Stuart Henshall

More on Skype Numbers and Growth

August 18, 2005 04:30 PM

Topics: Business | statistics

Om posted interesting numbers last night suggesting Skype growth has slowed. I'm more inclined to believe they provide some insight into the evolution of the community.

Om comments:

I managed to get my hands on some data which shows that the growth might be “really” slowing down, and that is perhaps one of the reasons Skype is out shopping itself. For instance, active users dropped 19% from April to May 2005 in the US, while France and Brazil had no growth during that time. UK and Germany grew at low single digit levels for that time frame. The overall active user base for Skype grew between 35%-to-50% from Q2 2004 through Q1 2005, but in the Q2 the numbers dropped to around 7%. Q3 is showing similar downward trend. Gigaom

Apart from definitions (What is an active user? Last seven days vs. 30 days would make a huge difference. Is "active" available for a call?) I'd like to see this data on a weekly moving average.

I’m also not convinced that a slowing growth rate means it’s all going backwards. It’s difficult to convert new people. I spend very little time getting new Skypers on board. Yet in the beginning I worked hard to get key members of my network using it. As the base of users grows, the “newbies” struggling to build up a buddylist are less visible in terms of impact --- on infecting others. As a result, growth percentages will decline. Their incentive to infect others also declines when there is a large immediate community ready and available to connect.

The numbers suggest that users for more than, say, three months aren’t adding new buddies to their lists; rather they just add more people already in the Skype community. At some point in the growth of your buddy list there just isn't the same same incentive to find new Skypers. Add SkypeIn and SkypeOut with a big buddylist and converting others becomes even less important to those heavy users.

As an observation and hypothesis. For many, a buddylist of 25 may seem perfectly adequate. The ultility and behavior changes when buddylists expand exponentially. I doubt the number of calls and time in a call grows exponentially with a doubling or tripling in the size of your buddylist. You simply couldn't cope. However more buddies means Skype is more sticky and more useful.

How big is your buddy list? When is the last time you introduced someone new to Skype? Go on. Convert a new Skyper today!




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Comments

Posted by: websetters at August 19, 2005 6:13 AM

I believe that there is also another consideration to the perceived slow down of growth and that's associated with the phase of adoption the Skype community finds itself.

Is it still in the 'early adopter' phase? Has the Skype network moved to the ‘early majority’ phase? It obviously has not yet reached the ‘early majority’ or ‘late majority’ phases as although the population is large – whichever of the numbers are used – it is minor when compared to the number of traditional telephones used across the world.

I propose that we are still at the 'early adopter' phase, maybe approaching the ceiling of that stage where a majority of the 'early adopters' are onboard, but not yet at the 'early majority' phase. A compelling event is therefore badly needed to push over the edge to this next phase. The issue here, as with any new technology, is the ease with which the new solution can replace the old and how big is the compelling event for that change. The complication for Skype is that the humble POTS is a very simple solution that many generations have grown up with. Therefore the compelling event needs to be that much bigger to be worthwhile for many.

People are sitting primarily in one of three camps. 

1) Those that recognise the economical and integration benefits that Skype brings and are comfortable to embrace new technology.
2) Those that understand some of the benefits of Skype but see it as a solution for ‘someone else’. The effort is not yet worth the benefit and effort in moving. 
3) Those that do not know or understand that an alternative exists nor the benefits or value that an alternative may bring. 

As already mentioned and commented by many, the Skype network has potentially got close to saturation of those in the first camp, hence the suspected slow down in growth. If the majority of these users are onboard, then the question is how do you bring onboard the people from the second camp? 

I know of people that are heavy users of the internet and computers and wouldn't go back to the old alternatives. However, they do not yet see the need to change to an alternative to the telephone that they just pickup, dial and talk. Although Skype may be cheaper it is not yet worth the aggravation for many. It is this community that needs to be brought onboard to help return Skype growth rates to the levels of recent years.

This I believe will only happen with support and active encouragement. It is well know that people do not change their banks, change their insurance companies or change their utility suppliers unless they are encouraged and supported to make that change - even when they can make considerable savings. If you can afford the current solution, then you are unlikely to have a problem. Why adopt a new solution, if you don’t recognise a problem in the first place? 

As highlighted by Stuart, the incentive for existing Skypers to encourage others to join the community is fading as their buddy lists are large enough, especially when supported by SkypeIn and SkypeOut, for them to personally realise the Skype benefit. If no one is around to help others move; make it painless; provide as easy as the existing service then it is unlikely these new potential users will change. 

It is now, more than at any other time, that Skype needs it’s partner network. Not just those that can provide new solutions and add-ons like voice mail and video but service organisations that can deliver the solution to the vast majority in the second and third camps. People just need to find a way to make money at offering such a service and it will happen.


Regards
Graeme

Posted by: richardapalmer at August 19, 2005 9:26 AM

SkypeOut charges -

Charges by the minute are too high. Some discrepancies between downloaded CSV file from Skype site and my own log (times taken from Skype call log).

Q - My credit consumption checks with Skype's online
call record using non VAT charge rates. I expected the charges to incl VAT as quoted?

Posted by: phoneNerd at September 23, 2005 12:36 AM

I found some statistics on the net that seem to support the assumption (http://www.ruell-consulting.de/product_info.php/products_id/34).

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