Accelerating Innovation

Unbound Spiral: Skype to be Walled for Profit?

September 26, 2003 04:32 PM

There's increasing discussion around Skype and its business model. The question keeps getting asked. How will they make money? Beyond software charges where is the next money making opportunity? Personally I don't think there will be much charging until a million people are on all the time - perhaps more. So far we are only at 50000. So there's some way to go.

For a call charging model I first thought of those used for cellular in many countries outside the USA where one just pays a flat fee. In NZ you can call any number in with no minute limitations. Cell phone to cell phone calls were also free. However (and unlike America) a landline to cell phone call was expensive. Probably still round US$ .20 to .30 cents a minute. This same barrier exists on international long distance.

Call-in Charging Makes it more Viral
I've had a sense that all the "money constructs" are about calling "out" rather than calling "in" to Skype. What if Skype failed to execute a call "out" of the garden but quickly enabled the cheapest calls on earth in? That would help growth --- right! It would also infect others. Even with a free Skype account others could call you without knowing anything about Skype, just that you have a new number.

So the step two in the money making infrastructure is in enabling people to call into the Skype network. In the US we have 900 numbers 1010629, 1010987 and other dial round services. I'd imagine my New Zealand mother-in-law - no-PC being very happy with a local call and a cent a minute to dial internationally. Hour long calls from any phone in the world to a Skype account for less than $1.00?

Create a Simple Dial Solution for non Skype Callers
This sort of presumes that from a consumer perspective all you need to know is the equivalent of 1010Skype and the call to ID pressed numerically which then may require a choice from names currently online or a zip number or similar. I'm sure there is a voice activated solution somewhere that would dock with their directory. Then it connects. What could be easier? It also benefits Skype. People then need to be transparent about their directories and names.

Businesses accounts could make this a free number by paying for the minutes at the access point. (Note those business accounts will want one account multiple answering capability).

Thus calls remain free between Skype users, many of which will upgrade their accounts for portability and access. Calls in to a Skype user are very low cost, perhaps a 10th of today's rates.

Plausible Scenario?
This scenario has the potential to attack both traditional POTS charging structures and hit mobile users that will soon be carrying WiFi enabled gadgets. It also encourages Skype users to continue bringing their friends into the garden.

To top it off. Skype is likely to enable "Skype to SMS" as they introduce this calling charging system. It would be interesting to play with the numbers. I'm guessing they could subsidize SMS with the inbound calls.

Other point ofs view???