Videoconferencing is well over 50 years old. Today, it is fast and virtually free over the Internet. However, aside from extremely formal or informal events, videoconferencing has largely failed to catch on.
AT&T introduced videoconference at the 1964 World’s Fair. People in New York waited in line to walk into a booth and spend a few minutes talking to a stranger, with voice and video, in Disneyland, in California.
Simultaneously, they tried to commercialize the service by adding devices in Washington, D.C., and Chicago. The device was called AT&T Picturephone Mod I. However, the most common pricing plan cost $80 for 15 minutes of voice/video chat (about $660 adjusted to 2019). Three minutes of videoconferencing cost $16 ($130 adjusted to 2019). In the first six months of service, 71 customers paid for calls and volumes declined from there.
Additionally, besides the high prices, the video was tiny. Black-and-white screens measured 13 cm x 12 cm (about 5×5 inches) and connections oftentimes dropped.
Eventually, AT&T released a picturephone with the same internal parts but a more attractive plastic box. However, potential buyers still passed; the value video provided did not correlate to the additional cost either in terms of money or convenience.
AT&T Keeps Trying
Between 1966 and 1973, AT&T invested more than half a billion dollars developing and marketing the videophone. They renamed it the Picturephone Mod II, targeted to the corporate market. Nobody was interested.
By 1982, they created a Picturephone Service Meeting. The equipment and call costs were exorbitant, and nobody was interested.
Finally, in January 1992, AT&T released the VideoPhone 2500, a phone with a small color video screen. At the initial price of $1.5 million, the phone attracted literally no sales. They reduced the price to $1,000 and allowed people to rent the phone for $30 per day. Buyers refused even at these lower prices.
By the late 1990s, free videoconferencing appeared on the web but, even as it evolved, the product still remains largely a niche market. Even with a price of zero, many customers will prefer texting or speaking rather than videoconferencing. One exception is in certain office situations, where high-end videoconferencing systems can reduce the price of in-person travel.