Much hype has surrounded information services and what they mean to the future of the paging industry.
By providing customers with information-such as news, sports scores and stock quotes-carriers hope to both change the perception of paging as a simple communications tool to that of a valuable source of information-raising revenue per subscriber in the process.
The cost of providing such services is negligible. Several information service providers today have established information feeds from news, sports, weather, travel and entertainment sources. A carrier needs only to set up a dedicated line between its network and the information service provider’s communications center.
Access fees charged to carriers vary, but generally are low enough to allow a mark up of anywhere from 40 percent to 100 percent, meaning carriers could charge subscribers anywhere from 50 cents to $2 extra a month for the service.
The potential is enormous, but not so much as to escape failure if implemented incorrectly. Entering this new market is like entering a hot tub-it might be better to ease in rather than take the plunge. At this point, carriers are sort of stirring the water with their feet. Industry analysts, information service providers and consumer experts alike agree that paging carriers must be careful in how they present these services to the consumer.
According to Donna Regenbaum, director of business development at PageMart Wireless Inc., the state of information services at present is just “the tip of the iceberg. We’re not even close to where we’re going to be with these types of services. Everybody now is determining their business models and trying to determine how this is going to work.”
According to John Zahurancik, North American telecom consultant for The Strategis Group, the information services that carriers offer are more of a novelty than something of value that can generate added revenues. For instance, when a customer signs up for alphanumeric service with Paging Network Inc., that customer automatically gets the CNN news service, just like he does a choice of alarms, a clock and a choice of colors.
“To get it past being a novelty, it has to be customizable in finer slices than it is right now,” Zahurancik said. “It has to be something to really convince people that this is valuable and not just the status quo … not something I didn’t know I had if I didn’t read the manual.”
Michael Forbes, director of marketing for information service provider Intelligent Information Inc., identified three possible levels of service. The first level is basic service, which PageNet and others offer now. These are basically group pages of general interest sent to all alpha customers without charge.
The next level is premium services, where subscribers are sent individualized information they choose on an ongoing basis for a fee, such as local sports, local traffic, local weather and horoscope information.
Forbes identified a third level to be available in the near future he called Pay-Per-View, where for a flat fee, subscribers can receive all the results of a limited-time event. For instance, for a one-time fee of $20, a customer will be paged with the score of all 64 games in the March Madness NCAA basketball tournament as they occur, or all medal results in the Olympics or the outcome of each World Cup game. Once the event is over, the subscriber stops getting the information.
Bill deKay, president of Conxus Communications Inc., said he may offer information services to his voice paging customers. By implementing text-to-speech technology, Pocketalk subscribers could have the same information “read” to them or even receive a radio broadcast of a given event.
But the first step is to get customers from the basic services offered now to paid premium service. The trick is to offer valuable information, and value is in the eye of the consumer.
Dick Wolfe of Driscoll/Wolfe Marketing & Research Consulting, which completed a study last year assessing consumer interest in various enhanced messaging service such as information services, said only the individual customer knows what matters most to him and as such must have a great amount of control in determining what information has value.
“As a customer, I want to be able to tell you what I want,” Wolfe said. “It has to be easy to set up and if I don’t like it, I have to be able to go in and change it.”
He suggested paging carriers offer an area on their Web sites where customer can log on, review a series of information service choices and their prices and check off which ones they want.
The options on the site must be highly customizable. Rather than just general news headlines, carriers must make available news headlines of a certain area. Rather than just all football scores, allow them the option of selecting individual teams. The finer the distinction, the more the service will cost.
Wolfe also suggested allowing customers the option to un-subscribe at will by not locking customers in to year-long obligations.
“They want to try services for 30 days and then decide if they want to keep it,” he said. “They don’t want to get locked into a year of this. Many won’t bother signing up if they can only do so for a year.”
Wolfe defined real-time local traffic situation alerts, local sports scores, local news and stock-quote alerts on the companies of their choice as the most popular types of information customers are interested in receiving via paging.
“One thing they don’t want is information sent to them in the form of advertising,” he said, not even if it offers discounted tickets to events or sales. “If they choose it, that’s fine. But for the most part, they say they don’t want pages that are basically advertising.”
This raises another issue. Because they’ve already indicated their areas of interest, information service subscribers have identified themselves as market segments.
“It’s going to be an effective medium to deliver really targeted messages going forward,” Forbes said. “We’ve got a real way to reach customers unpredicated to any other media. We’re talking about delivering content to a person wherever that person may be.”
But carriers don’t want to alienate their customers either by sending them unsolicited advertising.
“The feedback we’ve gotten is that because paging is intrusive, hard-sell advertising will not work,” Regenbaum said. “Where do customers draw the line to where they’re OK with it and where it’s annoying?”
Forbes said he believes the line is drawn by money. If paging operators can attract enough advertisers to subsidize the provision of information services, customers may be willing to put up with advertisements in exchange for free information. The key is to tag the advertisement with the information message. So the subscriber receives a news headline delivered with “brought to you by business X.” The carrier then stops charging the subscriber for the service because it is being sponsored by the advertiser instead.
“I don’t want messages that says `Call Boss’ and then `Always Coca Cola.’ I don’t want unsolicited messages,” Forbes explained. “But I would want messages like `Yankees 2, Rangers 3′ along with one that says `get 10 percent off Domino’s Pizza if you call now.’ It’s like advertisements on TV. I don’t mind them because I get to watch the Drew Carey show for free.”
Finally, before carriers can offer affordable customized information services, they must figure out how to transmit all these messages without eating up network capacity. Today if 20,000 customers request IBM stock information, the paging carrier has to send out 20,000 individual pages.
PageMart and other carriers are looking to find a way to program pagers over the air so the carrier need send only one page that 20,000 customers can receive. According to Regenbaum, this
technology is “on the horizon.”
