Date: Mon, 10 Sep 2001 13:33:32 -0400 To: Matthew Gaylor <freematt@coil.com> From: Matthew Gaylor <freematt@coil.com> Subject: Proliferation of tiny wireless cameras worries privacy advocates Content-Type: text/plain; charset="us-ascii" ; format="flowed"http://www.siliconvalley.com/docs/news/svfront/027254.htm
Posted at 4:43 p.m. PDT Sunday, Sept. 9, 2001
Proliferation of tiny wireless cameras worries privacy advocates
Peter Karlson, a Boston-area technology executive, bought an X10 wireless color video camera shortly after he drove up the driveway to his Cape Cod vacation house and discovered that a fallen tree had been leaning on his garage for a whole week. Now he has two X10 cameras so he can monitor his Cape house from a computer in his Boston-area home.
Visitors to the Voyeurweb Internet site are also buying X10 cameras, but for a different kind of monitoring. The site, one of many devoted to ``hidden cameras,'' hosts a bulletin board where users trade tricks and tips for using the X10 cameras for voyeurism. Currently the Web site's regulars are discussing the best places to hide X10s in bathrooms (among the suggestions: tissue boxes, silk plants, detergent bottles, toiletry bags, and plug-in air fresheners).
What exactly is an X10 wireless video camera? Right now the $79.99 XCam2 camera is at the center of a phenomenon that's part marketing innovation, part cultural barometer, and part Internet economic indicator. The company's ubiquitous ``pop-under'' Web ads have been cited as indicators of an increasing desperation in the Internet advertising market and encroaching voyeuristic tendencies in American popular culture.
The technology behind this phenomenon, which relies on radio frequencies to enable limited communication among devices with a range of up to 100 feet, is not particularly new or powerful -- just dramatically more available and affordable. The market for these devices was once restricted to spies, private detectives, and security professionals.
But now a Seattle-based company, X10 Wireless Technology, is trying to change that by aggressively marketing wireless video cameras to a more mainstream audience on the Web, touting the cameras' usefulness for monitoring the kids or even finding out who's stealing the mail. The Web ads are also notable for their not-so-subtle suggestions that their cameras can be used for voyeurism. One of the X10.com ads running this week features a bare-backed woman next to the headline, ``Quit Spying on People! (we never told you to do that).''
X10's Internet-based marketing campaign is also attracting an unusual amount of attention because it is based on ``pop-under'' ads, a new style of Web advertising that launches a new, smaller Web window under the site that the user is currently viewing. When the user clicks to a new page, or closes the primary window, the ``pop-under'' appears. And because Internet advertising rates are depressed to bargain-basement levels, X10.com has been able to roll out very broad pop-under campaigns across many of the Web's most popular sites.
Pop-under campaign According to a recent Jupiter Media Metrix Internet audience report, the X10 ads have succeeded in reaching 33 percent of the entire Web audience between January and May 2001.
Many advertising analysts, however, are unimpressed with X10's marketing strategy.
``The ads do generate mass reach online, but they fail to convert browsers to buyers,'' said Marissa Gluck, senior analyst, Jupiter Media Metrix. ``They are so ubiquitous they are irrelevant. Consumers are becoming annoyed.''
According to Gluck, the X10 pop-under campaign also takes advantage of the current advertising downturn on the Internet.
``Their strategy is dependent on cheap, almost limitless inventory,'' she said. ``That's not going to last forever.''
X10 Wireless Technology did not respond to repeated requests for information. But according to documents filed with the SEC to support a planned IPO, the company is a spinoff of a firm based in Hong Kong. Revenue at X10 has risen dramatically since it opened its Web-based storefront: from $134,000 in 1997 to $3 million in 1998 to $15.9 million in 1999. During the first nine months of 2000, the company brought in $21.3 million.
Profits elusive Profits are still elusive, however. In 1999, for example, the firm lost $5.6 million. Part of the equation is X10's massive Web-based advertising budget. In 1999 the company spent $8.8 million on marketing, ``mostly on the Internet.'' During the first nine months of 2000, it upped its sales and marketing budget to $10.7 million. According to the SEC filing, 98 percent of the company's sales were over the Internet.
Whether or not X10 achieves profitability, the company has contributed to the proliferation of wireless cameras. James M. Atkinson, president of Granite Island Group, a Gloucester company that detects electronic surveillance equipment, has already noticed an increase in wireless video surveillance.
During the last five years, Atkinson claims to have found X10 and other wireless video transmitters in college shower rooms, attorneys' offices, judges' chambers, corporate board rooms, the desk of a senior narcotics detective and hotel lobbies. More recently, he said, his company has found video bugs in a local funeral home and in the Boston office of a major investment bank. (Atkinson declined to name any of the locations, citing confidentiality.)
``We're in a surveillance society where everybody wants to spy on everybody,'' Atkinson said.
X10's promotional push is raising concerns among law enforcement officials, attorneys, and consumer advocates. If the cameras become commonplace, some observers believe we will enter an era of do-it-yourself spying in a society already struggling with a host of privacy-invading technologies.
``The bottom line is that technology is outstripping everything we once contemplated about privacy,'' said Ralph C. Martin II, Suffolk district attorney, whose office is currently prosecuting a Jamaica Plain man for secretly watching his female roommates using a wired video camera.
Meanwhile the X10 phenomenon continues to grow. Earlier this month, Jupiter Media Metrix published Internet audience measurements for July that indicated the X10's pop-under ads are reaching more people than ever.
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