Until a few years ago, videoconferencing had a future as brilliant as it was simple: international standards would be agreed, prices would fall, quality would rise, and every company would have a videoconferencing system.
This prognosis was accurate, except for the simplicity. The internet and other technological developments brought complexity, and it suddenly became feasible for every computer to be wired for video.
Videoconferencing and computing are converging, and different kinds of videoconferencing are making inroads into all aspects of IR. Small, unobtrusive cameras enable PC-based videoconferencing. Two people in different parts of the same building, or 2,000 people on two or three continents, can meet in a videoconference. According to video manufacturer PictureTel, attendees can ‘exchange, transfer and work on a range of documents and other applications, and file-sharing, application-sharing, and even analysis of 3-D graphics are available’ (www.picturetel.com).
Desktop internet access has rapidly and thoroughly invaded the financial community, says ING Barings, telecoms analyst Louisa Greenacre, and given that analysts and investors are now looking at web sites on their desks, it is easy to imagine them very quickly getting used to watching internet videoconferences, particularly one-way broadcasts with only voice interactivity. ‘That is, no camera pointing at them,’ she adds. ‘This would be a big improvement on the current voice conference calls.’
Streaming content
George MacIntosh of Geoconference in London says that one option is to transmit a live videoconference in which the CEO makes an announcement to, say, groups of analysts in New York, London and Frankfurt. ‘We then use video-streaming,’ says MacIntosh. ‘That means we put the video of the announcement onto the internet so people can look at it on the desktop hours, days or even weeks later.’
But before IR wholeheartedly embraces video, diverse obstacles must be negotiated. As an habitually person-to-person industry, investor relations is inherently resistant to video’s impersonality. Ed Buckingham, an analyst with IDC, the information technology marketing and research company, notes that video is still a foreign concept in a world of lunch meetings and the telephone. Furthermore, in many parts of the world, business meetings are conducted outside the office.
The state of a nation’s telecoms and datacoms infrastructure is also significant. As a PictureTel report on video in finance-related professions notes: ‘Germany can be seen as more video-ready than other countries: it has the greatest number of ISDN lines per capita anywhere in the world. And the Swiss market for videoconferencing within finance is wholly healthy.’ ISDN lines can handle large amounts of electronic traffic.
In addition, videoconferencing may simply be too open, too public to appeal to everyone’s personal or professional temperament. ‘Analysts and fund managers alike tell us that they attend company briefings primarily to receive facts to form the basis of questions they will ask later, in private. Fund managers, particularly, resist airing questions in open meetings,’ says Paul Reynolds, development director for Marchcom, which manages IR web sites for such clients as British Airways, TI Group, Sedgwick and ICL.
But videoconferencing is inexorably invading IR departments. Companies are already using videoconferencing for transcontinental results meetings. To simultaneously reach analysts in London and New York, Reuters rents satellite space and transmits its prelims and interims by videoconference.
When ISDN lines were installed in South Africa in 1995, mining company de Beers dropped audio in favour of video for its results in Johannesburg and London. ‘We use a PictureTel plug-in and go system which is nearly equivalent to broadcast quality. With video, audience members can participate more fully than with audio,’ says IRO Andrew Lamont.
Smaller video systems – rollabouts, compact and desktop video systems – are starting to proliferate. According to Reynolds, desktop systems appeal to fund managers who are under tremendous pressure to attend a multitude of meetings. ‘They can view videotaped meetings at their leisure and then use desktop video systems for post-meeting follow-ups. A fund-management team and a company can use standard videoconferencing to speak one-to-one.’
In Reynolds’ opinion, this methodology is so attractive that corporate visionaries may not wait until fund managers are wired. In weighing the increasingly affordable costs of videoconferencing against the hourly costs of the individuals involved, the larger companies will soon be installing video equipment gratis into selected fund management offices for regular conferences. The company will benefit from direct communication while interacting with an exclusive audience, and the competition will be excluded.’
Full frontal
In a detailed report entitled Key Trends for Videoconferencing 1997-2000, the Gartner Group, which specializes in IT market intelligence and strategic forecasting, concludes that ‘the videoconferencing industry will be marked by violent discontinuities.’ However, Gartner also notes that prices for desktop videoconferencing will ‘collapse,’ and real-time collaboration will soar from ‘virtually nothing to ubiquity by 1999.’
The consumer market will boom, as will the corporate market for systems that make ‘videoconferencing more like physical meetings, emphasizing easier-to-use interfaces and far better support for ancillary devices such as electronic whiteboards, smart document cameras and automatic ‘follow-me’ cameras.’
Already, Dow Chemical has installed Microsoft’s NetMeeting software on 30,000 desktops at 120 sites worldwide. Dow uses dataconferencing features in conjunction with videoconferencing to hold global staff meetings across North America, Europe and the Pacific Rim.
When Sweden’s Electrolux broadcast its annual meeting live on its web site, it seemed that poor picture quality rendered the experiment a failure. But many shareholders subsequently e-mailed the company expressing their appreciation at being able to view the proceedings. To them the image quality was good enough, especially as the alternative – a trip to Stockholm – was out of the question. Electrolux’s CEO Asa Stenqvist believes that technological advances will make the process easier in the future. It could be sooner than he thinks. Last March, the Astec (BSR) extraordinary general meeting in London made headlines over investor anger at the majority shareholder, the American firm Emerson Electric. The investors were dismayed by Emerson-imposed board changes – and they were livid that no Emerson director appeared at the meeting.
In the not-too-distant future, the next best thing to physical presence – attendance by video – will be so common as to be taken for granted. Today, a board director can explicitly or tacitly take cover behind the inconvenience of intercontinental travel. Tomorrow, attendance at distant meetings will require only stepping in front of a nearby camera.
It will be harder to hide when cameras are everywhere.
Seeing is believing
Business video is back. Last year, FT Veritas offered live and on-demand video of corporate announcements, analysts’ meetings, interviews, morning briefings and the like. The perceived gap in the market was illusory and within months of its spring launch, FT Veritas was history.
No sooner was it buried than CNBC/Dow Jones Business Video hit the ground running (www.cnbcdowjones.com). As well as live and on-demand video available for six months after the event, ‘subscribers can set up personal profiles by ticker symbol, category and key words,’ says Mike Wheeler, president of the service.
Investors and others researching a company ‘can look at the numbers and read the news stories, but if you can actually see market-moving events or the complete interview of a CEO, you get a better sense of the situation,’ he adds.
Most of the major firms in the financial industry are subscribers, including companies in Europe and Asia. ‘The beauty of it for people in Asia is that they can learn about US events before they hit their local newspapers, because of the time difference.’ The beauty for all potential customers is that, in contrast to the hefty fees charged by FT Veritas (approximately $15-25k annually depending on service type and level), CNBC/Dow Jones charges a mere $300 per year.
A joint venture which also includes Microsoft, CNBC/Dow Jones Business Video will provide segments of business events and interviews to Desktop Data and First Call’s Research Direct for re-distribution. Content is also distributed through Audible, Bloomberg, CompuServe, Individual, Multex, Wall Street Journal Interactive Edition and WavePhore.
