X10's latest XCam hits the Net

The Seattle company, whose racy XCam ads have both titillated and infuriated Internet surfers, makes inexpensive, computer-connected analog video cameras that are smaller than a golf ball. X10 recently added a kit that lets people using its wireless mini-video cameras send and view those images on the Internet. Previously, the camera sent images to a PC, a TV or a VCR.

X10.com officials say the $199.99 XRay Vision Kit will appeal primarily to single moms, business owners and general technology enthusiasts. Indeed, analysts say the additional Internet capability takes the Net into the living room in new ways. But critics also wonder whether X10 isn't inadvertently promoting computerized voyeurism.

'Shouldn't be done'
It's a charge that makes officials at X10.com bristle.

"I'd be disappointed if they were used that way," said Alex Peder, the 40-year-old president of X10.com.

Peder also pointed out that the potential for mischief making existed long before the arrival of the XCam. Indeed, plain old-fashioned handheld video cameras have figured in several high-profile incidents this year, including one in which video of college athletes changing their clothes in the locker room appeared on the Internet.

"It's one of those things where it can be done, and it probably shouldn't be done," Peder said.

The XCam, introduced in June, represents a natural outgrowth of its parent company's business, according to Peder. X10 Ltd., a 22-year-old, privately held company, makes home automation, entertainment and security systems based around the X10 protocol, which uses power lines to transmit information.

The company's products allow consumers to control lights or appliances from a PC or specialized remote control device. It also makes the REX10 barking dog alarm as well as the DVD Anywhere and MP3 Anywhere, products that push DVD or MP3 files from the PC into home entertainment systems.

As private companies, neither X10 nor X10.com release sales figures. But industry sources estimate that X10.com, which began in 1997, annually generates between $30 million and $40 million in sales. The total includes all of the X10 products it sells, not just the XCam.

Peace of mind
While its cameras don't sell as well as digital "WebCams" from Logitech Inc. or 3Com Corp. (Nasdaq: COMS), analysts say their low price makes them attractive to consumers, and it probably leads its "wired home" niche.

"They're the only ones that I'm aware of" who offer both a wireless component and Internet access, said Van Baker, an analyst at Dataquest. Baker says that being able to check the home while on the road can add peace of mind for travelers.

Certainly, any parent who's ever seen "Ferris Bueller's Day Off" would like to be able to remotely tap in and make sure the car is still in the garage.

Rob Enderle, an analyst at Giga Information Group, who used X10 products to keep tabs on his dogs, thinks the XRay Vision Kit's Internet component will help people monitor what's happening on the home front while at work, particularly since the device can send e-mail updates.

Big Brother
Another analyst said the low price point and small size of the camera could allow consumers to more closely monitor their homes.

"They seem to be extending the idea that anytime anything happens, there seems to be a video camera to record it," said Alexis Girard, principal analyst at Future Computing Inc. in San Mateo, Calif. Girard speculated that if consumers really do start using cameras that way, "it's really going to change our society. Everything's going to be under observation all the time."

Peder acknowledges the privacy issues, but added that the company did not condone invasions of privacy. "There's a seamy side of everything, and that's not what we're promoting, by any means," he said.

Then again, the camera is called an XCam, which now offers XRay Vision. And while the X is intended to remind people of the X10 protocol, it also carries the unfortunate connection with X-rated movies.

The X10 marketing campaign, which feature photographs of come-hither women in banner ads, hasn't discouraged that connection. As one ZDNN reader put it in an e-mail, "The content seems to hint that the use for this is to 'spy' on a woman with a large chest..."

Indeed, several advertising experts suggested that the ads do imply a racy use for the camera.

"It sets a connotation. It implies a usage for the camera," said Neil Wasserstein, director of the television group at Arbor Inc., a research firm in Media, Pa.

Not porn
The comparison infuriates Peder. "It's not the first time it's come up. 'X' is a letter that's unfortunately been destroyed by the porn operations. I loathe them. I love X10's products, I love the company; I hate being compared to that."

He also defended the ads, which are developed in-house. "I don't think we've crossed any lines, and I could vehemently defend that," he said. "I don't spend time on porn sites, but I don't think we're there, not even close."

To be sure, X10.com's site plays things absolutely straight, with no prurient images of any sort. What's more, the company's other online advertising for products such as DVD Anywhere do not contain pictures.

Peder acknowledged receiving complaints about the ads. But he said the number doesn't compare with the volume of fan mail he receives about the products. The bottom line for Peder: For the XCam, ads with the women drive far more sales than ads that don't.

"We have tried (other types of ads). We load up our ad server with different types of ad creative, and it automatically weights the ad to the transaction that drives it. What's running is what's working," Peder said. "If it's so bad, how come it works so well?"

Many advertising experts agree with Peder.

"The women are not scantily clothed; it's not an overly sexual sale," said Ron Jacobs, president of Jacobs & Clevenger, a Chicago ad agency.

Jacobs, who also teaches a course in online advertising at Northwestern University, described the ads as "tacky" but noted "who says advertising has to be sophisticated?"