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Consumers slow to adopt video phones

As more companies offer video phone technology, the question remains whether consumers are ready to put themselves in front of a camera when they answer the phone.
/ Source: a href="" linktype="External" resizable="true" status="true" scrollbars="true">The Washington Post</a

George Jetson, his boy Elroy, Dick Tracy and Capt. James T. Kirk have used video phones for decades, calling people across the universe with unselfconscious ease.

But Americans have never embraced the technology which — far from being science-fiction fantasy — has been around since AT&T unveiled it at the 1964 World's Fair.

Internet communications company Skype Technologies SA yesterday joined a band of firms offering video phone service in the belief that people are finally ready to overcome the basic human fear of being seen on a bad hair day.

The company, bought by eBay Inc. in October, said it would give away software that will let people make video calls for free around the world as long as they — and those they call — have a computer, a fast Internet connection and a webcam.

For eBay, video may help auction sales by allowing sellers to communicate more directly with buyers and to better display their wares.

Skype is by no means alone in the market, though. America Online Inc., Microsoft Corp.'s MSN and Yahoo Inc. offer video calling through their instant messaging services. These, like Skype, require some measure of technical savvy to hook up webcams and install software.

Companies including 8x8 Inc., Motorola Inc. and Viseon Inc. are taking a different path by rolling out video phones that work more like appliances — with cameras, screens and microphones built into a unit that plugs into a broadband Internet connection.

The question — and analysts say it is wide open — is whether consumers bombarded with sound and images want to open their home to yet another screen and put themselves in front of a camera when they answer the phone.

"The classic example is somebody calls you and you just got up, your hair is in a mess and they can see you," said John Delaney, a principal analyst with London consulting company Ovum Ltd. "At the moment, you are talking to me and you have no idea what I am doing, and that might be a good thing."

During an interview, Delaney said he was working from his home office in Kent, England, and that he was not in his pajamas, "but I easily could be."

"It's quarter past four in the afternoon here, and I think pajamas would be considered a little louche," he said. "I am wearing a perfectly conservative sweater and slacks, thank you very much. "

Sheldon H. Hochheiser, a former AT&T historian, said the company's first video offering — Picturephone — failed for three key reasons: high cost, the chicken-and-egg problem of getting one when no one else has one, and a general reluctance of people to be seen when they talk on the phone.

Of the three issues, cost is the closest to being solved.

When it first offered Picturephone in Pittsburgh in 1970, Hochheiser said AT&T charged $160 a month to rent the unit, and customers had to pay 25 cents per minute after the first half-hour of calling.

Skype has teamed with Logitech International SA to sell "Skype-certified" webcams, most of which cost less than $100. Aside from this, calls are free with broadband Internet access.

Santa Clara, Calif.-based 8x8's Packet8 Broadband VideoPhone — introduced at $249 including rebates — now costs $149.99 for the unit, and a $19.95 monthly fee covers all video calls and unlimited local and long-distance voice calls in the United States and Canada.

Schaumburg, Ill.-based Motorola's Ojo video phone, which launched in May at $799, has fallen to $499 with rebates. Beyond that, consumers must pay a $14.95 monthly fee that covers unlimited video calling but does not provide regular Internet phone service.

For the Motorola and Packet8 devices, consumers may also need a router.

The chicken-and-egg problem remains, but industry analysts said declining prices and the spread of high-speed Internet access would gradually help overcome this.

Director Stanley Kubrick, in his 1968 film "2001: A Space Odyssey," hit on what industry analysts and officials say is the key market for the consumer video phone: people far from home who want to see their children and grandchildren.

Dr. Heywood R. Floyd, a character in the film who was killing time at a space station while changing flights to get to the moon, popped into a video payphone to talk to his young daughter whose birthday he will miss. The call cost just $1.70.

Jeff Wacker, the futurist at Plano, Tex.-based Electronic Data Systems Corp., said he thinks people will eventually get used to video calls, saying the growing availability of TV on cell phones may help smooth the way.

"We will have a lot of people who want to connect in a bigger way than just with voice," he said. "We have a lot of grandparents with the baby-boomer generation . . . you are going to find that as a driver, that just didn't exist as much in the 1970s."

The third problem — human nature — may be the hardest to solve.

Jonathan Hurd, a vice president with Boston-based consulting group Adventis Corp., fondly remembers trying AT&T's Picturephone when he visited the 1964 World's Fair as a 7-year-old.

"It will take off at some point, but we are still years away," Hurd said, saying one thing that would drive sales in the business market would be the desire to cut travel costs but maintain a personal connection.

He also said that new rules of etiquette would have to evolve and that people would have to adjust their phone behavior.

Hurd said he was leaning back in his chair and flipping a purple pen back and forth in a hand resting on his head during an interview.

"I would have a more alert pose if I were on a video connection," he said, laughing.