SEC Rule Sparks Interest in WebcastsWebcasts of earnings conferences have risen since the Securities and Exchange Commission enacted a rule in October requiring companies to make public information previously given only to analysts.
"While corporations can simply issue a press release, most of them feel that it is necessary to hold a conference call with an analyst, in which the CEO has the opportunity to address analysts' questions," said Lynn Little, senior vice president of marketing at CCBN.com, Boston, an investor relations Webcasting company. "In this case, the company runs the risk of not disclosing everything in the conference call on the release."
Webcasting offers an inexpensive means to conduct a listen-only conference call, Little said. Telephone-based conference calls can cost about 29 cents per minute per caller, she said, which is generally more expensive than the flat fee charged to Webcast a conference call. CCBN charges a flat fee of $600 per Webcast, she said.
CCBN Webcast about 2,800 conference calls in the past quarter compared with fewer than 250 in the year-ago quarter.
"The immediacy of the rule [Regulation FD] going into effect created tension on the investor relations arena," Little said. In response, she said, CCBN offered corporations free Webcasting through the end of last year.
"Webcasting conference calls allows the individual investor to only listen in, giving the analysts the most time to ask and answer questions," said Charles Szews, executive vice president and chief financial officer at Oshkosh Truck Corp., Oshkosh, WI.
At Xchange Inc., Boston, which will Webcast its fourth-quarter earnings Jan. 26, communications manager Tristan Jordan said, "Our intention is to make financial information as accessible as possible, and a lot of people are more comfortable listening to information on the Internet rather than dialing into a conference call. We have been Webcasting our financial results for over a year. Regulation FD just reinforced this."
Streampipe.com, Washington, a streaming media and Webcasting company focusing on corporations, government and trade associations, launched an e-mail campaign late last month to its list of almost 100,000 clients alerting them to the SEC rule and detailing the company's services. The campaign has generated a 2 percent response rate.
The company also launched print ads in trade magazines such as Government Executive. Also, Streampipe.com kicked off a 12-week radio ad campaign last month in the Washington area alerting listeners about the new ruling and detailing the company's offerings.
Streampipe.com CEO Blair Fuller said, "As a result of the new ruling, we are beginning to see a lot more corporate clients select long-term Webcasting agreements."
Fuller said that to compete in this niche market, Webcasters must be able to provide a turnkey offering. Streampipe.com provides its customers with audio and video production services, content production and database management, he added.