Love the announcement about Facebook video chat powered by Skype. Lots of questions not answered. Here are a few. I’ll update with answers as they come in.
I spoke with XConnect VP John Wilkinson this morning about their VIE product. VIE’s plumbing connects video calling services to each other. VIE (pronounced vee, the French way), the Video Interconnection Exchange.
VIE’s offers three interop services. Registry lookup, signaling, and transport.
VIE’s registry is a database of endpoints, each representing a video calling origination or destination device. A caller’s system asks the registry for information about the call destination. The registry holds identifiers like IP addresses and phone numbers, and maps the two to each other. It also holds profile data about what each end point supports. If your end point is a conference room telepresence system, what protocols does it it support? What codecs, streaming protocols, session setup, resolution, and bandwidth can it offer or require? The database is populated and updated by member networks from their own registries. A common registry is what makes VIE’s video interop work.
VIE’s second service is signaling between end points. You might call from a SIP endpoint to an H.323 endpoint; VIE translates those different session protocols.
Transport is the third service. For networks that want the service, VIE will move and transcode a call’s video and voice data. Transcoding converts live streams from one format to another.
Most of XConnect’s customers are buying all three services. VIE is free for current members now but XConnect will eventually meter usage.
VIE’s near-term roadmap includes enriching the registry with more useful information and ways to search, adding user presence, blending in Unified Communication services, and multiparty video calls.
VIE’s first users are in advanced markets with high penetration of voice over broadband, like the Netherlands and South Korea. Norway’s Telio has hundreds of thousands of customers connecting outside its network through VIE.
As I see it, VIE offers an immensely useful service. Video technology is balkanized, as are video calling networks. Connections and calling are becoming more complex, not less, as more networks seek interop. VIE lets operators avoid worrying about interconnect, focus on their own operations, and store information in a specialist service.
Wilkinson says pioneering social and communication companies often focus on being better and different. They start off building organic growth in their closed network. Sooner or later they reach a tipping point where the value to their customers (and of their customers) of Fast+Best strategy gives way to the value of the network effect, reaching more of the right people. My sense is Microsoft will push Skype to that tipping point in the next twelve months, demanding integration across all of the MSFT properties and established namespaces. Whether that drives Skype into XConnect’s arms? We’ll see.
Mobile operator Three partnered with design studio B-Reel to bring the high-touch experience of in-store selling to the efficiency of centralized service. Three Sweden calls the service 3LiveShop, a blend of call center software, CRM, video calling, multitouch user interfaces, heads-up display, and in-store retail culture. It looks gorgeous.
Conversion rates in retail stores are very high, and are painfully lower in online stores. The Fireclick Index reports 74% of online shoppers abandon carts with products before checkout; only 2.3% of shoppers buy. This adds up when the lifetime value of a customer is high and switching costs are low.
Three things inspire me.
That a large phone company executive gave real budget to such a crazy idea and let it come to market. Was this a corporate culture hack or the product of a vibrant innovation system?
That the design process focused on both users: the sales rep and the customer. Too often design favors one or ignores the other.
That the results found human eye contact and rapport were as crucial to success as navigating all the information overload. Video is the real value add, building trust and keeping attention. Touch means operators can respond quickly, within the timeframe of a live conversation.
Here’s hoping a future phase gives some of the touch-screen magic to the customer, for some deep co-creation and collaboration. And that the Swedes get the go ahead to roll this out to the rest Three.
P.S. They built the user experiences in Adobe Flash. Why not Skype? Skype is already a partner with Three.
First, Skype requires each party to a call to use Skype-provided identities. That just doesn’t work for walk-in-off-the-street relationships. Selling starts off anonymous (or at least pseudonymous) for both the customer and sales assistant until you are ready to pay.
Second, today’s Skype doesn’t offer a way to build a video call into a browser-centered retail experience. Even if the developers chose to build the CRM station with SkypeKit, the customer would still have to download a full Skype client or a customized SkypeKit app. That’s serious friction, an unwanted step.
Third, early versions of SkypeKit’s private beta license requires you to share business secrets with Skype about your use of SkypeKit, and give Skype veto power over release of your “Plugged-into-Skype” product or service. That’s a lot of outside control to cede when you can easily, cheaply choose other tools.
HP’s Visual Collaboration businesses will have a much better home at Polycom. Polycom folks understand how people talk at work, their engineers build quality product, and their brand defined office conferencing long before Cisco or Skype. The deal is expected to close in the next few months, followed by quarters of product line consolidation, rebranding, some light reorganization, and a renewed marketing push to get the last of this year’s enterprise IT budget from existing and new customers.
Everyone in this space is competing with Skype at the high-convenience, low-cost, network-effects end and Cisco at the high-touch, high-cost, tiny-private-network end. The extra talent, customers, and technology could buy them time to respond to video conferencing’s commoditization.
Beecher Tuttle speculated Skype bought the assets of group text startup 3Jam. Skype’s texting features are… uninspiring? Hiring 3Jam’s Enlai Chu might fix that. Or is it feature creep?
CallByText compromises Skype security, requiring your Skype name and password, setting you up for identity theft. (Thanks, Hudson)
Reuters reports Google and Facebook talked about buying Skype. They didn’t talk to each other, although that would be interesting. Like this is something new? Skype’s corporate affairs folks must talk to potential buyers, if only to understand a non-IPO deal space.
Ubergizmo unboxes the Logitech TV Cam for Skype. “At CES 2011, Skype on TV was a huge hit, particularly among seniors. I’ve never seen so many seemingly retired people at CES, and they were almost all excited by this.”
YouTube started with an asynchronous experience. Millions of files being uploaded, slowly. Prepared for different screens, slowly. Cached in content distribution networks, slowly. Watched on demand.
They’ve had many experiments with streaming live video, perhaps going back further than the October 2009 live-streamed U2 concert. 2011’s Royal Wedding was YouTube’s most-watched live stream. This means they had to upload one stream, instantly. Transcode for different screens, live. And cache and distribute live streams simultaneously across all regions.
Millions of live viewers, so, nicely done.
Is YouTube ready for the next challenge? To turn YouTube into a live video calling, conferencing, and casting service?
I’ve asked video and VoIP professionals about this for two years. Everyone says there are three challenges: addressing, connection and latency. Can YouTube users perform people search efficiently and accurately? Can you connect people promptly, grabbing attention so people answer a call? And can you stream the voice and video with less than a tenth of a second delay, so people don’t notice the lag? Industry people say these are hard, especially latency. No doubt. But I have confidence that Google’s commitment and resources can meet the challenge.
When the Google Voice team nails these problems, they are free to innovate user experience and market applications. To build live conversation into Google properties. To offer live conversation as a platform for AdWords advertisers. To define video as the default Android calling mode. To make your Google identity more important than your phone number.
Where does that leave Skype? Will they launch a cloud Skyping platform before Google? Will it be as compelling for today’s users and developers as the first Skype desktop clients were in the Summer of 2003? I know they aspire to a new degree of awesome.
Yet it probably won’t come down to quality or design. Network effects attract users, so the people you want to talk to or work with are within the network. Network effects trump product quality and user experience. Multiply network effects by the ability to reach people in the network. So can your network offer dialtone all day, everywhere, in every context?
Android gives Google an edge in network dialtone, always on in your pocket. Skype will have to be strategically awesomer to beat that.
A new entry level LogitechLifeSize video conferencing system now comes with two points of Skype integration. First, there’s a SkypeKit-based Skype client inside the LifeSize Passport. So you can log in with your Skype account and call or answer people in the Skype network or SkypeOut to phone numbers. Second, your Skype contacts now show up in the Logitech Passport’s directory. Passports will sell for under $2500. Sadly, there are no demos or screenshots. Here are LifeSize’s celebratory news release, the Skype partner page, blog post and Skype’s blog post. I’ll share more info if I get it.
Three observations.
First, SkypeKit must be maturing for this to come out; LifeSize is small enough that they can’t afford product risks with iffy components.
Next, someone at Skype did a yeoman’s job of reviving what must have been a strained relationship after being unable to deliver needed software since 2009. Job well done, team.
Last, having Skype inside your video conferencing system could well become a must-have. The ultimate market reach for 720p interop with a partner that won’t muscle into your market (cough-cisco-cough).
Study. 24% of immigrants to the US – smartphone owners – make video calls. Of those, 47% Skype for video; 74% of the women claimed to Skype; 42% of the men. 21% said they would pay for a monthly subscription for video calls.
Qik updated their latest iPhone app. Downloadrelease 6.1 (4) built 5 March 2011. Dead simple, pretty, and full of features missing from Skype’s other mobile apps.
I’ll show Qik’s features below the fold but expect all their technologies to show up in Skype’s consumer mobile software, consumer and enterprise desktop clients, and Skype’s platforms. Qik’s plumbing that makes this possible is now a Skype asset: cloud video storage and video streaming, proper integration with YouTube for file uploading, video chat performance tuning for a wide range of mobile phones. For the record, Qik’s APIs are Skype’s first web service APIs.
Let’s look at where most of Skype’s cash flow comes from: paying customers.
Skype is selling hard with the launch of Skype group video calling and the Skype Premium service to pay for it. Skype now features Fee over Free at a rate of 3 to 1, if you look at screen real estate on this US Skype for Windows download page. The Premium package has high eye-catching art, a contrasting green “Buy Skype Premium” action button, and a bright pink, attention grabbing special offer decal (“15% discount”).
The push is on to sell up from $3 to $12 monthly SkypeOut plans, where price of minutes continues to fall, to a $9/month service without competition from phone companies.
Group video calls are subject to a fair usage limit of 100 hours per month with no more than 10 hours per day and a limit of 4 hours per individual video call. Once these limits have been reached, the video will switch off and the call will convert to an audio call.
Calendar days start at midnight GMT (Convenient only if you’re in London).
The hours represent the time a subscriber hosts a video call, to the nearest minute. You can be in a group video call but only one subscriber is hosting, typically the one initiating the call.
You can add time with an upgrade but not a downgrade. So you may extend a day pass with a month subscription, but you cannot get extra time within your month subscription by buying day passes.
You cannot have multiple subscriptions at the same time. So you cannot run through your 100 hours in two weeks then buy another 100 hours; you’ll have to wait until the next month. Similarly, you cannot buy two day passes at once; you’ll have to wait until the first one expires before buying the second.
Your subscription or pass starts from when you buy it. No obvious way at this point to “normalize” your subscription to a billing period of your choice.
The 10 hour per day limit is for a calendar day. So if you buy your one day pass at noon and start your group video call, you’ll run out of time at 10pm and must wait until midnight to start your next 10 hours.
Are these limits reasonable? Is this a lot of time? Sufficient?
For comparison, a forty-hour work week averages 167 hours in a month. 100 hours of GVC would be a half-time job, all meetings. I’m not sure why this limit. Conversely, men watch TV 2.8 hours daily, or about 84 hours monthly.
Seem like enough time for most people.
However these limits can hurt if video cutoffs interrupt…
Negotiating a peace treaty
The last stages of combat before leveling
Prepping for your final exams
Your wife is starting her tenth hour of labor
Virtual honeymoons (with a third or fourth or fifth person)
Your 2011 Oscar party (four hours, easy)
For workers who live on the phone or in meetings, it’s easy to imagine bumping into these limits.
Correction: Work month is closer to 167 than 220 (for most of us).
Jim Courtney calls. His video looks funny. He usually calls in hi-def.
And his head is extraordinarily big.
That’s what your head looks like at arm’s length.
Turns out he’s calling from his iPhone 4 at almost one in the morning.
He didn’t sound that great; nothing bad but not that SILK quality we usually get.
So I pulled up our stats.
Resolution was low: Jim sent 160×120 @ 30fps. Tiny size compared to 640×480 High Quality, and not nearly as nice as Apple’s FaceTime.
Codec: SILK_WB_3. Sample rates: e-16000, d-16000. So maybe we’re getting SILK processing but without any wideband audio. The audio is definitely going out over the data channel, like earlier Skype for iPhone apps.
Latency was great, about one tenth of a second for a round trip from greater Toronto where Jim lives to greater San Francisco where I do. You start noticing you’re not in the same room above that.
Then I spent an hour in bed with James Body. Starting about midnight my time, 8 in the morning in the UK. James is one of the driving forces behind Truphone.
I’d tried to use the new Skype on my iPhone 3GS but it crashed. First iSkype, then after retrying, my phone. Restarted the phone and everything works well but we’d moved on to me on Windows and James on his iPhone 4.
We caught up for an hour or so before his family got up, talking SMS arcana, Skype video quality, how Three benefits when kids use Skype feature phones while their parents don’t, and keeping an eye on his iPhone’s power dial. An hour of video calling used 40% of James’ phone’s full charge. That puts a crimp in using Skype for video calls while away from an outlet.
Now might be a great time to drop in to the Skype for iPhone forum on Skype.com. After you download the new Skype for iPhone 3.0. The video commercial, then the highlights, first look, screenshots and walkthroughs to follow.
From the iTunes site:
Improvements:
Make Skype to Skype video calls on Wi-Fi and 3G* (*Additional Data charges may apply)
Call Skype desktop users (Mac OS X or Windows) and other iPhone users.
Two-way video calls supported on iPhone 4, iPhone 3GS and iPod touch 4th gen.
Receive only video supported on iPad and iPod touch 3rd gen, with no camera.
Love the announcement about Facebook video chat powered by Skype. Lots of questions not answered. Here are a few. I’ll update with answers as they come in. 
Join the Skype 6.X Text Chat Room