The Past, Present, and Future of Video Telecommunication or, The 3% Solution

2. The Past, Present, and Future of Video Telecommunicationor,The 3% Solution Dave Lindbergh IMTC Fall Forum November 2008

3. Contents • Hooke Labs & how we use video • Past • How we got to this point • Present • Successful niches for video • Why no mass-market adoption of video? • False reasons • User expectations  Correct reasons (my opinion) • Future • How to succeed: The 3% Solution

4. Thesis • Video telecom is in < 1% of conference rooms • ~ 0% of homes • Mass acceptance has never occurred • Despite huge consumer enthusiasm for video • Despite good solutions to traditional problems • Because the quality of experience falls short • The “sense of being there” is disappointing • This will change • Telepresence market is the lever • Gradual improvements will lead to the mass-market

5. Hooke’s use of video

6. Hooke Laboratories • Start-up biotech CRO & manufacturer • Typical CRO contract $5000 to $50,000 • Customers all over the world • USA, Canada • Europe • Asia • South America

7. Hooke is well-equipped for video • Co-founder w/14 years in video conferencing • Broadband Internet connection • Skype + webcams • Polycom VSX 7000 (H.323, SIP, H.320)

8. How often does Hooke use video? • Never • Not once • Why not? And what can be done about that? • That is what this talk is about

9. How we got here

10. Video telephony system • 18 frames/second • Progressive scan • Plasma display • Pixel aspect ratio 3:2 • Image quality described as “excellent” • End-to-end latency 1 millisecond (great!)

11. 7 April 1927 – Bell Labs

12. New York – Washington DC Walter Gifford Herbert Hoover President, AT&T US Sec’y of Commerce New York Washington DC

13. “Television” = Telephone + Vision • 50x50 pixel display, neon bulbs • Camera: Arc lamp beam, mechanical scanning • Optional projection to 2x3 feet • But “results were not so good” Edna Mae Horner Operator Chesapeake and Potomac Telephone Company

14. AT&T Picturephone 1957 “Experimental Model”

15. Early 1960s Mirror

16. AT&T was very serious • Plenty of smart business people! 1964

17. Framing

18. AT&T was not alone Lots of investment, market research, usability studies… NTT, 1968 Philips, 1974

19. AT&T quietly gave up in the early 1970s • Did it “cost too much”?

20. 1980s – Still image picture phones • Mid-1980s: Japanese consumer electronic firms introduced still-image picture phones • Used existing regular analog phone line • POTS modem • ~ 5 seconds to send 1 black & white frame • No audio during picture transmission • ~$200 each • Very few takers

21. 1992 – AT&T Videophone 2500 • “Predicting that 10 years from now video phones will be as popular as cordless phones and fax machines, last week AT&T introduced the first full-color motion video phone that operates over regular phone lines…” • Newsweek, January 20, 1992 • 10 frames/second, $1500 • Marconi, others, had similar products

22. Many more videophones since then • They all worked • Their makers all expected commercial success • And why not? • Consumers are consistently excited at the idea of video telecommunication Siemens T-View (H.320 ISDN) ~ 1997

23. Maybe the technology wasn’t ready • Too expensive • Poor video quality • Not enough bandwidth • Maybe the time is finally right • Maybe your company is thinking about introducing a video phone • Maybe you think now is the time • If so…

24. …you are not alone

25. Others have thought so, too

26. Really, more than you might think

27. ...a lot more

28. …and more…

29. …and more.

30. Today: • Video phones are in every home and every office • Well, no • Why not???

31. People want video communication • Witness all the attempts • Just talk to potential users – lots of excitement • But they don’t buy or use video when offered • Except for narrow niche applications • For some reason people are disappointed • We need to understand why before we can fix this

32. Progress so far

33. A successful, but small, industry • Video conferencing • ~$2B/year (generously) • Doesn’t seem to be growing much • Telepresence • ~$100M/year(?), growing fast • Expense limits market size (Wainhouse says < $1B)

34. Video telecommunication today • Video conferencing offered since mid-1980s • More than 20 years • More successful than video phones • Why? • High-value application • Relatively big picture, high resolution • Less restriction on where people are in the frame • More “like being there” than video phones • At work – people are paid to use it • But…

35. After 20+ years, video is in < 1% of conference rooms Lots of room for growth  Similar problems as stopped video telephony  Source: http://www.emarketer.com/Article.aspx?id=1006610 October 14, 2008

36. People want visual communicationSo – Why?

37. Challenges today – are these the problem? • Connectivity issues • Incompatible protocols & standards • NATs and firewalls • Network fragmentation • IP, ISDN, POTS, 3G, 4G… • No public/automatic gateways and bridges • Too much latency • And lots of denial about it; doesn’t help

38. Videophones didn’t have connectivity problems (mostly) • Early videophones solved connectivity • Offered & operated by carriers • Simple analog devices • Many videophones were utterly reliable • POTS models used voice network (w/modems) • Reliability was not the problem • Connectivity was not the problem

39. Why no mass adoption – is it cost? • AT&T spent $billions – lots of market research • Best and brightest people in the world • They were sure it would sell • Many free services: PC + $15 webcam • Skype, AIM, Yahoo, MS Messenger, NetMeeting… • Many video phones were/are offered by carriers with subsidies • Phones under $300 common • Same usage fees as voice calls • Probably not cost

40. Is it ease of use? • AT&T Picturephone was a telephone • Pick up phone, dial number • Most videophones are equally easy to use • Probably not ease of use

41. Is it video quality? Latency? • Many products have very good video quality • Even bad pictures look good on small displays • 1960s analog phones had good quality • Modern VC systems have excellent video quality, large displays, but still haven’t enjoyed mass adoption • Phones of the 1960s and 1970s were analog • No extra latency • Probably not these, either • All these things are very important – necessary • But they don’t seem to be sufficient

42. The mass adoption barrier • Video conferencing is a successful niche • But very far from mass adoption (< 1%) • Video telephony hasn’t succeeded yet • Yet, clearly there is a market desire! • Current issues do not explain past failures • Standards, connectivity were solved for videophones • Latency was not a problem in the analog world • Then what is required for success? • Why have users not yet embraced video telephony?

43. Fiction creates expectations Metropolis (Fritz Lang, 1926)

44. Fiction reflects expectations • Where are the cameras? • This is impossible with today’s video • But it is expected The Jetsons (Hanna-Barbera, 1962) The Jetsons (Hanna-Barbera, 1962)

45. Perfect framing, perfect lighting Star Trek (Paramount, 1967)

46. Nobody is nervous “on camera” • Actors look straight into the camera • Professional cinematography / videography • Multiple camera positions & zooms • Directors choose the best shots 2001: A Space Odyssey (Stanley Kubrick, 1968)

47. Real video is not like fictional video

48. What will it take for mass adoption? • More than just: • Cost • Latency • Reliability • Connectivity • Resolution • Picture size • Ease of use • These are all necessary, but not sufficient

49. What is the problem, then?

50. Quality of Experience • The “sense of being there” is disappointing • At least, weaker than people expect & want • VC is not enough like being in the same place • Eye contact • Peripheral vision • Depth perception • Awareness of framing • Perceived distance to other people • Ability to interrupt • Certainly other things, too