Irked Prodigy clients switch to rival GEnie

October 04, 1990|By Leslie Cauley

Some customers of Prodigy, the computerized shopping, news and information service, apparently would rather switch than fight.

According to GEnie, a competing service in Rockville, hundreds of subscribers to Prodigy, based in White Plains, N.Y., are switching to GEnie to protest Prodigy's plans to limit the number of free electronic mail messages to an average of one a day -- 30 a month -- starting next year.

"The timing was pretty good for us," said Neil Harris, market development manager for GEnie, a service of General Electric Co.

In October, GEnie began offering a package of computerized shopping, news and information services for a flat rate of $4.95 a month. At that rate, GEnie subscribers get unlimited access to more than 100 services, restricted to non-prime time hours -- weekends, holidays and from 6 p.m. to 8 a.m. during the week.

The $4.95 offer also includes unlimited electronic mail, which apparently is what drove some Prodigy subscribers to make the switch, Mr. Harris said.

"It's hard to attribute the surge to one particular source, but we've definitely had a lot of calls from people leaving Prodigy," he said.

Mr. Harris said one reason he knows that is because he's been talking to callers. So have other GEnie managers, who have been manning the phones at GEnie to help handle all the extra calls -- more than 1,000 a day for the last week -- that have been bombarding GEnie's switchboards.

According to Mr. Harris, call volume to GEnie's Rockville headquarters has tripled in the last month. That includes "several hundred" calls a day from Prodigy users.

All those extra calls have led to record sign-up rates this fall, he said.

"The sign-up rate in September was twice was it was in September last year," Mr. Harris said. "If this continues at the same rate in October, we'll probably sign up three times what we did [in October] last year."

Mr. Harris declined to say exactly how many subscribers have signed up in the past month. He said GEnie, which recently celebrated its fifth anniversary, currently has about 222,000 subscriber households.

GEnie's windfall apparently began about the same that Prodigy announced two major changes in its flat-rate plan -- a 30 percent rate increase, from $9.95 to $12.95, for month-to-month subscribers and an announcement that households would be limited to 30 free electronic mail, or "e-mail," messages a month starting sometime next year. Each message after that will cost 25 cents each. Prodigy currently offers unlimited e-mail to subscribers.

Prodigy has said the 30-message limit was necessary to curb abuse of the e-mail service, which is costly for the company to operate. According to Prodigy, some subscribers have been sending 1,000 or more messages a month, with at least one subscriber topping out at 20,000 messages in a single month.

In the past month, the number of subscribers to Prodigy has increased from 460,000 to 525,000, said Geoffrey Moore, director of market programs and communications for Prodigy, a joint venture of Sears, Roebuck & Co. and International Business Machines Corp.

Likewise, he said online shopping sales have increased by about 30 percent in the past month.

"I'm sure there are a few people who are unhappy [about the changes], but it's an insignificant number," Mr. Moore said.

Those changes included several pricing plans that offer discounts to people who sign up for six months or more.

Gary Arlen, editor of Interactivity Report, a trade publication based in Bethesda, estimates Prodigy will probably lose 5,000 to 6,000 customers as a result of the latest fracas. "But in the greater scheme of over 300,000 households, that's not too bad," he said.

While acknowledging that many of those unhappy subscribers will probably land at GEnie, Mr. Arlen said that could wind up being a double-edged sword if those new users drive up GEnie's e-mail costs substantially. "The question here is, 'Is GEnie reaping a benefit, or just getting somebody else's illness?' " Mr. Arlen said.

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