Innovation is never a question of if, but when. Web-casting adoption levels among FTSE 100 companies may not have budged since they first peaked at 90 percent in 2003, but there are already major shifts taking place in the way large companies and investor audiences use this technology that are setting the stage for future development and usage.
The ‘2005 survey of webcast usage among FTSE 100 companies’ from CTN Communications, developed in association with IR magazine, examines how IROs at Britain’s 100 largest companies are using webcasting and allocates points to each firm for usability, technology, production and innovation.
The results show a select group of top companies have broken away from the pack and rank highest in the survey. The index leader was Vodafone, followed closely by Reuters, while BAA, Diageo and J Sainsbury took joint-third place. O2 (formerly mmO2) and GlaxoSmithKline tied at fourth, while BP came fifth. All these companies demonstrate the most consistent approach to quality, with multiple event coverage and enhanced interactive features in their audio and video streaming. However, the study also shows the same level of thought is not behind the webcasting efforts of the majority of FTSE companies. So what is going on?
Comfort zone blues
‘The problem is that most companies have embraced this medium purely from a compliance and transparency perspective,’ explains Kai Duggal, business development manager at CTN Communications and author of this year’s survey. ‘They think it’s all about volume and not about quality and most of them still don’t understand what their aim is when they do it.’
Only a few FTSE 100 companies make effective use of this technology – with some smaller caps punching well above their weight – while most have found an entry-level comfort zone they are reluctant to leave. Because webcasting has become central to corporate communications, the challenge, says Duggal, is to realize the medium’s full impact and position it within a wider, long-term communications strategy.
The reluctance to fully explore webcasting’s potential is reflected in the low survey marks received for innovation. While a select group of forward-thinking companies is increasingly offering enhanced features such as search engine capabilities, subtitling, specific moment locators and different download speeds, the willingness to explore new technologies, like Flash MX for audio and video, or streaming to mobile phones, is almost non-existent.
‘Right now the technology is starting to develop in the direction of streaming to phones or other mobile devices,’ explains Duggal, who believes this will be the next big trend. ‘But what this is really about is companies tailoring their webcasting information specifically for this kind of streaming. The problem is that no matter how good the technology is, people are not going to watch 40 minutes of a webcast on their mobiles in the same way they’d watch it on a desktop PC.’
A wider net
Where companies are being adventurous is in responding to communications challenges in a more flexible way by`using webcasting for different types of events. A record twelve companies streamed their annual shareholder meeting this year on demand.
‘This follows a similar pattern to results announcements some years back,’ says Duggal. ‘People used to say, Oh, we can’t do that online – what if our board says something inappropriate? But now they are much more comfortable with it.’
Companies running more sophisticated online IR efforts are also using webcasting to communicate on emerging disclosure challenges such as international financial reporting standards (IFRS) and the operating and financial review (OFR). Indeed, 14 of the companies surveyed already offer some form of archived webcast about how they expect their numbers to change under IFRS.
Other events attracting live webcasting coverage are earnings announcements, interviews with senior management, industry seminars and product launches for the investment community. Surprisingly, more than 80 percent of IROs questioned say they aim to communicate mainly with institutional investors – not retail shareholders – through webcasting.
However, as companies become more familiar with this technology they are also becoming more demanding clients. For 60 percent of the IROs interviewed, the quality of production is the most important aspect of the webcast, so the project management skills of the webcast provider are rated more highly than the cost of the service.
But it’s not only companies that are feeling more comfortable with the daily use of webcasting – everybody is. Those firms surveyed estimate that, on average, anywhere between 50 and 300 people participate in their live webcasts, confirming that the number logging on to live streaming sessions over the internet is finally beginning to outnumber those attending events in person.
For more details of the ‘2005 survey of webcast usage among FTSE 100 companies’, please contact Kai Duggal at +44 (0)20 7395 4460 or e-mail [email protected].
What are FTSE 100 companies webcasting?
Year-end results 79
Half year results 75
Quarterlies (Q1 or Q3) 17
Executive interviews 21
Annual general meeting 12
Investor days/site visits 24
Roundtable analyst briefings 1
Seminars 29
Special announcement 14
Special events (eg IFRS) 14
Source: CTN
Survey results overview
Highest quality index scorer – Vodafone 57%
Lowest quality scorer – British Airways 18%
FTSE 100 companies webcasting – 90
FTSE 100 webcasting quality index average – 36%
No. of companies scoring zero for innovation – 56
Sector with largest volume of webcasts – Banking
Sector with highest average in quality webcasting – Telecommunications
Source: CTN
