Prodigy was a late 1980s online service that later morphed into an Internet service provider. It survived into the early 2000s but faded as its business model disappeared. Here’s what happened to Prodigy Internet.
Prodigy: You gotta get this thing
Prodigy started as a joint venture in the late 1980s between IBM and Sears. IBM preloaded it onto its PS/1 computers, but it worked with any IBM-compatible computer as well, and later with Macs. Unlike some other services like Compuserve, it used a front-end that depended on certain computer architectures. You couldn’t connect to Prodigy with a Commodore, for example. This limited the market somewhat, but Prodigy’s creators bet that making the service easy to use would make up for it.
They guessed right. It launched commercially in 1988. By 1990, it was the second largest service of its kind, with 465,000 subscribers. It offered flat-rate pricing until 1993, and the price was low: $12.95 per month.
Prodigy was a walled garden, a mini Internet unto itself, much like AOL and other early online services. You could e-mail other Prodigy users, shop, participate in discussion forums, and read online news. It didn’t offer downloads or games like its competitors, but it was much cheaper. Prodigy advertised heavily on TV, using the catchphrase “You gotta get this thing.” It was a true online portal, in the modern sense of the word.
Problems with Prodigy
Prodigy caught on quickly, but quickly ran into problems. It turned out that $12.95 per month for unlimited usage wasn’t sustainable when the most popular offerings were the e-mail and forums. Eventually, Prodigy had to raise prices to keep up with its costs.
And then there was censorship. The forums were heavily moderated. Foul language and heated arguments weren’t allowed. But the censorship grew to not even being able to mention other users by name. In one infamous example, a discussion in a coin collecting forum got nuked because it used the phrase “Roosevelt dime.” Prodigy happened to have a user named Roosevelt Dime.
I remember another issue, early in Prodigy’s years. A story circulated widely on private BBSs of a Prodigy user who found unrelated data–his own data–within Prodigy’s temporary files. This led to accusations that Prodigy stole your data and looked at it. Prodigy’s official response was that this was a bug in the program’s file handling, that when it overwrote deleted files, that formerly deleted content got mixed in with the Prodigy data. That’s theoretically possible, but people didn’t buy it. The story circulated widely among Prodigy members, but also among non-members. Prodigy eventually stopped caching data.
Then Prodigy made the mistake of offering unlimited chat, then taking it away when the cost ballooned. Between raising prices and giving services and then taking them back, Prodigy had a PR nightmare on its hands.
Prodigy survived all of this largely because more and more people were buying computers and modems for the first time in the early 1990s, so there was a large pool of potential customers to draw from. But that wouldn’t last forever.
And then came the Internet
The Internet was something that people who knew a lot about computers always asked one another about. College students in the 1980s and 1990s could get access to it, if they knew who to ask, and it provided a similar experience, for free. You could e-mail people, transfer files, participate in discussion groups and realtime chat. It had commercial potential, but was hard to use. But then along came this thing called the World Wide Web, which made it graphical and easy to use. In 1993, things started coming together. Companies like Prodigy and AOL mostly ignored it at first, then used it to connect themselves together, so a Prodigy user could send e-mail to someone on AOL or Compuserve.
In 1994, Prodigy started offering Web access, using its own proprietary web browser. Since their browser was nonstandard, it had issues, and by 1996, Prodigy offered true Internet access so mainstream browsers could work with it. It also offered web hosting. The proprietary, closed-off Prodigy services closed in 1999. The official reason was the rollover to the year 2000. Maybe Prodigy had Y2K problems and maybe it didn’t. Y2K was a common excuse to close a lot of stuff down in 1999.
Then broadhand started to overtake traditional dialup service, threatening Prodigy’s remaining business model. It wasn’t practical for companies like Prodigy to run high-speed data lines directly to its subscribers’ homes.
To give itself a chance at survival, Prodigy entered a partnership with SBC, the Baby Bell spinoff that later merged with AT&T and adopted its name. SBC was a large DSL provider. Then in 2001, SBC purchased Prodigy outright, and migrated Prodigy services into its partnership with Yahoo. SBC attempted unsuccessfully to sell the brand in 2005, then slowly folded what remained of the old Prodigy content. AT&T cut off the old Prodigy web hosting sometime around 2009.
The once high-flying brand slowly faded away within AT&T, largely forgotten. That’s what happened to Prodigy Internet.