Though online video is currently enjoying a heyday as a way of engaging with investors, companies have yet to settle on a format that works as well as traditional communications or face-to-face meetings. Some might provide recordings of earnings calls or roadshow dates, while others use the format to show footage of factories or offices, providing extra financial color to their IR.
At German utilities company RWE, meanwhile, videos are used to provide short and current content that explains earnings, recent business performance or current affairs. Dr Stephan Lowis, RWE’s head of investor relations, explains that the format is an extension to, rather than a replacement of, existing documentation.
‘We have enough disclosed information – maybe even an overflow of it – and produce reports, quarterly updates, factbooks,’ he says. ‘The thing we have to think about is a different format to get RWE’s messages across. The information is there already but if people are bombarded they might not get the main or core message. Video is a powerful tool to give investors the right information, the information they need.’
Peter Terium, CEO of RWE, updates investors in one of the German firm’s online videos
A quick check with RWE’s clients – investors and analysts included – was enough to confirm they were interested in seeing the quick ‘catch-up’ videos, Lowis continues.
Foremost among the videos he and his team produce are quarterly reviews with either CEO Peter Terium or CFO Dr Bernhard Günther, while others involve experts in particular fields and include a 60-second ‘elevator pitch’ with Lowis explaining why viewers should invest in the company.
‘The next video that will be on the site is with the head of our regulated German business, which is very important for our clients as one of the company’s biggest profit contributors,’ Lowis says. ‘I’m also planning another with the CEO of our trading business, because one of the hot topics at the moment is German electricity prices.’
Though the videos are not intended to ever replace more traditional ways of bringing across RWE’s investment story, there are numerous advantages for investors and analysts. ‘The most attractive thing about the video blog is that you can bring across important messages in a powerful way, and people will remember them,’ Lowis points out. ‘If someone doesn’t know us and our story to start with, in roughly 80 seconds he or she can find out exactly why he/she needs to buy our shares.’
Shorter clips also mean the videos can be produced in next to no time – around 15-30 minutes, Lowis estimates – and require very little equipment to make. ‘It needs to be good quality but nobody expects you to make a TV show,’ he says. ‘You don’t want it to be too glossy because people will worry that it’s too staged, or that the production is inflated. And ours have to engage with a hot topic, otherwise they’re too stale by the time viewers see them.’
As one of the only companies currently using video in this manner, Lowis believes the practice will become a standard feature of IR websites within the next year, just as it has done elsewhere in the investment community. ‘The sell side is doing more and increasingly using videos now, too,’ he notes. ‘Some banks are already starting little services where they package their main information in short videos.’ And on the whole, feedback has been overwhelmingly positive. ‘Our feeling is that these videos are working really well,’ Lowis summarizes.
