The PicturePhone

At the same time that the PicturePhone was being perpetually discontinued and relaunched, Noll began taking an interest in trying to understand why some impressive high technology products succeeded and why others that were equally impressive failed. Noll started publishing articles that analyzed the commercial success of various Telecommunication Products. At this point, Noll had completely moved away from Engineering and from directly working with Electronics. He was never formally in a position solely dedicated to analyzing and researching the market for Telecommunication Products. However, he would find his way into doing that sort of work as he became a Distract Manager at AT&T and then moving into a academic, pedagogical position, eventually becoming a Professor of Communication and Journalism at USC. While Noll was a District Manager  at AT&T, he developed business plans and conducted Market Research. Over the years, Noll accumulated many articles, papers and publications on a wide range of Telecommunications technologies such as Videotex, Supertex, Electronic Newspapers, and other Information and Digital Technologies, and most importantly for this exhibit the Picturephone. 

In 1992, Noll wrote "Anatomy of a Failure: Picturephone revisited" where he analyzes the the commercial failure of the PicturePhone.The failure to sell the PicturePhone in the early 1970s caught AT&T by surprise. Up until then Bell Labs' technological achievements always made its way into a successful commercial product. The PicturePhone was the first major market failure for the Bell System, costing AT&T $500 million (about $4.5 billion in 2022) to develop. It quickly became apparent that most business customers and residential consumers did not need the PicturePhone. "The reasons for the market failure had little to do with either technology or cost,"¹. For most people, a telephone call totally satisfied their needs for long distance communication and for others the experience with video communication proved to be negative rather than beneficial.

The technology and engineering that went into the Picturephone was excellent. Picturephone service would have been provided over the existing telephone network. "Today's optical fibre and digital switching were not needed,". This suggests that today's, as in the year 2022, wireless connection infrastructure was not needed either. Noll admitted that he too was enamored with the PicturePhone and its underlying Technology. Noll confesses that "it is tempting indeed to become overly fascinated with technology". Noll even designed the Picturephone booth that was used in the movie 2001: A Space Odyssey. Noll solemnly concludes, at the time of writing in 1992, that there is still no evidence of widespread demand for video conferencing. Ultimately, Noll felt dissatisfied with the way AT&T handled market research into the PicturePhone. "Somehow trials and market studies cannot be performed objectively within large corporations." "It seems that once a top management commitment has been made to a new product or service, market research will be distorted to represent only the positie findings. The whole project, no matter how doomed, will continue headlong along its course to the very end."

Noll also wrote the piece "Videophone: A Flop That Won't die" for the New York Times in 1992 where he again analyzes why the failure of the PicturePhone.Noll writes that, "Sales were expected to reach into the tens of thousands, but they totaled only a few hundred" and that "Last week AT&T unveiled its newest videtelphone, with a $1,500 pricetag. Why should it succeed now?"

The following two quotes sums up the finding of Noll's many years of research and experience,

"The major thing thas hasn't changed, however is consumer psychology. The old picturephone failed because people simply didn't want it in their businesses or homes. AT&T Market research showed that, and so did the product introduction. A picturephone added little to phone conversations and sometimes even got in the way; the acoustic intimacy of a phone call was shattered by the visual imagery. Appearance became an issue. And users had to remain in place to stay on camera. Have people changed so much that these are no longer drawbacks? I doubt it. In the last few years, in lectures before hundreds of people, I have been doing informal polling about picturephones. When listeners are asked whether they would like to see the person on the other end of the telephone, some hands go up. Then I ask how many would want to be seen while using the phone. Very few, if any, hands are raised. Finally, I ask how many would pay extra not to have video service if it were made standard. A number of hands routinely go up. This suggests a negative marketing strategy for videophone service: Threaten the public with the service and charge extra not to have it. The Japanese have already tested these waters and gotten out. Small video telephones were marketed a few years ago by Mitsubishi and other companies, and they failed dismally—providing further evidence of the "ho hum" attitude that people have toward them." 

"AT&T's original market research showed that people - particulary in business- needed visual telecommunicatons, mostly graphics. Now the ubiquitous fax allows graphic telecommunication. There is no need for face-to-face telecommunication. Yet in telecommunications, we have seen resurrections of such past blunders as videotex, two-way interactive CATV, direction broadcast satellite, and now picturephones. Where's the innovation?"