Modulating the Videoconferencing Hype

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That was fast: As travelers trickled back into the skies, the widespread expectations of a videoconferencing bonanza faded along with the realization that we're not ready to substitute virtual connections for pressing real flesh.

Shares in teleconferencing companies, which had jumped by up to 50 percent while Wall Street floundered, quickly leveled off — supported, in part, by consolidation among the sector's biggest suppliers: Polycom Inc., PictureTel Corp. and ACT Teleconferencing Inc.

Yet videoconferencing still retains its appeal. The challenge now is to figure out how to blend its capabilities into a new operational mindset. Just because some of us are once again winging to meetings and sales calls doesn't mean that the videoconferencing bravado was a short-lived dream.

Amid the frenzy, some forecasters envision that the videoconferencing market will balloon from its current $2 billion annual range to almost $8 billion by 2006.

Admittedly, videoconferencing has rarely measured up to its hype. As a result of countless false starts — usually triggered by events such as an energy crunch, economic crisis or simply bad weather — the industry has lumbered along as an option for training, job interviewing and some sales presentations.

Inadequate technology — especially the herky-jerky video and unsynchronized audio — dulled the appeal of many videoconferencing efforts, although recent improvements have made the experience more tolerable.

More significantly, business executives — especially those with access to the corporate jet — don't like to trade personal connections for virtual relationships.

I encountered that more than two decades ago, when I set up a seven-city videoconference in lieu of quarterly meeting that required regional general managers to fly to New York. Participants agreed that the three-hour videoconference achieved more than three days around a big table at corporate headquarters. Key staffers in each location sat in on the videoconference, thus saving another day of follow-up debriefings.

Did the general managers want to do it again next time? No. The in-person schmooze sessions and expense-account meals won out then. Those executives, like other business travelers today, want to see customers and colleagues, touch products and riff beyond the limits of a 35-inch monitor or video wall.

That's still true, although today's economic barriers, which include bans on corporate travel, may push more organizations toward videoconferencing. Certainly the production infrastructure is in place. During the first few weeks after the Sept. 11 attacks, sales of videoconferencing equipment mushroomed. Organizations are now looking for ways to use their newly acquired hardware and software.

That should be where broadband providers step in.

The search for value creates a vast opportunity for the broadband industry, a sector that's constantly being asked to justify its existence. One of the lingering problems of the videoconferencing business has been its reliance on satellite delivery or ISDN distribution — old technology that was responsible for the low-quality video. Broadband networks solve that problem, and — quid pro quo — enable the extension of videoconferencing capabilities into other applications, such as telecommuting and distance learning.

Add in affordable access devices, and videoconferencing via Internet-protocol transmission can function as more than a mere substitute for plane tickets.

IP also encourages the use of desktop videoconferencing, rather than relying on a dedicated video meeting room. Also, it eases the integration of rich-media presentations (such as PowerPoint pitches), a vital ingredient in many meetings today.

The International Telecommunications Union's new H.323 standard for IP videoconferencing further boosts this approach, although it means that conventional systems might have to be adapted or abandoned. That's another opportunity for the broadband industry to stake its claim in shaping the new videoconferencing environment, tailored to the capabilities of its bandwidth and infrastructure.

To establish itself successfully, videoconferencing will also have to extend beyond the boardroom onto the desktop and set-top. We saw some proof of that concept at RealNetworks Inc.'s conference and trade show in Seattle in late September. Only about 650 people showed up at the convention hall, but 2,000 attendees from 45 countries tuned into the three-day event.

The streaming channel was cobbled together and promoted in about 10 days. Using its own streaming-media technology, RealNetworks delivered the entire program to users' desktops. Exhibit areas were shown as video walkthroughs, narrated via audio interviews with vendors.

Remote attendees couldn't pick up the tchotchkes or sample the software personally, but they only paid $199 — a fraction of the cost for travel to Seattle during that turbulent week. As further evidence of the multimedia structure of the event, about 20 percent of speakers were piped in as "virtual" participants.

Videoconferencing and virtual trade shows need more than an occasional success story, though. Ongoing applications and perceived value are key to this equation. Susan Irwin, a Washington communications consultant, points out that Merrill Lynch & Co.'s satellite videoconferencing system, installed in the mid-1980s, "paid for itself" on Black Monday in October 1987.

Merrill's executives and analysts rushed on camera to assuage fears at local brokerages and client offices around the country. That experience also gave the firm — and subsequently, many of its Wall Street financial-industry colleagues — a head start in using video for a variety of communications applications.

In the new era of travel now underway, videoconferencing will find a role, albeit not one that's as vast as optimists envision. Its scope — and that of allied video services — will depend, in large part, on how broadband providers embrace it — and let it fly.

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