Psychic Friends Network

» see psychicfriendsnetwork.com as it lived, on the wayback machine

~ the goodbye ~

by the time i first connected a modem, this business was already in a bankruptcy court in maryland. it died in february 1998 and i went online later that same year, so the entire thing happened in a window i can only look at from outside. it also happened on american cable television, on an american telephone billing system, at hours of the night when i was a schoolkid in turkey.

the mechanism is the part worth explaining. a 1-900 number in the united states was a phone line the caller paid a premium to use, with the charge collected by the telephone company and passed back to whoever ran the line. it turned a phone call into a payment rail at a time when nobody had a way to charge a stranger small amounts of money. the psychic friends network was that rail with a television commercial attached.

inphomation communications, out of pikesville near baltimore, built it in 1991 under michael lasky, who had come out of the horse racing handicapping business. the product was a half hour infomercial hosted by dionne warwick in a talk-show format, with a number on the screen at 3.99 a minute. guests described what a reading had done for their love life. behind the number sat something like two thousand psychics taking calls from their own homes through a distribution system.

it worked to a degree that is difficult to state politely. between 1993 and 1994 the infomercial aired more than twelve thousand times. the company was spending around half a million dollars a week on cable airtime and taking in somewhere between a hundred and a hundred and twenty five million a year. only jane fonda's exercise video sold more from an infomercial slot.

~ the chronicle ~

~ what the money actually was ~

the thing being sold was time on the phone, not advice. every second the caller stayed on the line was revenue, so the incentive ran toward long conversations rather than useful ones. former operators have described the work as cold reading with a script, and the best known account of the inside comes from mark edward's book, which called it a psychic sweatshop.

what the company was actually good at was media buying. it bought cheap overnight cable inventory in bulk and ran a thirty minute ad that looked like a program, converting a share of the insomniac audience into billable minutes. that is a real skill and it is the one that stopped working first.

~ how it actually ended ~

the competition arrived first. rival psychic lines undercut the price and started handing out free minutes, which pulled callers off a premium number that had no way to answer on cost. the overnight cable inventory got more expensive at the same time, as every other operator discovered the same trick. regulators were meanwhile taking a much closer interest in the 900-number industry after a decade of complaints about billing.

revenue fell from over a hundred million a year to somewhere between twenty five and thirty million across the last two years. on 2 february 1998 inphomation filed for chapter 11 protection listing about 1.2 million dollars in assets against 26 million in liabilities, with around two hundred creditors and eight million of the debt disputed. a company built on predicting the future had not seen any of it coming, which is the line every newspaper in america used that week and none of them could resist.

~ the afterlife ~

the bankruptcy did not end quietly. lawsuits ran for years over where the money had gone, and in 2004 the estate won a 7.5 million dollar judgment against mci worldcom over the phone billing and settled for 4.1 million of it.

the name came back in 2012 as a small publicly traded shell that took a quarter of a million dollars in investment and promised psychic readings over online video, then renamed itself peer to peer network in december 2014. it is the same afterlife a lot of dead brands get, where a ticker symbol keeps walking around wearing the name. the actual business died with the 900 number, and it died for the reason most premium phone services died. the web gave away the same thing for nothing, and it never once charged by the minute.

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