AT&T Picturephone

AT&T demonstrated the Picturephone at the 1964 World’s Fair as a vision of the telephonic future: a small screen above the handset showing the caller’s face in real time over ordinary telephone lines. The company spent more than $500 million developing the system before commercial launch on July 1, 1970, in Pittsburgh, where 38 units were installed across eight companies. The service allowed subscribers to see each other during calls at 30 frames per second over dedicated wideband circuits — technically impressive for its era.

The commercial failure was rapid and total. Peak subscribership was 453 users in early 1973. By the end of July 1974, five units were still in service in Pittsburgh. The barriers were structural: at $160 per month ($947 in 2012 terms) for the first unit, few businesses could justify the cost, and because so few people had Picturephones, the network effect worked in reverse — the fewer subscribers, the less reason to subscribe. AT&T eventually concluded that the Picturephone was a concept looking for a market. Video calling finally became mainstream not through the telephone network but through the internet, and not until Skype in 2003 and the smartphone era after 2007.