Finally, the Videophone : Communications Era Dawns but Is Anyone Watching?

It didn’t take long for Jerry Ganz to figure out how to get the most from his new $1,000 picture telephone: He bought seven more of the “see-and-say” gadgets and passed them out to his children and grandchildren.

After all, the retired Marin County investor realized, what’s the point of owning such a pricey phone if the people you talk with often don’t have one too?

The Ganz family is better off than most consumers who have bought into American Telephone & Telegraph’s second attempt in 25 years to bring home the picture phone. With only an estimated 4,000 of these devices sold in the last six months--usually in pairs--most users have just one other person with whom to share the picture-phone experience.

The concept of visual communications, combining the immediacy of a phone call with the panorama of a home camcorder, has been around since the dawn of the television age. About 70 years ago, AT&T; originally saw the home TV as an accessory to the telephone: the video screen for Ma Bell’s audio lines. Ever since, the nation’s largest phone company has been trying to make that vision come true.

But AT&T; and other communications companies have something grander in mind for tomorrow’s picture phones than just allowing two “talking heads” to carry on a conversation. Already, they are pushing ahead with ambitious plans to connect our telephones to high-speed video networks and powerful personal computers to bring a vast array of new entertainment, services and advertising into the home.

“The picture phone is a build-up to a range of on-screen communications,” says Robert Kraut, director of interpersonal communications studies at Bellcore, the research arm for the regional Bell phone companies. “We won’t just be looking at people. We’ll be watching advertisements and films, making purchases from video catalogues and tapping into the computers that manage our bank accounts and stock portfolios.”

Although sales of AT&T;’s new picture phone have been painfully slow, a raft of telecommunications companies are betting that this is all about to change. Why now? For one thing, the exploding use of video in corporate America has made many more people familiar with the idea of visual communication. New technology that turns an office computer into a desktop picture phone is just now hitting the market. And a new generation of video-savvy consumers weaned on television, home movies and Nintendo will be a prime target for electronic gizmos that satisfy visual appetites.

“We weren’t the video society in 1964”--when AT&T; unveiled its first picture phone at the New York World’s Fair--”that we are today,” says James Keating, Pacific Bell’s vice president for video communication services. “As people get used to this equipment at work, they will want it in their homes.”

But that’s far from a foregone conclusion. Market acceptance has been so painfully slow that a second rejection of the picture phone seems a foregone conclusion to many. AT&T; “never learned the lesson from the first bomb,” says Michael Noll, a professor at USC’s Annenberg School of Communications. “People don’t necessarily want to be seen while they’re talking on the phone--especially at home.”

Furthermore, several studies--including some conducted for telephone companies--have shown that seeing the person on the other end of a phone call doesn’t necessarily improve the quality of the conversation. According to this conclusion, drawn over the last 20 years of research, visual contact is unnecessary--and often an obstacle--in calls where the primary motive is sharing information.

Nevertheless, the promise of visual communications has picked up enormous momentum in the last two years, the result, in part, of the recession’s chilling effects on corporate travel budgets and marked improvements in technology.

The effects are being seen first in the demand for video conferencing equipment by businesses.

Because it relies on existing copper telephone lines and still-evolving software, today’s video conferencing technology is rudimentary compared to its future promise, supporters say. For example, on today’s most sophisticated systems, the video and audio are somewhat out of sync, giving the conversation an unnatural quality.

Advances in computer, television and telephone technologies, however, should improve the systems’ sound and picture quality. More built-in computer power should allow users to manipulate the images, such as pictures, graphs and maps, they are sharing over the videophones.

Despite today’s limitations, sales of conferencing equipment--including video cameras and the sophisticated gear that compresses a video signal to fit over ordinary telephone wires--reached an estimated $300 million in 1992. This year sales should exceed $500 million, according to Telespan, an Altadena, Calif.-based market research firm.

Although travel expense savings initially fueled equipment sales, even more important, say executives who use them, is the time saved by holding video meetings.

“It’s simple for us to have a two-hour status session with people all over the United States and walk back to our offices and get back to our work,” says Kevin Kean, a product manager at Tandem Computer in Silicon Valley. “The time we don’t spend sitting in airplanes and airport waiting rooms is time we can spend making money.”

The nation’s legal system, where much can hang on nuance, presentation and behavior, has been among the first groups to take advantage of video conferencing.

Uses include deposition taking, suspect arraignments, conversations with lawyers and family jail visits, where direct face-to-face meetings pose a security risk.

Other industries that have been quick to embrace video conferencing are those with a need to exchange blueprints, technical drawings and maps.

Despite its apparent simplicity, video conversation demands more structure and discipline from its participants than face-to-face sessions or audio-only exchanges. And, for some, the medium can interfere with the message.

For example, the technology imposes a bit of a dress code.

Because ordinary phone lines cannot transmit the 90 million bits of information per second that a video signal carries, today’s video conferencing systems can’t carry a television-quality picture. The upshot: no stripes, plaids, loud colors or busy prints which impose an extra load on the equipment.

Behavior at meetings is also changed by the presence of the camera. Even the best video conferencing equipment is stymied when a speaker is interrupted by extraneous sounds, such as uncontrolled outbursts and side conversations. Fidgeting and excessive movement by participants can also overload the system.

“There are protocols and techniques for using this technology successfully,” says Virginia A. Ostendorf, a Denver-area video conferencing consultant and publisher.

And people will probably adapt to the technology as successive generations of videophones usher sweeping changes into our homes and offices. New rules of etiquette and privacy laws will be demanded as geography ceases to be a barrier to “face-to-face” communication. New work arrangements will evolve as the technology increasingly allows people to collaborate from their homes as though they were sitting side-by-side.

It is already happening. One-on-one video conferencing via personal computers is about to burst out of the research laboratories and into the commercial marketplace.

These systems use phone lines or computer cables to link personal computers equipped with three-inch to six-inch high video cameras mounted atop their screens.

With special software, users can work on one document simultaneously as well as see their collaborators in a two-inch-square window in the upper right hand corner of their screens. Rather than use a phone handset, they can talk straight at the little inset box on the computer screen. The first of these systems, developed jointly by International Business Machines and video conferencing leader Picture Tel, were unveiled a few months ago and are now being tested by a handful of business customers. Many other personal computer and software companies are expected to begin rolling out rival versions later this year.

While potential buyers evaluate the equipment, engineers at Bellcore are testing a much more sophisticated system. Dubbed “Cruiser,” the system provides sophisticated video calling powers for up to 140 people.

Want to see whether it’s a good time to call the boss about a problem, or whether two arch-rivals are plotting behind your back? The computer maintains a gallery of pictures taken by the computer-mounted video cameras in every office. Shots are updated every five minutes. (Workers not wishing to take calls, video or otherwise, simply post an electronic “do not disturb” notice on the network and their calls are automatically routed to a message center.)

From your own office, you can use your desktop personal computer to check what’s happening in a colleague’s office without being noticed. If the timing looks right, you call a colleague by simply “clicking” on her picture on your computer screen; there are no numbers to remember or codes to dial.

Workers sharing a project often maintain an open videophone line between their offices to simulate working side-by-side. Instead of poking their heads into the next office or standing up and leaning over partitions separating their desks, these workers can simply start talking at their computers.

In other cases, workers can plug into a simulated auditorium for conference calls or training sessions. Rather than sitting next to a friend, colleagues maintain a separate open line between each other and carry on side conversations, unheard by others, during the group meeting.

“People are having conversations they would never have had otherwise,” says Robert Fish, an engineer in the multimedia research group and one of those experimenting with Cruiser. “People readily take to talking to people’s images on their screens. . . . We won’t go back to not having it.”

While Bellcore’s engineers may have readily taken to talking at computer screens and whispering asides to video images of their colleagues, ordinary consumers have not responded similarly.

One big reason: price.

Only months after its new picture phone went on sale, demand was so soft that AT&T; was forced to slash the price by one-third, to $999 from $1,500. Even so, most customers spend about $2,000 for a picture phone system, since having just a single phone isn’t of much use. Another important reason is that these machines can do little beyond transmitting images of talking heads.

Using the phone just to transmit a picture is not an entirely satisfactory experience for some. The picture consists of a grainy, snapshot-size moving image of the person at the other end of the line. The motion appears jerky and erratic compared to TV pictures.

And despite the novelty of seeing the person on the other end of the line, some consumers report that they are not comfortable showing themselves to just anyone. Steven Landau, an Ann Arbor, Mich., physician, bought picture phones for himself and his parents in Glendale so his three children could keep in close touch with their grandparents. While Landau admits feeling self-conscious and a little tongue-tied when on camera, he says he knows his appearance doesn’t matter much to his parents. However, when an AT&T; representative, with a picture phone on her end of the line, called to chat about his reactions to the device, Landau says he felt “very odd.”

“I wanted to say ‘Get out of my house,”’ he says. “I learned that I will only talk to people I love and close friends on the videophone.”