WEBCASTING, WHICH ONCE PROMISED TO TRANSFORM THE WORLD OF BUSINESS, IS MAKING A COMEBACK BY SETTLING FOR NICHE MARKETS.
Kevin Cronin's job title, "webcast producer," sounds almost anachronistic. Didn't webcasting evaporate with the dot-com boom? Didn't those early Internet-era dreams of "entertainment portals" (iCast, Pop.com, and others) collapse for lack of traffic, bandwidth, and interest? Well, yes they did. In fact, the golden age of Internet webcasts lasted exactly one hour, on that post-Super Bowl day in 1999 when a much-hyped Victoria's Secret webcast attracted more than a million viewers, enough to crash the Internet provider's servers. That event, and rapidly advancing Internet video technology, augured a bright future for the webcasting. It never happened. Or did it?
Three years later, webcasting appears to be making a comeback as a niche medium. ITWorld in Southborough, where Kevin Cronin works, is producing dozens of webcasts a year for blue-chip technology clients like IBM and Microsoft. Yahoo's broadcast division has created webcasts for corporations like Ford and Cisco. And Boston-based CCBN, the Corporate Communications Broadcast Network, is streaming literally thousands of earnings reports every quarter. Brainshark, in Burlington, also has a webcasting service that combines voice and business graphics.
In this respect, webcasting is like other technologies from the early days of the World Wide Web that started off with grand ambitions but have now settled for niche markets. Some of the high-flying concepts that fueled the Internet boom are now serving more humble ends. Webcasting, virtual reality, and instant messaging once promised to transform commerce and disrupt business models. Now they're powering the CEO pep talks, displaying condos for sale, and distracting teenagers during "Buffy the Vampire Slayer."
Significantly, although Victoria's Secret has recently moved its annual fashion show to network television, its parent company, Intimate Brands, now uses webcasts to report financial updates to the investor community. Paul Ritter, an analyst at the Yankee Group, a Boston-based consulting firm, recently completed a research report on business-related webcasting. He was impressed with the promise of the technology as a narrowly focused medium, predicting that business-related webcasting will experience "triple-digit growth during the next two years."
"Today, webcasting is all about business communication rather than entertainment," he said. One of the major drivers of this growth, said Ritter, is cost savings. "Many companies were using satellite systems to communicate with their offices and divisions," he said. "Webcasting is 80 to 90 percent cheaper than satellite." Webcasting is also less expensive than VHS tapes and CD-ROMs, Ritter points out, and it's easy to update. "When you have new information, you have to scrap the VHS tapes and send out an entirely new batch," Ritter said. "With webcasting, you just update the file on your server, and viewers will automatically get the most updated version."
Also important, according to Ritter, is the ability of businesses to accurately track and measure the viewership of webcasts. "It's very easy to determine, with a webcast, who's watching it, what they are watching, and how long they are watching it," Ritter said. "That's extremely valuable information to companies and marketers."
The elements that comprise a typical webcast vary from company to company. Some consist of Powerpoint-type slides with an audio soundtrack; others combine a video-style feed with multiple windows stuffed with navigational options and additional information. At ITWorld's production studio last week, webcast producer Kevin Cronin was using a sophisticated Avid digital editing system to assemble a 36-minute webcast on a new "middleware" product from Microsoft's New Business Solutions Group. Cronin was creating a multiframe package that included a variety of elements: a video stream that explained the product, a navigable transcript and agenda, Powerpoint-style slides synchronized to the video, a clickable list of Web-based resources, and a search box.
The content was technically dense, but that was by design. "If we get between 500 and 3,000 people, we'll be in good shape," Cronin said as he sat in front of a bank of blinking encoders, routers, and compressors. "As long as the viewers are enterprise IT professionals, specifically BDMs and TOMs business decision makers and technical decision makers - Microsoft will be happy." "Webcasts are the absolute polar opposite of a Super Bowl broadcast," added William Reinstein, president and CEO of ITWorld, a wholly owned subsidiary of IDG, the Boston-based technology media company. "We are the ultimate in narrowcasting. And we track our viewers very carefully, because lead generation is a key part of our business."
The cost of a webcast, which ranges between $30,000 and $100,000, is worth it for companies selling software products with licensing fees that often approach a million dollars.
"A few hundred, or a few thousand, qualified leads is a major win for one of our webcasts," he added. CCBN, based in South Boston, aims its webcasts at a different target. The company, which also has offices in London and San Francisco, specializes in financial webcasts, primarily quarterly earnings calls and analyst meetings. Although it's been in business for four years, CCBN's webcast business has been booming since October 2000. That's when the Securities and Exchange Commission's "Full Disclosure" regulation (often referred to as "Reg FD") went into effect. Reg FD prohibits companies from giving information only to selected analysts; the same information must now be provided to the public at large via the media. It didn't take long for the investor relations community to discover that webcasts were the most economical way to satisfy the requirement. "Reg FD was a huge boost to the webcasting industry," said Andrew Davis, senior partner at Wainhouse Research, a Brookline consulting firm that specializes in visual collaboration and rich media communications.
Shawn Dornan, manager of streaming media services at CCBN, reports that the company produced no less than 3,800 webcasts in the last quarter of 2001, and it's on track to top that number this quarter. Although CCBN is capable of delivering video we beasts , most of their customers request audio-only we beasts , or audio with accompanying slides. "It's a cost-benefit decision," Dornan said. "Most companies want to make the information available to analysts and investors in the most economical way possible. Adding a video stream adds thousands of dollars to the cost." Webcasters are also the beneficiaries of recent developments on the viewer's side of the equation, where Microsoft, RealNetworks and Apple are competing to become the default media player. All three companies aggressively distribute their media players, for free, via the Internet. Microsoft bundles its player, Windows Media Player, with its operating system. The result is that the percentage of Internet-connected computers with a streaming media player is "in the high nineties," according to Jim Lewandowski, the vice president of Enterprise Solutions for Yahoo, which has a webcasting division based in Houston.
Lewandowski also points out that webcasters now use sophisticated software that automatically determines a user's bandwidth and default viewer and customizes the webcast accordingly. "You really don't have to be sophisticated to view a webcast today," he said. "Two years ago, we thought the technology was a big part of webcasting, but now we've come full circle: We can work with whatever is on your desktop." Although Yahoo maintains a webcasting portal at its Yahoo Broadcast site, which incorporates its July 1999 purchase of Broadcast.com, Lewandowski says the company is counting on business-oriented webcasts to provide a major part of webcasting revenue in 2002. Already, Yahoo produces webcasts for marketing launches, sales training, and internal corporate communications.
Yahoo is also chasing some of the financial business that CCBN serves: earning reports and analyst meetings. And although Yahoo hasn't made significant inroads into CCBN's market, Lewandowski claims to be happy to see webcasting catch on with that sector. "We're at the point now where virtually every major corporate executive has participated in an webcast earnings call, or an analyst meeting," he said. "That makes webcasting a top-down phenomenon," he added. "And that can only be good for webcasting." D.C. Denison can be reached bye-mail firstname.lastname@example.org.
Author(s): D.C. Denison, Globe Staff Date: February 4,2002 - Page: D5 Section: Business © Copyright 2001 Globe Newspaper Company