21st Century Payphones

David Wagner, Managing Editor | 4/10/2012 | 25 comments

David Wagner
A couple of years ago, I was at a conference about re-designing the economy for a new century. The conference was in a federal trade building in DC, and one of the things I noticed during one of the breaks was that there was a bank of about 25 payphones along one wall. No one was using the phones, but people had taken their smartphones and were lined up in the phone stalls like they would have been a decade or so before, using them as desks, places to lean, and a meeting place out of the flow of foot traffic.

I was amused by the irony, but also found it sad that the government had yet to convert those payphones into something more valuable than desks next to a restroom. Apparently, someone more entrepreneurial than me had a similar experience, because the company City 24/7 has a use for those old payphones.

In New York City, the company is starting a pilot program where they are going to convert 250 obsolete payphone booths into interactive kiosks. Part digital sign, part giant tablet, the new “phones” will feature neighborhood specific information including weather, information about nearby restaurants and shops, companies hiring in the vicinity, public service announcements, and anything else you can imagine serving up.

In the future, they could also be WiFi hotspots, Skype phones, and allow people to register complaints directly to the city. Here’s a video showing the proposed kiosks to give you an idea of what they might offer:

This is definitely a great idea for the city of New York. It will cost them nothing to convert the phones. If the program is successful, they’ll get a cut of the ad revenue and possibly have a solution for getting rid of over 12,000 eye sores around the city. Let’s face it, at this point those booths are just targets for graffiti, and anything that can aid the local economy more than an old phone booth is great.

You’ve also got to like City 24/7’s business plan. They’re essentially using the business plan railroads used in the 19th century. For the cost of building new infrastructure, they’re being given some of the most prime advertising real estate in New York City. One has to wonder why the various telephone companies running these booths in the past allowed such valuable real estate to fester to the point that they’ve lost it.

City 24/7 very cleverly found a way to carve a free space into New York’s crowded and expensive advertising landscape. Retail and marketing CIOs across the country should take note, because cities looking to rebuild crumbling infrastructure would likely be willing to give access to similar high traffic areas, including public restrooms and public transportation stops.

But there are some interesting concerns. For one, with the ubiquity of mobile devices, this is an idea that may be just a step behind. It is possible people will walk right by the kiosks with the restaurant information on them because they’re too busy checking OpenTable on their smartphones. Can the kiosks make enough revenue off of people without smartphones?

Another issue is protecting the kiosks from vandalism. No one can walk in a major city for more than a few minutes without seeing a vandalized payphone. The initial cost of the transition is probably pretty reasonable, but constantly replacing and protecting the screens may become a problem.

Still, governments partnering with retailers and marketers to rebuild the technology infrastructure is a winning concept. The technology is relatively simple, and from the point of view of the CIO, easily maintained (if the physical location is safe). The reach is significant, and better than digital signage and other similar options, because it provides a service for the viewer rather than simply demanding they look. I suspect it won’t be long until we see these in high traffic areas all around the US. What do you think?

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David Wagner   21st Century Pay Phones   4/11/2012 2:33:24 PM
Re: If They
@SaneIT- i used a pay phone a little more often as a kid, but you're right, they've been underused for decades.

I think for years as a kid, my favorite thing about them was picking up the phone, listening to the dial tone and pressing the volume button so I could hear the dial tone get louder and softer. Like all kids, i just loved pushing buttons. If they'd have just charged a quarter for that, maybe they'd stil be in use. Parents fall for stuff like that all the time with kids.
David Wagner   21st Century Pay Phones   4/11/2012 2:29:31 PM
Re: Making lemons out of lemonade
@Lufu- Ergonomics is not a small thing. the pictures I've seen have show 32 inch, vertical screens where the top half of the screen was eye to eye with an adult. The interesting thing here is that they seem beter viewed from a slightl distance. That's fine if you're reading the ads, but if you are using it to make some sort of transaction, it is not ideal.

If they're smart, they'll be on a swivel of some sort.
David Wagner   21st Century Pay Phones   4/11/2012 2:27:19 PM
Re: Smartphone-less
@waqasaltaf- As of March, 46% of Americans owned smartphones. That is up from 35% 6 months before that. Urban Americans where coverage is good are far more likely to own a phone than rural Americans. I can't find specific New York city numbers, but I bet the number is well over half. And the number is growing quickly.

It isn't the current number of peple without a cell phone that matters. It is the number of *New Yorkers* without them, and the growing number of people who wll soon join the rankers of smart phone owners that matters to City 24/7's success.

Additionally, there is the demographic reality for selling advertising. If City24/7 is going to make money, they need to sell restaurants, theaters, and other local places of business that the people using the system are the types of customers the businesses want. If you run a restaurant in Mnhattan whi do you want to attract-- the smartphone users or the non-smart-phone users?

WaqasAltaf   21st Century Pay Phones   4/11/2012 1:39:28 PM
I think the market of people without smartphones is underestimated (i.e. its a huge number) in terms of their potential to use such kiosks. There will also be smartphone users who might opt for this option. The user-friendliness of the interface to guide people will certainly attract a lot of people towards it and may become handy stuff for advertisers and companies running these machines can earn a lot of revenue.
LuFu   21st Century Pay Phones   4/11/2012 12:52:47 PM
Making lemons out of lemonade
@David - I give City 24/7 credit for trying to salvage the anachronistic and abandoned payphone banks and turn them into kiosks. I remain a skeptic that they will supplant a person's smartphone, especially if their revenue model is advertising. What is that CPM? PPT? CPA? Something new?

My personal problem with them is purely physical. I'm 6'2" and hate bending over to read an ATM screen. As I recall, the majority of phone booths had the phone positioned around my belly button. So I doubt I'll be using their kiosk except to search for a nearby chiropractor.
sohaibmasood   21st Century Pay Phones   4/11/2012 12:03:12 PM
Re: If They
@SaneIT: Same here, I have rarely used a pay phone in my life.

If the kiosks you mentioned provide more than just charging facility for cellphones they might be useful. I don't see them working for directions, we can use smartphones for directions or if you have a dead battery ask someone on the street for help. 
megadl   21st Century Pay Phones   4/11/2012 10:31:41 AM
Re: If They
Great article. An undertaking like this would probably be a good way to recycle and make use of discarded phones with little to no cost. However, a program like this would still require a lot of time, planning and maybe more costs than expected. For one, cellular sites can only support a limited number of phones and saturating an area with more phones could make it difficult to support connectivity. Another challenge is making sure that the program is secure and bug-free, which would require constant standby support and constant patching. I hope whoever plans to implement this will be successful, as it would mean better connectivity, more jobs and a better way to recycle old phones -- which can be better for the environment.
SaneIT   21st Century Pay Phones   4/11/2012 7:30:20 AM
Re: If They
The only time I ever used a payphone I was broke down about 50 miles from home and needed to call my parents.  Aside from that I never gave them much thought, if I was within walking distance of home I just walked/limped home if anything went wrong.  It doesn't surprise me at all that the payphone died but I do wonder about the usefulness of a kiosk in it's place.  It's been a long time since I have been to NYC but there was no shortage of information on the street, stores to pop into and ask directions, etc.  These kiosks sound a little like a solution looking for a problem.  Now if those kiosks had ports to get enough power to charge a phone and maybe pick up a WiFi connection I could see them being useful.
Henrisha   21st Century Pay Phones   4/11/2012 4:05:03 AM
Re: If They
I agree with Tinym that they have been sort of rendered obsolete because of mobile phones with time, although not completely. For example, if you were in a public place and your battery ran out, you'd probably thank the heavens for the presence of a pay phone in the area, especially if you need to make an important call (or call a cab, even).
Gigi   21st Century Pay Phones   4/11/2012 3:30:24 AM
David, due to the wide spread of communication technologies like mobile/Smartphones, this conversion is happening in almost all countries. I know now a day's old telephone booths/kiosks are converting in to multi stores with value added services like mobile and other bill payments, selling of mobile/DTH recharge coupons  etc. They also wants a revenue earning mechanism for survival.
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