It would have been a great experiment – forcing an IRO into sensory deprivation chamber back in December 1999 and then removing them one year later to clinically observe their wide-eyed shock. ‘What’s happened to the world of webcasting and teleconferencing that I left behind?’ they’d murmur, crumpling to their knees in wonder. And their incredulity would be understandable – with the inception of Regulation Full Disclosure, corporate disclosure has had a shot in the arm. And now companies around the world are looking to technology to dig them out of this workload-extending nightmare.
‘There’s certainly been an upswing in activity in the last few months as a result of Regulation FD,’ reckons Tom Madden, CEO of Primezone Media Network in Los Angeles. ‘Companies that had not even thought of it a year ago are now preparing for webcasting. There wasn’t an interest level before but it’s been amazing to watch the transition over two quarters.’
‘The trend started about a year ago,’ claims Rob Adler, president of CCBN.com. ‘At that time we had maybe 500 companies webcasting. This quarter that number is 3000. That’s up 40 percent from last quarter. I think when FD was announced companies started acting as if it was already in effect.’
Mind you, not everyone cynically assumes that an SEC regulation is responsible for this shift in mindset. There are those who entertain the idea that IROs might be endeavoring to improve their communications output. ‘There’s definitely more of an interest,’ accepts Joe Weglein, marketing manager at AT&T, ‘although I’m not sure whether people are just meeting the requirements of the law or being good corporate citizens.’
That view is borne out by corporate behavior in the rest of the world. Webcasting and teleconferencing in Europe is also on the up, and not just in order to pre-empt the rise in investors’ expectations after Reg FD. ‘People are far more interested in streaming media,’ says Stephen Watson, MD of SimplyWebcast.com in London. ‘I’d say 18 months ago only a handful of FTSE 100 companies had streaming media. Most do now. I think the internet is emerging very rapidly as an efficient platform to deliver text and visual messages. Until recently, it hasn’t really been used to disseminate real time events and information.’
But why on earth not? The internet has become so widely recognised as a communications tool as to be almost passe. How is it that companies are only just catching on?
‘Previously, I think companies were concerned over who was listening,’ says Madden. ‘So we used to do a delayed web cast but they were still concerned about that. They’d say But the media will listen in! And we’d say, …Yeah!’
That isn’t as obtuse as it might sound. Despite the acceptance of FD, there remains some material that companies don’t want to divulge to a wider audience. ‘Some clients are concerned that there may be commercially-sensitive information going out,’ says Amy Mihalakis, marketing manager of Raw Communications in London, ‘but because we have complete control, we don’t necessarily have to put up all their Powerpoint slides.’
Even companies that are churning out a non-threatening material want to know who’s listening, though. Previously, webcasting has been criticized for being too unilateral; an entirely one-way process like shouting in a dark room. But times have changed.
‘At CCNN, we provide a service called guest booking,’ says Adler. ‘You’d know on a conference call who’s listening but not on a webcast. Until now. With guest booking you know exactly who has logged on.’
Raw Communications offers similar data, albeit after the event. ‘Any webcast we do, we now give feedback statistics,’ says Mihalakis. ‘And we find that the people who look at them are going to be your own employees, your competitors or people who are hoping to sell you something.’
Interactive wait
Webcasting is certainly evolving into a two-way communications tool. CCBN offer a polling capability as well as a service whereby the audience can e-mail questions. And yet, as Madden points out, ‘It will be a while before we have real interactivity.’ For this reason, the suggestion that webcasting will replace more traditional IR communications media such as teleconferences and physical meetings is something of a fallacy.
‘The advantage of a teleconference is that it is bilateral, interactive,’ says AT&T’s Weglein. ‘With a webcast, that capability doesn’t exist. Even where there is an online chat function, it won’t replace the teleconference.’ Watson also accepts that webcasting will not usurp traditional communication: ‘Webcasts are not undermining the currency of physical one-on-ones,’ he says. ‘One-on-ones offer a different ability to ask questions while webcasts get round problems of time and geography. And the ability to access the material on demand is a feature that people value. A webcast just adds another dimension to the physical meeting.’
These are all admirable sentiments. Anything that boosts the depth and width of disclosure is good in principle. But let’s not get carried away with this. We’ve all seen webcasts that leave a little to desired, where you have to twiddle your thumbs endlessly waiting for the stream to buffer; where a tiny, grainy image provides a viewing sensation not dissimilar to cataracts; where the muffled, intermittent audio drives the listener suicidal with frustration. Has the technology pulled itself together yet?
‘It depends on the individual’s connection’ says James Ormondroyd, finance director of Virtuebroadcasting. ‘If you’re connected through a bog-standard modem, the actual video quality might be quite poor but there will be a slide show which will be crystal-clear, as will the audio.’
‘We’re still in a period of experimentation,’ agrees Watson. ‘In terms of the quality of webcasts, I think you have to distinguish business-to-business webcasts from business-to-consumer webcasts. The quality for the institutions is changing rapidly for the better – most offices are behind a T1 so, even in a busy office on full screen, you still get a very credible image. Consumers though are still not in the broadband era yet. Broadband penetration is not great here in the UK – British Telecom have been a bit slow introducing ADSL so Germany leads the way in Europe – but if we were having this conversation in twelve months time I think broadband communications would be a reality.’
And, for once, it’s not a case of European standards lagging forlornly behind their swish US counterparts. There have been grumblings of dissent in North America too. ‘There’s been news over the last few days that one company has performed a study of webcasting,’ concedes Neal Lulofs, senior manager for marketing and communications at MCI Worldcom, in Chicago. ‘Out of a possible five, it has rated the average quality of companies’ streaming media as under two.’
Talk to the US webcasting firms themselves, though, and they’ll tell you that US technology is certainly up to scratch. But then there’s a crucial difference between North American and European approaches towards streaming media.
‘In the US, when we talk about webcasting, we mean audio,’ clarifies Adler. ‘It’s just like the radio, except we can synchronize it with slides. I think that video is still several years away and even then it will only be for certain events.’
So that’s the state of 21st century streaming media? Not exactly space-age. But then, according to Weglein, it doesn’t have to be. ‘Webcasting is strictly audio,’ he says, ‘because that’s enough to comply with FD and it doesn’t take up much bandwidth.’
Talking heads
The UK view seems to be that the technology should be made to work – that streaming presentations can and should incorporate whizz-bang media. ‘Because IR webcasts consist mainly of talking heads, the technology for streaming video is fine,’ argues Watson. ‘They’re not movie experiences – which would be difficult to reproduce.’
‘The technology’s perfect for talking heads,’ concurs Ormondroyd. ‘If there’s no movement, it can focus on the detail. If someone is particularly animated you can lose the detail in the face. You get a slight blur.’
‘I think the corporate point of view is that the days of posting written press releases containing a few quotes are now a bit pedestrian,’ continues Watson. ‘If you can actually see and hear an executive articulating a message, it adds value.’
And yet there remain these quibbles as to whether the technology can cope. At Raw Communications, they believe they have found an answer. ‘We film a company’s presentation,’ says Mihalakis. ‘It then travels via satellite link to servers that sit behind the firewall at top institutions. And the end result is almost video quality. Its like watching television. It’s top quality because it’s delivered at 1.5 megahertz a second. It doesn’t take up any bandwidth on the internet. It’s essentially a private broadband network, there’s no buffering.’
Mihalakis concedes that this service shuts out the retail investor but believes that this is not a big deal. ‘It’s designed to make the fund manager – the big buyer, the one who makes all the decisions, the one who can make the share price fly up or fly down – interested and understand what’s on offer,’ he argues. ‘After all, if you’re a fund manager with 200-300 companies to look at, are you really going to go out and see them all on a daily basis? No. With this you can sit at your desk, drinking coffee, having a look when you want to. This is why fund managers really like the service. In general, the vast majority of fund managers will not be looking at webcasts, despite what webcasting companies will say.’
Mihalakis argues that that the current hype surrounding webcasting is misplaced. ‘People realise that webcasting is becoming almost best practice and that soon everyone will webcast,’ she says, ‘but people believe that it’s the answer to all the issues over disclosure and transparency. It’s not. Firewalls will stop people seeing it and if they don’t stop people seeing it, there’s the whole issue of whether people will find the webcast or how many hoops you’ll have to jump through to get it.’
‘You have to know that the webcast is on, then you have to find it and then the chances are you’ll have to register once you get there. And when you look at the standard of what you get when you get there, the average person isn’t going to bother.’
The key, then, is to eliminate the audience’s hoop-jumping and push the material out to them. With this in mind, Raw also provides RawInvestor.com, a service aimed at getting traditional webcasts out to the retail community. Mihalakis recommends alerting investors via e-mail that a webcast is going to take place. ‘It’s not the answer,’ he says, ‘but it does help to attract a certain group of people who are you shareholders or would-be shareholders.’
And, of course, there are other ways to spread the word. ‘We don’t just put webcasts up on company web sites,’ says CCBN’s Adler. ‘We have a deal with AOL and Motley Fool and they provide a link to them. That way you get greater visibility and you get attention from people who wouldn’t normally go to the IR sites.’
‘It is a question of aggregating all that information so people can get to it quickly,’ considers Ormondroyd. ‘If you don’t have stock in Whitbread, you’re not going to go to its Whitbread site. If you have a financial portal, where it’s all available that’ll help. We have an agreement with hemscott.net where we’ll be working together to create a large video and audio library.’
As Adler points out, ‘It’s about getting out there, not just getting round Regulation FD.’
