Eric Setton, founder and CEO of Tango, a mobile video-calling app with around six million users, says he can already see the difference. “Scheduled calls are a consequence of having to be in front of a PC. Most of our users make and take unscheduled calls because they can, and the phone is more personal.” Many people use video calls to show distant friends goods they are browsing a store, says Setton.
David Hsieh, VP for emerging systems at Cisco, warns, though, that carriers won’t necessarily let users go wild with free video calling. “I think it will take a while because of the cost of the 4G infrastructure,” he says, suggesting that video calling is likely to come at a premium. AT&T, the sole network on which the iPhone is now available, allows only Apple’s FaceTime video calling over Wi-Fi. Verizon offers free Skype video calling, as does Sprint via the Qik app.
Skype’s Christensen acknowledges that there is a “trend towards tiered pricing from carriers,” a business model under which “premium” features like video calling would come at an additional cost on top of a user’s basic subscription rate. “We’re actively working with our carrier partners on this issue because we don’t want that to become a stumbling block for users.”
The biggest stumbling block may already be in place, though: it is not currently possible for users of different video-calling services to connect. FaceTime users, for example, cannot call Skype users or those using Google Video chat.
Hsieh says this goes against “Metcalfe’s law,” the principle that the value of a communications network is proportional to the square of the number of people it connects. This relationship is used to explain the growth and value of everything from fixed-line phones to the Internet, and its payoff is limited by the walled gardens offered by different video-chat providers.
The dream of being able to dial anyone for a video call seems distant. “Standards are out there, but they don’t allow fast innovation,” says Skype’s Christensen. “But we have just released our own SkypeKit that allows anyone to build Skype into their product or software.” Representative surveys of Skype’s more than 500 million active accounts show that calling into other video networks is not a priority to users, he says, and besides, the technical work involved is complex.
Skype, with a user base that dwarfs those of others offering consumer video calls, is well placed to dominate the market. What’s more, last week the company bought competitor Qik, which provides video services on Sprint’s 4G WiMax network. A recent report from the market-research company TeleGeography said almost 25 percent of cross-country-border phone calls were made using Skype. This means that around 10 percent of all international calls are already Skype video calls.