TokBox Works to Break Video Chat Out of Its Siloes, Flank Google+, Facebook

8/4/11Follow @wroush

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coding software. “Some enormous percentage of communication is non-verbal—from 50 to 90 percent,” says Small. “To pick one example, think of two things that are very popular these days in startups—distributed engineering teams and pair programming. Those two things don’t go together very well, but what if you could take an online development environment and put a little video of the person you’re working with right next to the code base? Now all of a sudden you can see out of the corner of your eye that the other guy is frowning. Which lets you ask ‘Why don’t you like what I’m writing here?’ That’s what you lose without face-to-face.”

Under the hood of OpenTok is a sophisticated, cloud-based, telecommunications-grade system for opening video chat sessions and allowing an unlimited number of people to watch or “subscribe” to the streams that the main participants are “publishing.” This flexible publish-subscribe model lends itself to many sorts of online gatherings, depending on what rules third-party developers want to specify. “If three of us are all publishing and the business logic says ‘Subscribe to everyone publishing,’ we have a traditional business conference,” explains Small. “If we were all publishing to the same session but the logic says, ‘Connect to one other person randomly,’ you have Chatroulette. If there are 1,000 people subscribing and just two people publishing, you have a talk show.”

Only a company as big as Google could muster the resources to replicate a system like this internally, Small says. “If you ask me whether I’m surprised that they could pull it off, no I’m not,” he says. “They’ve had a video chat offering inside Google Talk for a while, and Hangouts is built on that same technology. Frankly, when we were looking at the market 12 months ago, we projected that both Facebook and Google would be in this market with solution as destination chat sites, because Google already had the technology, and Facebook and Skype have had a partnership for a long time.”

But neither development presents a big obstacle for TokBox, in Small’s estimation, since Google Hangouts is tightly integrated into Google+, and Skype isn’t opening up its platform to developers outside of Facebook. Both systems are examples of what Small calls “a destination approach” to the world. “What about the millions of other sites around the Web that might have a reason to want to have face-to-face communications between their users?” he asks (a point he also addressed in a recent post at the TokBlox blog).

If Small is right about that “millions,” a lot of people will be knocking at TokBox’s door over the next few months. Which means the startup will have to start thinking pretty soon about the last piece of its formula: a revenue model. Right now, websites can tap OpenTok—the widgets, the APIs, and the whole cloud-based back end that supports the actual video conversations—for the unbelievably low price of zero dollars. Small says the basic service will stay free, but that the company will eventually introduce premium features that entail a subscription fee, such as high-definition streaming, encryption, or video archiving.

The startup may also look for ways to introduce advertising into its video streams—but in a way that gives publishers a cut of the action. “Right now we are trying to open up a future, let people get their toes in the water, and use it to their hearts’ content,” says Small. “But we are, after all, delivering live video, so delivering advertising is not that hard, if we do it in a way that is respectful of the sites and lets them participate.” Airbnb—which is not yet a TokBox user, though the two companies share an investor in Sequoia—probably wouldn’t mind that tradeoff.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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