Chatting it Up: Desktop Video Communications Explodes

Monday February 1, 2010 – Maya Jasmin

It’s no longer just for the big shots ensconced in expensively equipped board rooms. High-speed IP networks, low-cost web cams and improved video compression are letting the rest of us in on video conferencing and video chatting.

It has been a foregone conclusion that many consumers would embrace face-to-face video communications when quality improved (dramatically) and costs came way down. That time has come as video communications desktop application software represents a new and rapidly growing market. That area of growth is fueled by the prolific age of instant messaging where most major market participants include video chat in their applications. Now all you need is a webcam and a PC to see the faces of your contacts.

A few major desktop software application providers, such as Google (Gmail Video Chat) and Microsoft (Microsoft Live Messenger) use the AVC codec as their video compression technology. DTC estimates that in 2009 a little over 70 million first-instance downloads of the AVC codec onto PCs came from video instant messaging applications, and we expect 238 million AVC downloads to come from those applications in 2014.

The main competitor to AVC/H.264 in this market is On2’s proprietary video communication technology, which is used by Skype, AOL IM (AIM), Yahoo! Messenger, TenCent QQ (Asia’s biggest provider), and ooVoo. Google is still actively pursuing the purchase of On2 so it remains to be seen where this acquisition will lead in terms of the desktop video communications market as a whole.

With an exact future of this market unknown and no current video technology winner, the field is seemingly wide open for video technology providers and explosive growth. This market encompasses all demographics of users from giddy school kids to doting grandparents, and every type of personal and business user in between. With friends, loved ones, and business associates just a click away this is definitely a market to keep an eye on!