Are we ready for the video phone?

Not going to do it. Nope, we won’t issue a prediction about this year or any other being the year that the video call finally becomes popular and prominent. We’ve been hearing that video calls are right around the corner since we were little kids, and that’s not too recently. So far all of these predictions have fallen flat.

Having said that, however, we’ve been using desktop videoconferencing software for years and years. It’s something that really helps bring together our virtually organized and geographically spread-out organization. With two of us on opposite coasts, getting a videoconference going along with some online collaboration software can really help us get through tough projects.

But like most people, we’re doing this on our own using either peer-to-peer software or with an account through a third-party conferencing provider. What we’re not doing is going to our broadband service provider and getting service from them. In fact – though we don’t have hard stats – our conversations with folks in the industry lead us to believe that very few conferencing users are.

And that’s too bad for the service providers and for us because we’re both missing out on something.  Service providers are, of course, once again being separated from a potential revenue-generating service. But we’re missing benefits, too, because we aren’t getting QoS guarantees, bandwidth boosts (turbo buttons), unified billing or any of the niceties a broadband provider could wrap around such a service.

We’ve been thinking about this since a recent conversation with the folks at VidiTel, one of the providers we use. VidiTel has been making a big push into the service provider market, providing hosted video conferencing and collaboration services.

VidiTel’s business model revolves around offering providers a low-impact, low-cost way of implementing the service, since everything is fully hosted in VidiTel’s data centers. The VidiTel-based service can be service provider-branded, and provides some real functional differences compared to freebie videoconferencing apps, including 128 bit Secure Sockets Layer encryption, true multipoint/multiparty conferencing, app sharing and collaboration.

More importantly to a small and virtual business like ours is the ease-of-use. The system provides network address translation and firewall traversal without any special configuration or need to involve your IT staff. We especially like that last feature. Users are identified simply by their e-mail addresses so there’s no need to know IP addresses or host names or special addressing schemes.

For the service provider, a video conferencing service does more than just add another value-add to the a la carte service menu, though that’s not a bad thing all by itself.  Video services add a new angle to voice services, too – and though it seems almost impossible at this point in time, voice services are becoming more and more commoditized every day. Adding a videoconferencing service to the overall data/video/voice package helps a provider stay one step ahead of the downward revenue slide, and provides them with a way to differentiate, something that becomes harder to do every day.

Having said all that, such services face one formidable issue: competitors that are free. Anyone can download AOL/MSN/Yahoo! Messenger and do some video conferencing over their broadband connections without the outlay of one additional penny per month. That’s a tough bit of competition to face for any service.

For the casual consumer user of videoconferencing, the answer is that there’s probably very little chance of a provider successfully marketing a for-pay videoconference service. On the other hand, physically distributed businesses will probably appreciate the security and performance benefits of a videoconferencing service – and may even find some costs savings using a flat rate videoconferencing service instead of the telephone for internal uses.

In between these two extremes is where the providers will need to flex their marketing muscles, finding, for example, pricing plans and service enhancements that entice users to a paid service and away from free alternatives. For example, perhaps the service could be bundled with a higher speed tier of service or with the use of a turbo button.

The bottom line is this: video collaboration/conferencing has quietly become real despite nearly 40 years of punditry announcing its imminent arrival. Service providers who are watching their voice customers move over to Vonage or CallVantage should be thinking not only how to keep these customers on their voice networks, but also how to keep them “on-net” for the next step in communications services.