 1998 under a burden of heavy debt imposed on it by a tsunami of chargebacks and other disputes with the telephone companies who were unable, or unwilling, to collect from consumers on its 900 number calls.
You would have thought they could see that coming.
Why 900 Numbers Disappeared in the USA
Although the internet has taken a ring out of the pay per call (900 number) industry worldwide, in most countries, the business is still quite viable. In fact, in Canada, 900 numbers have actually showed an uptick thanks to participation television in recent years.
So, why didn’t the business survive in the United States?
There are several reasons that contributed to the demise of 900 numbers in the USA.
- No Cell Phone Access – For some inexplicable reason, mobile carriers in the USA never allowed calls to 900 numbers. This is commonplace in nearly all other countries.
- TDDRA – In July, 1996, this FTC policy outlined strict regulations for the pay per call industry. An industry that was at one time entirely under-regulated was now tremendously over-regulated. One such regulation allowed consumers to request a chargeback (rebate) on 900 number calls that would be required to be granted for first time requesters. With telephone companies unable to enforce its charges, it didn’t take consumers long to realize that they could abuse the system and not pay for their 900 number calls. “Your cat made the call? No problem, we’ll reimburse you.” (Yes, this was an actual reason why a consumer was granted a chargeback on a 900 number call.)
- Internet – Paid information by telephone became an after-thought once the internet took hold. Why pay for sports scores or weather reports when they could be obtained for free online? The internet also eliminated some major 900 number categories like newspaper and radio-sponsored personals services. It just made more sense to use the internet for dating, as it could deliver an important element that the phone could not: a photo.
- Carrier Greed – From the beginning, the carriers charged an exorbitant amount for its transport services for 900 numbers, as much as .35 per minute plus 15% of the cost of the call. While the cost of telephone calls declined rapidly over the past two decades, the carriers never lowered their rates on 900 numbers, thus making it impossible for low priced 900 numbers (common in other countries) to have a fighting chance. If there were a way to offer weather reports for 10 to 25 cents, we’d still have a market.
- 2002 – AT&T left the 900 number industry in 2002. As if that weren’t enough, MCI went bankrupt in 2002 and didn’t pay its customers for 900 number revenues. It was a double sided blow to the industry. When MCI emerged from bankruptcy, it enjoyed a 900 number monopoly and didn’t invest in any improvements to the business.
- Scams – When the 900 number industry began in the late 1980’s, it was self-regulated. Yeah, that worked well, didn’t it?
- Stigma – Most people don’t realize that Farrah Fawcett was only on Charlie’s Angels for one season, as she is the iconic figure of the show. The same with 900 numbers. Despite being banned by all carriers by 1991, the adult stigma of the early programs was long lasting in many companies’ minds and kept them away from the industry. It was a silly comparison since banks have long processed credit card transactions for hard core porn and nobody ever avoided banks.
Mobile is the future and clearly the future for the pay per call business is with billing mechanisms. Already, the USA is running way behind Europe and Canada in providing worthwhile new mobile billing mechanisms such as the Pound Code.
Perhaps, being late to the party will mean that the industry won’t get off to such a rocky start as 900 numbers did.
About the Author
Bob Bentz is the president of Advanced Telecom Services which had been in the 900 number industry since 1989. Fortunately, the company has reinvested itself in the mobile marketing business and now acts as the mobile marketing agency for many top brands and businesses.
You can follow Bob Bentz on Google + or on Twitter @BobBentz.
Editor's Note -- Some 900 numbers may continue after the New Year by using alternate billing methods, but the carrier-based billing method that we have known for three decades will soon be a thing of the past.