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Everyone Is Video Calling

The technology is becoming ubiquitous—but don’t expect to be able to call just anyone.
January 12, 2011

A slew of new smart phones, tablet computers, and even TVs with front-facing cameras were announced at last week’s Consumer Electronics Show (CES) in Las Vegas, opening the way for video calling to become the next big trend in communications. There’s just one problem: a lack of interoperability between different video-chat platforms could mean frustrations for users.

Face to face: Phones with front-facing cameras, faster data networks and apps like Qik (recently acquired by Skype) are making video calling ubiquitous.

Video calling was a key feature of many of the smart phones unveiled at CES—like the LG Revolution. Fourth-generation, or 4G, data networks that are being rolled out by mobile operators provide the bandwidth needed to deliver high-quality video to mobile devices. “We’re hearing from carriers across the board that the number-one use case for 4G is video calling,” says Jonathan Christensen, head of platform at Skype, the Luxembourg-based company that makes voice and video communications software. The reliability and speeds offered by the new networks add up to a video experience that matches that on a PC, Christensen says.

Indeed, when Sprint launched the first 4G phone in the United States in 2010, the HTC Evo, it made a point of focusing on video calling (via an app called Qik) in its promotion of the device. Last month, Verizon switched on its own 4G network, based on Long Term Evolution technology. And at CES it announced a new Skype video-calling app for phones and other devices that use its 4G network, including the LG Revolution and the HTC Thunderbolt. Both phones are capable of HD 720p quality video. Verizon’s new 4G tablets, the Samsung Galaxy Tab and Motorola Xoom, are also expected to offer Skype when they launch in the next few months.

Meanwhile, Google’s tablet version of its Android operating system, announced last week, includes a new Google Chat video-calling app. And when the iPhone appears on Verizon in a few months it will substantially expand the user base for Apple’s FaceTime video-calling service.

In the living room, CES saw Sony and Vizio announce that they would add Skype functionality to new Internet-connected TV sets, a feature already offered in some models from Panasonic and Samsung. The networking company Cisco, which leads the business videoconferencing market, also launched a service called Cisco Videoscape that provides TV content and video calls via the Internet. And Google TV owners can already make video calls from their TV if they are using Logitech’s Google TV box.

“Video calling is coming of age because it is now available on multiple platforms, including TV and mobile,” says Eric Kintz, VP of Logitech’s video business unit. “Today, many users schedule video calls in advance and keep them short, but I think that is now changing.”

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.

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