As Billboards, Public Phones Always Work
They stand on corners from Brighton Beach to the Bronx, all but mocking New Yorkers: Pay phones that may or may not work, which you can’t even check for a dial tone without worrying about germs.
But they remain rooted in the pavement of New York, blocking pedestrian traffic, looking a bit like museum pieces in an age of cellphones, BlackBerrys and Bluetooth headsets.
There is a reason for their survival: Public telephones are one of the stranger cash cows in city finance. Not because of the coins that are fed into them, but rather because of the millions upon millions that companies are willing to pay to put ads on them.
The phone kiosks generate $62 million in advertising revenue annually — and last year the city got $13.7 million of the take, triple what it pulled in from calls.
Over all, the number of pay phones in New York is falling, as it is throughout the country. But in a phenomenon unique to New York, the phones are more valuable than ever, thanks to the intense competition among advertisers for attention in a city of eight million.
Phone companies say the pay phones are still necessary, noting that during 9/11 and the 2003 blackout, people lined up to use them. But it is the phone kiosks’ desirability to advertisers, who love them because they are inexpensive and plentiful, that appears to be driving pressure on the city for permission to install new phones in choice locations.
Since 2003, every new phone the city has authorized has been put at the curb, the only spot where city regulations permit advertising. It has approved moving 465 pay phones from alongside buildings to the curb.
The phones are a source of frustration to some neighborhood and community groups, who say the city is giving precious sidewalk space over to what New York needs least: more messages from Madison Avenue. They are urging the city to put limits on pay phones and their advertising.
“The phone booths are unkempt. They are dirty. The advertising is overwhelming,” said Vanessa Gruen, director of special projects for the Municipal Art Society, which has objected to the phones. “The sidewalks of New York are our biggest public space, and somebody should be watching over them, and they should not be for sale for the city to make money out of them.”
The Department of Information Technology and Telecommunications, which regulates the phones, declined to discuss their pay phone policies. Press aides to Mayor Michael R. Bloomberg did not respond to an e-mail message.
New York transformed the pay phone business in 1999 when it signed franchise agreements with all pay phone companies operating in the city and required them to use media representatives specializing in outdoor marketing to sell their ad space. Previously, only New York Telephone was licensed to provide pay phones in the city, though other companies did so anyway. Now, 39 pay phone companies have agreements.
Within two years, the city’s pay phone ad revenue had outstripped its earnings from calls. The city collects 26 percent of the ad money, while it gets 10 percent of the revenue from local calls and 50 percent from long-distance calls.
The gap between the income sources has continued to widen.
“One of the top buys in New York right now, and it has been for the last couple of years, is phone kiosks,” said Keith Stewart, vice president of Generation Outdoor, which places outdoor advertising. “We’re able to spend a fraction of what we would for other outdoor formats. With kiosks, I can blanket the city.”
Although the number of phones in the city is shrinking — there are now about 22,700 — , 80 percent of the decline has been from phones alongside buildings, rather than at the curb, according to the Department of Information Technology and Telecommunications. Those are the phones that do not permit advertising.
“It’s so clearly for advertising,” said David G. Liston, chairman of Manhattan Community Board Eight.
Mr. Liston would rather have trees than pay phones sprouting from city curbs. “Sometimes, you’ll see two and three pay phones together as if it’s an airport,” he said. “It’s almost as if they are putting out more phones for bigger ad spaces.”
Some restrictions have been put in place. Advertising on curbside kiosks on purely residential streets is not allowed. And no ads are permitted on any new pay phones approved since December 2004 in Manhattan neighborhoods south of Harlem.
Pay phone companies say they sympathize with neighborhood residents. But they warn that New York would be worse off with fewer public phones, and ads help the companies survive.
“It’s keeping the public pay phones alive,” said Les Shafran, executive director of the Independent Payphone Association of New York.
While the agreements vary, generally, the phone companies receive up to a third of the revenue, while media representatives who market the space take in roughly 50 percent.
“Pay phone providers in other parts of the county are seeing ad revenue, but not like New York,” said Tracey Timpanaro, editor and publisher of Perspectives on Public Communication magazine, a publication of the American Public Communications Council. “It’s the foot traffic. No other place is going to have that level of foot traffic.”
Mr. Stewart agrees: “It’s definitely a New York niche phenomenon. Once you get to New York, you’re batting with everything. You have taxi tops, transit shelters and urban panels. You have bus sides, bus interiors, subway interiors and subway platform posters. And then you have traditional bulletins — the billboards — and, in some cases, walls.”
Even in such a saturated market, Richard Schaps, the chairman and chief executive of Van Wagner, the media representative that controls advertising on 3,000 of the city’s phone kiosks, says there is room for growth.
Van Wagner has spent at least $129,000 since 2000 to lobby the city for pay phone advertising and the installation of phones on city streets. And it has asked the Traffic Audit Bureau, which monitors the reach of billboards and other outdoor media, to devise a method to measure pay phone kiosks as well — a first for the bureau.
