Path: utzoo!utgpu!news-server.csri.toronto.edu!rutgers!apple!bionet!hayes.ims.alaska.edu!accuvax.nwu.edu!nucsrl!telecom-request From: ndallen@contact.uucp (Nigel Allen) Newsgroups: comp.dcom.telecom Subject: Prodigy Responds to E-Mail Criticism Message-ID: <14998@accuvax.nwu.edu> Date: 27 Nov 90 05:00:00 GMT Sender: news@accuvax.nwu.edu Organization: Contact Public Unix BBS. Toronto, Canada. Lines: 115 Approved: Telecom@eecs.nwu.edu X-Submissions-To: telecom@eecs.nwu.edu X-Administrivia-To: telecom-request@eecs.nwu.edu X-Telecom-Digest: Volume 10, Issue 850, Message 1 of 6 I haven't had the chance to use Prodigy (the company doesn't seem to be interested in the Canadian market), but I thought people might want to see Prodigy's attempts to defend its position on e-mail charges. I found the following message on a hobbyist BBS. (I didn't actually call California, but the message originated there.) ------------- * Original message from Robert Stone * Originally posted on HOTTIPS BBS, Glendale, Calif., (818) 248-3088 Thought you might find the following interesting, and laughable. This was handed out at COMDEX to a friend of mine, with the words, "We don't give this to everyone, just those who persist in asking about E-mail." Oh, it was handed out by Prodigy at their booth. 11/9/90 handout at Comdex Prodigy stationery Prodigy Interactive Personal Service Prodigy Services Company 445 Hamilton Avenue White Plains, NY 10601 FACTS ABOUT MESSAGING ON THE PRODIGY SERVICE On September 6th Prodigy announced a repricing of personal messages sent on the Prodigy Service, effective Jan 1, 1991. Here are some facts about the new charges. The Prodigy service was designed to give American families a broad range of information, services, and transactions with unequaled ease of use and low coast. Some of our most popular features are news and stock quotes, home shopping and banking, airline ticketing, stock trading and our new encyclopedia, movie guide and travel guide. Hundreds of features are available -- including 30 free personal messages a month -- for a single, low flat fee of $9.95 a month in an annual subscription. Messages are delivered instantly anywhere in the country and held for your family and friends when they're not at home. Prodigy does not charge by the minute for any of these services and we don't impose an access charge on any of our 500 local-call telephone numbers nationwide. Our flat rate applies all the time without restrictions to "off peak" hours. We believe that remarkable value is unmatched by any media in America. There are basically two reasons why we can offer so much for so little. First, subscription revenue from members is supplemented by the commissions we earn when members buy things on the service. (Advertising alone, doesn't cover our costs. It's member response to that advertising that counts.) Every time you use the service to buy a holiday gift, book an airline ticket, pay a bill, trade a stock, send flowers or buy stamps, you are helping to assure the continuation of a flat, unmetered fee. Our unique distributed architecture accounts for the other part of the flat-fee equation. Most Prodigy service features follow a "one-to many" model. We send "data objects" from a central site to hundreds of thousands of members' home computers, where they are processed. The efficiencies of this process are reflected in our low, flat annual subscription fee. (more on reverse side) But personal messaging follows a different "one-to-Prodigy-to-one" model. Every message goes through costly leased telephone lines (often across the country), and is stored in our large central computers. Every time a member wants to read a message, it must be sent -- on demand -- back out over the network. This is much more expensive than the "one-to-many" model. When we began to test market in a few cities, we didn't have much live usage experience. We sized the network and set our flat-rate price at levels that assumed a moderate amount of personal messaging among families as part of a broad range of services. Most families typically make a few dozen long distance telephone calls a month. And that's the kind of messaging volume we expected. We were right -- in almost all cases. Well over 90% of member households sent fewer than 30 messages a month. A small minority of members used the Prodigy Service as a high-volume "E-mail" network -- something we didn't expect and certainly can't afford to offer at current rates. In retrospect, we see that we were giving people the ability to run up the cost of the Prodigy service without limit. As we approached our national launch in September, we found that 3% of members were sending nearly 90% of personal messages. A very small group of members had even created special programs capable of flooding the network with thousands of messages. Messaging volume was growing 20% as month and costs were escalating rapidly. We were spending more money to lease more lines, add more mainframe and storage capacity and divert skilled professionals to support this single feature among the hundreds available -- a feature being used very heavily by only a small percentage of members. With our launch nationwide on September 6th, we faced a business decision. We could continue to allow a small group of heavy messagers to keep pushing up the costs, and pass those costs on to the general membership in ever-higher fees. Or we could ask those who received the most value from heavy personal messaging to pay in proportion to the value they receive. There was only one fair choice. A flat 25-cent fee per personal message after 30 free per household each month begins January 1 and will help us to recover some of the many millions of dollars we spend to support this feature. 11/9/90 * message forwarded by Nigel Allen (ndallen@contact.uucp)