February, 2003
Video Chat - a Sticky Service for Independent Telcos?
by Ken Pyle
Despite the poor economy and the dour views of the venture capitalists in Menlo Park, technical innovation and product improvement continues. An example of this is www.watchnetcam.com, which took Microsoft’s NetMeeting and made it useful and easy to use. This service makes video conferencing as simple as instant messaging.
Using standard, low-cost web cams, a user is able to simultaneously see the person on the far-end, along with an equal sized image of herself. Familiar, online screen names are used as addresses. Audio is transmitted with the video. It supports other features, such as text chat and electronic whiteboards. Like the Conferserv technology, this is really simple to use for both the consumer, as well as easy to implement for the service provider. Watchnetcam will either provide this product as a service or will license the underlying technology to another operator.
Why would an independent telco be interested in this service?
Stickiness and greater DSL penetration - that is, this is the type of service that adds value to DSL and would make customers less likely to fall prey to a competing ISP. And text messaging has been one of the big differentiators for the larger ISPs, so it is likely that the combination of video with text and audio messaging will also be very popular long-term.
The beauty of this solution is the 95% of the customer base already has the Microsoft technology on their computers to run this service. Since this service runs as an applet in a browser, there is very little learning involved for customers as they just need to be familiar with a browser. From a back-office standpoint, operating this service is similar to what is required with a domain name server, so the computing and software requirements are minimal. There is complete logging capability, so the ISP has a very accurate measure of usage.
The early adopters for this type of service are most likely to be teens. Since teens are such influential members of the household, especially when it comes to Internet use, this is a good thing. Another, related application would be communicating to kids away at college.
I envision a self-reinforcing process, whereby a telco might offer a “web cam” for free for signing up for DSL service. Of course, as part of the installation, the service technician would connect the camera and show the customer how to use the service.
Because the video screens appear in a browser, it is conceivable that the telco could include advertisements in the blank portion of the browser window to add to the revenue stream. I am sure this is just one of the many ways a telco could create new revenue generating sources from this simple to use service.
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