WebRTC Expert Feature

April 30, 2013

What Impact Will WebRTC Have on Audio Conferencing?

WebRTC is already starting to change the audio conferencing world.  Uberconference, Drum and others have already begun to use WebRTC as a way to have clients be part of a conference with little to no cost. Is audio conferencing moving to a free model? What will the market impact of this transition be?

With WebRTC/VoIP and the expanding capability of conferencing with software, the technology of conferencing has changed. As the media stream was already "computer ready" in the form of packets, there was no need for special hardware to interface with it to have conversions. In 2005, the Nortel Media Server, a conferencing bridge built completely in software, could do about 300 ports of audio conferencing in a 1U server. With Moore's Law, the capacity of anything in a computer doubles every 18 months if the data handled is linear (or close). Voice bandwidth/service is a small linear growth; we don't talk any faster, and the bandwidth of voice is not changing, so only conferencing minutes grow. Even adding on wideband is a small tax for the codecs to compress and decompress. So the 300 concurrent users in a single server in 2005 became 1,200 in 2007, 4,800 in 2010, and around 10,000 today. Ten thousand voice ports equal over 5 billion minutes per year (10,000 * 365 * 24 *60). A co-located server, including internetwork bandwidth, is about $10,000 per year maximum. If we assume that only 10 percent of the minutes are actually useable due to time of day use variation, scheduling, etc, that equates to a cost per minute of two one-thousandths of a cent ($.00002) for active ports/users. If someone uses conferencing for two hours a day for 240 days per year, the total is 24,600 minutes per year and about 50 cents ($.50) per year in cost...about four cents per month today. And if we use a virtualized server, this could drop by another 50 percent and the next turn of Moore's Law is another 50 percent, so by 2015, it should be less than a penny per month.

This is why all of the Google voice and other real-time audio apps go through the server, even for point to point "conferences." Google believes it can monetize the voice media, last year it was granted a patent on using voice traffic to generate focused advertising. The Skype model of peer-to-peer media to avoid cost was important 10 years ago, but is not now. With WebRTC, the ability to deliver this functionality on any device with a browser is now possible. With WebRTC, your PC, tablet, smartphone, and even your television are now direct, IP connected audio real-time devices, and all of the traffic flows over the Internet directly to the computer doing the conferencing. The networks are getting faster at a rate equal to or greater than Moore's Law, so all of the voice is actually a rapidly shrinking percentage of the available bandwidth.

The true model for free conferencing probably has not yet appeared. Will Google open up unlimited free conferencing over Google Voice in 2014? Will the much anticipated Facebook voice system include friends chats that will be conferences in disguise? Will all of the groups in LinkedIn be conferences? With a simple click from your browser and WebRTC, this model is the future, and will be free and supported by the models already supporting the content in those businesses. 

If the $3B US audio conferencing business is growing at 10 percent per year, without cost erosion it should grow to somewhere north of $3.6B in two years. But if a third of the current market moves to the free model in some form, it will actually drop to $2.4B ($2B and 20 percent growth). But if the average conferencing service drops their current price by 40 percent to maintain their customers in the face of increasing price competition and customer migration to new low cost or free services, the result is that the $2.4B becomes $1.44B, or about a 50 percent decrease over today's market. While this is great news for the rest of American business, it does not bode well for conferencing providers and traditional vendors who are not planning for the transition. BT, for example, is partnering with Dolby to deliver a spatial audio conferencing service that enhances understanding by moving voices into three dimensions, eliminating the single speaker mono of today's conference. Obviously, someone in BT sees the handwriting on the wall. If you are a conferencing provider or equipment vendor, planning for this transition may be critical to your business.

As a final thought, video is really just voice with more bandwidth. And Moore's Law predicts 10x in 5.5 years, so if video is 20-30x Audio in bandwidth, the same scenario is coming in video in 2020. By then, voice and voice conferencing will have become embedded in the fabric of the Internet, without cost or thought and we will all be speculating on the impact to the video vendors. I am sure someone will have an answer; it may be the time to invest in holographic conferencing.

WebRTC will create incredible new opportunities, but for some current business models it will mean dramatic changes. As you plan for 2013, including WebRTC in your plans is critical if conferencing is either a product or service you sell or a product or service you buy.

Edited by Rich Steeves


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