Prodigy Communications Corporation was an online service from 1984 to 2001 that offered its subscribers access to a broad range of networked services. It was one of the major internet service providers of the 1990s.
The company claimed it was the first consumer online service, citing its graphical user interface and basic architecture as differentiation from CompuServe, which started in 1979 and used a command-line interface.Tech Republic: "The Pre-Internet Online Service That Didn't Live Up To Its Name Prodigy was described by the New York Times as "family-oriented" and one of "the Big Three information services" in 1994. By 1990, it was the second-largest online service provider with 465,000 subscribers, trailing only CompuServe's 600,000.Shapiro, Eben. "THE MEDIA BUSINESS; New Features Are Planned By Prodigy", The New York Times, September 6, 1990 (The French Minitel had one million, but was used mainly from passive low-cost ASCII/Teletex terminals). Accessed February 4, 2008. "Prodigy has become the second-largest and fastest-growing computer-information company since it was introduced in 1988. It has 465,000 subscribers, compared with more than 600,000 for Compuserve Information Services, a unit of H & R Block Inc." In 1993 it was the largest.
In 2001, it was acquired by SBC Communications, which in 2005 became the present iteration of AT&T. The Mexican branch of Prodigy, however, was acquired by Telmex.
Early history
The roots of Prodigy date to 1980 when broadcaster CBS and telecommunications firm AT&T Corporation formed a joint venture named Venture One in Fair Lawn, New Jersey. The company conducted a market test of 100 homes in Ridgewood, New Jerseyand 100 in Fair Lawn, NJ: to gauge consumer interest in a Videotex-based TV set-top device that would allow consumers to shop at home and receive news, sports and weather. After concluding the market test, CBS and AT&T took the data and went their separate ways in pursuit of developing and profiting from this market demand.
Prodigy was founded on February 13, 1984 as Trintex, a joint venture including CBS, computer manufacturer IBM and retailer Sears, Roebuck and Company.Tom Shea, Big firms team up on videotex project, InfoWorld, March 12, 1984 The company was headed by Theodore Papes, a career IBM executive, until his retirement in 1992. CBS left the venture in 1986 when CBS CEO Tom Wyman was divesting properties outside of CBS's core broadcasting business. The company's service was launched regionally in 1988 in Atlanta, Hartford and San Francisco under the name Prodigy. The marketing rollout plan closely followed IBM's Systems Network Architecture (SNA) network backbone. A nationwide launch developed by ad agency J. Walter Thompson and sister company JWT Direct followed on September 6, 1990.
Subscribers using personal computers initially accessed the Prodigy service over copper wire telephone "POTS" service or X.25 dialup. Prodigy employed 1,200 bit/s modem connections for its initial rollout and offered low-cost 2,400 bit/s internal modems to subscribers at a discount to provide faster service and stabilize the diverse modem market. The host systems used were regionally distributed IBM Series/1 minicomputers managed by central IBM mainframes located in Yorktown Heights, New York.
Thanks to an aggressive media marketing campaign, bundling with various consumer-oriented computers such as IBM's PS/1 and PS/2 as well as various clones and Hayes modems, the Prodigy service soon had more than one million subscribers. To handle the traffic, Prodigy built a national network of POP (points of presence) sites that made local access numbers available for most homes in the U.S. This significantly expanded the service because subscribers were not required to dial long distance to access the service. The subscribers paid only for the local call (usually free), while Prodigy paid for the connection to its national data center in Yorktown.Atlantic magazine: "Rebuilding Prodigy" July 12, 2014
Development Under the guidance of Henry Heilbrunn, Prodigy developed a fully staffed 24/7 newsroom with editors, writers and graphic artists intent on building the world's first true online medium. The initial result was that Prodigy pioneered the concept of an online content portal—a single site offering news, weather, sports, communication with other members and shopping for goods and services such as groceries, general merchandise, brokerage services and airline reservations. The service provided several lifestyle features, including popular syndicated columnists, Zagat restaurant surveys, Consumer Reports articles and test reports, games for children and adults, in-depth original features called "Timely Topics", bulletin boards moderated by subject matter experts, movie reviews and email. Working with Heilbrunn in the early stages of Prodigy's design, Bob Bedard pioneered the business model for electronic commerce. Prodigy was the service that launched ESPN's online presence.
Prodigy quickly implemented application standard code modules loaded from diskette. These modules relied upon real-time tokenized data from Prodigy database servers to drive core Prodigy service functionality on local user PCs. This client-server design worked well; by staging application-specific and reusable common code modules on Prodigy end-user diskettes, millisecond "click-to-available-cursor" response times were achieved that were otherwise unachievable in 1986 over slow 1,200-to-2,400 bit/s modems.
The service was presented using a graphical user interface. The Data Object Architecture wrapped vector and incremental point graphics, encoded as per NAPLPS, along with interpretative programs written in the proprietary languages TBOL (Trintex Basic Object Language) and PAL (Prodigy Application Language). NAPLPS grew out of the Canadian Telidon project, becoming an international standard in 1983 after some extensions were added by AT&T Corporation. NAPLPS enabled the display of colors and graphics supporting electronic advertising, publishing and commerce. The initial emphasis was on DOS and later Microsoft Windows. After that, users could use the Apple Macintosh, but some Prodigy screens were not properly configured to the Mac standard, resulting in wasted space or partial graphics.
Prodigy's initial business model relied more on advertising and online shopping for cash flow than on monthly subscriptions. Subscribers were charged a flat monthly fee that provided unlimited access. Initially, a monthly rate was set for unlimited usage time and 30 personal messages. In addition, subscribers could purchase additional messages. Later, Prodigy divided its service into "Core" and "Plus" sections. Core section usage remained unlimited, but Plus sections were limited by usage time. Subscribers were afforded a monthly allotment of Plus time, but if that time was exceeded, the subscriber would incur additional charges based on usage time. A blue indicator in the bottom-right corner of the screen indicated the subscriber's section.
Prodigy's shopping applications initially underperformed relative to expectations. This was attributed to the company's misperception that online shoppers would pay a premium rather than expect discounts for merchandise and to the product's poor graphics that resulted from the limitations of current technology. Using the early NAPLPS graphic standard, rendering realistic images of products was impossible, presenting great difficulty for online merchants to market products.
Despite these challenges, Prodigy was primarily responsible for helping merchants such as PC Flowers become some of the earliest e-commerce success stories. However, revenue from advertising was limited.
By 1993, Prodigy was developing a network architecture now known as a content delivery network in which the network caches its most frequently accessed content as close as possible to the users. The company sold private versions of it within customers' private corporate networks.
Price increases Two of Prodigy's most popular services were its message boards and email. Because Prodigy's business model depended on rapidly growing advertising and online shopping revenue, email was initially developed primarily to aid shopping. However, it later found much greater usage as a means of general communication between users. The popularity of Prodigy's message boards caused users to remain connected to the service far longer than had been projected. This resulted in escalating expenses that adversely affected the service's cash flow and profitability.
To control costs and raise revenue, in January 1991, Prodigy modified its basic subscriber plans by allowing only 30 free email messages each month, while charging 25 cents for each additional email message, a policy that was later rescinded. In the summer of 1993, it began charging hourly rates for several of its most popular features, including its most popular feature, the message boards. This policy was later rescinded after tens of thousands of members left the service.
The price increases prompted an increase of "underground IDs" by which multiple users would share a single account and manipulate the email service to act as private bulletin boards. This was accomplished by sending emails to intentionally invalid addresses containing the name of the intended recipients. The service would return the emails, which were not billed, and users of the shared account would find the returned messages there. Replies were sent by entering the name of the first sender as the addressee, which would again trigger a return of the message.
Prodigy was slow to adopt features that made its rival AOL appealing, such as anonymous handles and real-time chat.
Eventually, the emergence of the Internet and the World Wide Web threatened to leave Prodigy behind.
Conversion to a true ISP
In 1994, Prodigy became the first of the early-generation dialup services to offer full access to the World Wide Web and to offer Web page hosting to its members. However, since Prodigy was not an actual Internet service provider, programs that needed an Internet connection, such as Internet Explorer and the Quake multiplayer game, could not be used with the service. Prodigy developed its own web browser, but it compared poorly to other mainstream browsers in terms of features.
In 1995/1996, Prodigy hired Ed Bennett and Will Lansing. From 1995 through 1996, Prodigy unveiled several Internet-related products. It debuted its real-time chat area within the service, similar to AOL's. Access to Usenet newsgroups was made available and Prodigy's first web presence, Astranet, was released shortly afterward. Astranet was to be a web-based news and information service supported partly by advertising. However, the site was considered experimental and incomplete. Another innovation was Skimmer, a market trial ISP service that became the base for Prodigy Internet.
In 1996, with Gregory C. Carr as chair, the company retooled itself as a true Internet service provider, making its main offering Internet access branded as Prodigy Internet. This new service featured personalized web content, news alerts to pagers, and Java chat. At the same time, Prodigy deemphasized its antiquated proprietary interface and editorial content, which were relabeled as Prodigy Classic. Prodigy Classic was discontinued on October 1, 1999 because the aging software was not Y2K-compliant. The service had 209,000 members when it was discontinued.
A public company