Making Skype More Profitable and Ultimately Better

SkypeThere have been a few articles floating around talking about the fact that eBay is considering selling Skype. Although the talk is mostly related to new Skype CEO John Donahoe referring to “synergy” and weather or not the two business are complimentary. I think this might be cover for “profit”. The acquisition of Skype by eBay was a curve ball in most commentators eyes and there is no doubt that it has likely had a negative impact on Skype’s revenue and image.

That discussion made me think about what is it about Skype that is stopping it from being a giant (a bigger one). Number one in my book is the fact that most users don’t pay for any calls they make. They use it as a communication tool while online. They take advantage of Skype’s free calling, which is great. But there is no profit to be made from free. This is despite the fact that paid calls are cheap and deals like “Skype Pro” were top value for money. Indeed the new “flat rate unlimited calling” is also feature rich and again cheap. So if the majority of users are not taking them up on these great offers what can they do?

Charge for the use of Skype. That’s right charge for it, make Skype a subscription service on a per year basis. Before you go screaming your butt off hear me out. If you are screaming you must use and value Skype, I hear you. Skype is one application that I could not live without.

One of the strengths of Skype is the user base, it is massive. Used by an estimated 30% of all internet users and accounting for 95% of all VoIP traffic. Watching the total users online I see a constant + 10 million. There are questions about “active” users on Skype, given that total registered users is reportedly over 100 million but that is what I see on a regular basis so lets use that in our math.

With this huge user base Skype is in a great position to use that market share and economy of scale to charge a minimal subscription fee and make a very large profit. Consider this:

Skype have 10 million active users. Charge $10 per year for the use of Skype free calling PC to PC, therefore outside of SkypeOut. Given the fact that some people won’t pay this and ditch Skype lets be conservative and say that they lose 50% of current users. Now we have 5 million users paying 10 dollars a year. That is 50 million dollars a year! That is profit that they just don’t have coming in right now that could make Skype a whole lot better. Skype’s revenue is currently running around 500 million, subscriptions then would account for 10% of total revenue, that is a lot for any business.

I don’t think that they would lose 50% and I think that it will benefit users and Skype. I would pay 10 bucks a year. I might consider paying more. Why? I think that it is that good and I don’t have a problem paying for a quality service. I have used a number of VoIP services and none compare to the quality that I get from Skype, especially for recording. Generally speaking Skype is constantly reliable and stable, making it easy to use and dependable. Ten dollars a year is a very nominal fee for a great service.

In addition if I knew that the addition of a fee might make for a better Skype and encourage more development, great. They could even concentrate on working on some of my gripes:

  • No record feature native to the software
  • Bloatware like Skype Extras
  • Creating a stripped down version for optimizing call quality

I know that many people will disagree with me and strongly. I may even get flammed for putting ideas in their head. But quite frankly I don’t want to loose Skype. I sure as hell don’t want to lose it to the likes of Microsoft or some other web company that will pollute it with rubbish… “Yahoo! toolbar will be installed with Skype” (in fine print at the bottom of the EULA). Skype should concentrate on being a VoIP service, not a games platform, not aan application client, not anything else.

I will say though that subscriptions without value adding to the application and development of more bloatware would be a disaster. But the opposite would make for Skype to develop and maintain a platform for which there is no equal. As long as they add that record button.

Would you pay 10 bucks for a killer app?

Stupid Idea, Has a Life of Seconds

Found out today that there is a new company called The Pudding in private beta. Nothing new there. They are offering free PC based calls. I can only presume that this implies PC to landline calls. Great, excellent. But we all know that there is no such thing as a free lunch. But sure we can put up with the odd advert or pop-up if the product is worth it. But the product better be good. In this instance I don’t think any product would be good enough.

The price of the free calls is that you agree to let the company listen into your conversations and then deliver contextual advertising based on what you are talking about. What the heck are they thinking? This has got to be the worst business model I think I have ever heard.

In this era where people are as paranoid as ever about issues such as privacy and identity and all that goes with it, a company has decided to “bet” that people are going to be willing to give all that up for what? Free phone calls! Stupid idea. It just is not going to happen. That opinion comes without even exploring the idea of advertising which quite frankly I could do without and would rather pay for a service that comes ad free. But that is me.

Stupid name stupid idea, and that is going straight into the broken egg pile here at the chicken coop.

The Pudding Screenshot

Via: Silicon Alley Insider

Skype 3.0 Out of Beta

SkypeSo Skype 3.0 is out of beta, I am yet to be impressed.

While the interface now looks a bit better and functionally easier for users to get Skype functional I was disappointed to start seeing bloat. The RAM that Skype now uses is up around 30 MB. The Skype client itself is taking 12 MB on it’s ow, the other 20 MB is an application called skypePM.exe. It is the Extras Manager. Damn if that ain’t bloat I don’t know what is. This is optional on the install. It may well explain why my computer now takes an aeon to load as well. I will be uninstalling and reinstalling with this feature out.

Then there is the recording issue. As regular readers would know I have been harping on about the ability to record Skype for ages. But since Skype is yet to build this ability in I have and used Hot Recorder, it worked beaut. Until Skype 3.0 showed up, it now successfully records silence. Sure the new Skype as the old Skype could be used with a plug-in, now “Extras” that are able to record. One hot tip; none of these applications are able to record Skype with anywhere near the quality required for podcasting. So what now Skype? It looks to me that Skype are going to rely on 3rd party applications to take up the slack in the recording department. A shame because Skype would produce the best one. These other applications are lacking the quality required.

The positives while there, are hard to find for me. The audio quality seems to have improved, so that is a good thing. The other thing that has improved that may or may not have to do with Skype is that file transfers seem faster. Nothing huge but they are no longer dismal. The integration of Skypecasts is a good one.

Speaking of Skypecasts, having them in the interface of Skype is great. I have never heard one before today. The fact that they are in the interface meant that they were easy to access and that the ones there were on then or starting soon. So I thought that I would pay one a visit. It was great fun and I was able to network with a few people and added them to my Skype contacts. I even meet up with another Australian podcaster! Small world.

The cast was a computer help one that offered people that had joined the opportunity to have their questions answered or a problem sorted. Which is a great idea and people seemed to take advantage of getting some real-time assistance with what they were trying to do. Far less formal than a podcast it offers a great forum.

I was surprised at the sound quality which was good. Although the quality of other participants was the limitation. Some “callers” I am sure were on dial-up, given how it sounded! But most people had reasonable connections. It was fun and I’ll be doing it again. The other thing is that you could easily listen to a Skypecast and do something else at the same time. Does that make me a lurker?

This is the extent of my experience with the new Skype. I hope that it improves and I feel a bit better about it in time.

So my mixed feelings on Skype continue. I sincerely hope that they keep their focus on call quality and just consider including a RECORD button for future releases (I would even pay for it). Some nice improvements. Regular users will find it a worthy upgrade, not much here for the person that has special requirements and the bloat is not necessary in my opinion. I certainly feel that this is the most corporate version to evolve so far. A sign of the times? Only that very thing will tell. But with over 7 million Skypers on-line as I write this who am I to argue?

NOTE: The Hot Recorder Homepage is broken and this product is no longer developed from my experience.

Skype 3.0 Release Screenshot

Video Calling Here… What it Means to Me

Video for phone calls may be here but not the way the we might have expected it would be. Certainly not the way I thought it would when I was a kid.

So I thought when I was younger that one day we would have phones that had video in them of the person you were calling. As in home phone that is. I know this feature is available on some mobile phones but it costs a bomb and I would not say that it is widely available and it is price restrictive.

Skype on the other-hand is available, functional and free. The power of Skype was made very clear to me a wile ago when I got a web-cam and a close friend of mine got one as well. We could talk and see each other and it was second best to being there. It is that feeling that, if I can’t be there then this is great and I am feeling like we are hanging out; that is the difference.

With Skype now supporting Mac on the video front I have had a few more of these “being there” experiences. My brother recently converted to Mac only, yup every machine that he owns is a Mac. He was bummed that video was not supported in the Mac, but a week or so ago it happened. Skype for Mac now does video and James and I were able to chat and talk and see each other for the first time. The cool thing in this instance was the fact that we had our kids with us and we were able to interact and have fun, the kids loved it. I think they found it a little strange as well though. This is something that I cherish, my brother’s family is the other end of Australia near Sydney. So Skype gives us something that we would not otherwise have.

Screenshot of Skype Call

Yet another experience that I had recently was that of the Trans-Continental variety. And we took a screen shot to boot. Good mate and podcaster Knightwise from The Knightcast Podcast (from Belgium) and I were chatting on Skype and we fired up the video. He has a Mac as well so this is new to Kinghtwise as well. But the thing that made it absolutely hilarious was the fact that I was talking to Knightwise, using the video and he was cooking potatoes. Don’t know what is was it was just funny. It gave that being there experience and the fact that it has all the ambient sounds of him making his dinner. It seemed a normal thing to do. Talk to The Rooster and make dinner. Not something I thought I would ever do when I was a kid.

The most amazing thing is that all this is free. I can chat for hours to anyone that has Skype for free. Admitedly; a broadband connection is required, but taking something that I would have anyway and using it in this way has blown my mind. That is to say nothing of the fact that this is a free service! Sure phoning me from a land line to Skype costs money, but it is very, very competitive at the cost of a local call in Australia or to call out from Skype is cheaper still at 0.027 cents per minute (no the zero is not a mistake). I am slowly dumping my home phone. I have been saying and will continue to say that the telecommunications companies have a lot to worry about. This is further demonstration of the fact that in the end they will either have to evolve or die.

My home phone just can not give me the experience that the Internet and Skype can. I ask what they are doing about it?

So the ride to where we are now is not what I expected it to be nor have we arrived to where I thought we would end up (since when is that the case anyway). But I am excited about being a part of it and will continue to integrate technology into my life. It is finally becoming something that is impacting my life. Although I still hate computers.

If you want to call me on Skype just call 07 3102 3535, try it out. Or better yet download Skype and call me for free!

Could Skype Crush the Telco’s?

SkypeAs you would probably realise I have been away for a few days. I was blown away by the news that Skype has applied for a patient that indicates that it might in the future offer free calls to any phone worldwide for free!

The patient has not received much publicity to this point, mainly because the call from objectors has not been made. That happens on the 1st of August. Prepare for war, that date is looming. The Patient’s title is “The Whole World Can Talk for Free”. Yes that’s been their slogan for a long time. But I refer to Russell Shaw’s reply:

Yes, of course I know Skype has been using this phrase in their marketing for a year now, and it appears on their home page. But why go to the point of registering it.. now? Is this basically a butt-cover to forestall similar phraseology from competitors who Skype fears may underprice them, or are there larger forces at work?

This is huge. We may be in the first stages of a major restructuring of the global communications market. That is to say nothing about the impact that this will or may have in Australia. In Australia we are ripped off supremely for phone calls and access. In addition to that we pay twice when we phone a landline using Skype; we pay for the broadband access, we pay for the call. Admittedly I would have payed for the broadband anyway but in my opinion this is a double dip.

One thing that may or may not be happening in other countries is that the major Telco in Australia (Telstra) charges everyone an access fee to a landline. Not so strange you say. What about the fact that if I choose not have a phone line and just use VoIP for my calls via my broadband connection; I still need to have a landline in order to get the broadband! So Telstra charge me for access to the line that I have to have then I have to pay for my Internet connection on top of that then I have to pay for my Skype calls to landlines and mobiles on top of that! See my point. So how might this rumour affect me should this prediction come true?

I could see the major Telstra off-setting the loss of revenue with an increased charge for access. Not only that they will charge like a wounded bull for the ignorant few that are left with no knowledge of Skype. So based on that I am not sure how this one will resolve. I am crossing my fingers…

For those of you that might doubt the power of the Skype marketing engine. Just remember that Skype have been offering free outbound calls in America for the last couple of months, what is there stopping them from extending this globally. With the right business model of course. In addition I think an inclined to agree with Shaw in that to take advantage of this you will probably have to make some form of financial commitment to some service that Skype offers. Still that given I think that it will beat the Telco’s hands down as far as value for money. We will no longer be held to ransom by these companies that insist on ripping us off blind!

In summary though I see trouble on the horizon for Telecommunication Companies that will need to drastically revise their business model in order to stay in the game. If they are not scared now they should be, this was always coming and it is on our doorstep now. I will be very interested to see what happens on the 1st of August. I am thinking that there will be a long list of objectors.

Of course this is all speculation but time will tell.

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