Placing a Valuation on Skype Premium’s Video Conferencing

SkypePremiumHeaderWhen Skype announced that Group Video Calling would require a Skype Premium subscription, there was questioning as to why this service was not another free one. On the other hand I have encountered many Skype users who have recognized the value and taken up a subscription. A couple of recent posts that review the entire group video conferencing market space demonstrate that Skype Premium with Group Video Calling is actually a significant business disrupter for some of the major players in this market.

Scott Wharten, CEO of Vidtel, has been developing video calling products for the past several years. Recently Vidtel launched its MeetMe service which allows video conferencing interoperability across several video calling platforms. In that post I provided an image of a MeetMe conference call as viewed in the Skype for Windows client. This is a service for small to medium businesses that opens up the potential for interoperable video conferencing at a cost ranging between $199 to $599 per month, depending on the number of seats and video resolution desired. Other than an appropriately supported platform at each user end point no additional participant or customer investment is required. MeetMe’s main feature is that participants can use Skype, CounterPath Bria, GTalk or several end user platforms from the “major players” on one call.

Yesterday Scott put out a post, What’s wrong with the video conferencing industry, where he laments the failure of the larger players, Cisco, Polycom and Logitech’s Lifesize, to innovate with new platforms while maintaining significant hardware and service costs that can only appeal, at best,  to larger enterprises. He feels these companies are missing out on opportunities in the small-to-medium business market. His summary statement:

But increasingly, the numbers show a different story. The big guys all reported flat revenue year over year from 2011 to 2012. And it’s not that people are shying away from video conferencing. They are using a ton of it, growing by leaps and bounds. It’s just that increasingly, I believe most business people are looking hard at the difference between these very high quality but massively overpriced and complicated devices and saying that the alternatives on a PC or tablet are just good enough.

GroupVideoChat.15June11.250pxwWhich comes back to Skype Premium and its Group Video Chat service. Here is a video conferencing service that:

  • supports up to ten participants in a call
  • simply requires a standard Skype client on a Windows or Mac PC for each participant
  • only requires the host to have a Skype Premium subscription
  • supports screen sharing by one of the participants
  • includes a concurrent chat session
  • requires standard “off-the-shelf” Skype-certified webcams that support VGA (or High Quality Video) resolution
  • uses Skype’s SILK technology for crystal clear audio
  • includes Live Chat support, and
  • includes unlimited SkypeOut calling across the subscriber’s local country code

at a cost of $9.95 per month, reduced to $4.99 per month for a 12-month subscription.

It’s a long way from the $1,000 per hour cost of video conferencing services that were available a decade ago; access to video conferencing no longer requires that participants go to a specially equipped (often off-site) video conference “studio”. It’s just available at your desktop. Between MeetMe and Skype Group Video small to medium businesses now have an opportunity to use video conferencing to build their businesses worldwide at a very low cost, whether for internal meetings, small customer presentations or reviewing customer projects.

I participate in a weekly Skype Group Video call with participants on three continents where the conversation is almost as if we are sitting around a conference table together. It’s not just the video images but also the audio quality that makes these calls so realistic.

Bottom Line: I first encountered a Video Conferencing setup in March 2007 when I attended CeBit. Either Cisco or Polycom had a booth showing three very large flat panel displays combined into a demonstration of their “new” video conferencing offering for enterprises. I forget the actual cost of an installation but it was high six figures (>$500K). Scott’s blog post has put the evolution of video conferencing in perspective. Today small to medium businesses can meet most of their group video conferencing needs through services such as MeetMe and Skype Group Video calling at costs that are affordable to not only the small businesses but also “prosumer” professionals running their own consultancy.

Andy Abramson puts in his perspective: Taking Aim and Telling the Truth

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About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.

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