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Skype Prime is the Wave of the Future

Just announced Skype Prime allows you to charge a caller for speaking with you.  All calls start out as free and then go to a paid basis when and if the caller agrees to the rate you want to charge.  Rates can be either on a time basis varying from $.50 to $2.50 per minute or can be anywhere from $.50 to $12.00 per call.  Payment is made with Skype credits and credit balances can be withdrawn via PayPal.  Oh yeah, Skype keeps 30% of the revenue for its pains.

The service is aimed at consultants today.  A commenter on Michael Arrington’s post about the new service predicts, correctly I think, that more than 50% of their revenue in the first year’ll be from phone sex.  That is what happened with 900 service from the old phone companies.  But Skype Prime has potential much greater than that (and phone sex IS a big industry); this service could justify the price that eBay paid for Skype.  This integration of Skype and PayPal may turn out to brilliant, perhaps beyond what eBay even anticipates.  This is your chance to charge telemarketer for calling you!  And they’ll pay.

Here’s the deal: ever since the first phone, phone companies have charged the people who call you for that privilege.  That charge obviously resulted in revenue for the phone company but it also kept down the number of annoying and unwanted calls.  As the price for calls went down, the amount of telemarketing went up.  Nevertheless, marketers ARE willing to pay to reach prospects – after all, that’s what advertising and selling are all about.  Usually the marketer pays some intermediary in order to reach you.

We get paid indirectly today for allowing ourselves to be reached.  We get entertainment in return for watching ads (at least preTiVo).  We get free web content; we get Google searches.  All this paid for by the people who want to reach us.  Sometimes we do get paid directly: listen to the timeshare pitch and get a free lunch or even a night or two somewhere; get a free something in return for giving up your email address.

The world has changed.  If calls begin and end on Skype, no phone company collects termination charges from the caller.  We pay for the network that is used when we pay for out Internet access.   The good part is that the calls are free; up until now the bad part was also that the calls were free.  In theory at least SPIT (Spam over Internet telephony) could become a huge business if Skype numbers were to become public.

Here’s my prediction: many people will set up Skype Prime based call services.  They’ll put information in their profiles which attracts telemarketers.  Telemarketers will learn who the best prospects are both from the profiles (some of which will be lying) and by accumulating lists.  You’ll adjust the rate so that you’re pleased, not annoyed when you get a telemarketing call.  I would have charged a lot less when I was in college – buy me a beer – then I would today; but I was worth less than as a prospect, too.  BTW, the minimum needs to go down and the maximum up but that’ll happen.  Also there needs to be a way to eliminate the free beginning of the call; but that’s a nit.

Before long this’ll spread to email (also provided by eBay?) and instant messaging.  It’s already available for Skype video calls.

On the web, nothing succeeds like disintermediation (and sex).  Marketers always pay to reach prospects.  Prospects often have an inducement to be reached.  What could be simpler than to have the marketers pay us prospects directly?  Good for the marketers; good for the prospects.

Michael Arrington points out that there is already a service called Ether which charges only 15% for this service.  But, as Michael also points out, Ether doesn’t have Skype’s installed base nor does it have PayPal as a corporate sibling.  You need network critical mass to get this going and that is what eBay bought with Skype.

I’m gonna buy some eBay stock.  Probably shouldn’t have told you before the market opens.

I was initially skeptical of eBay’s purchase of Skype.

But I did predict callers getting paid.

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» Will Skye Minutes Become Fungible? from Hitchhiker's Guide to 650
Not now . . . but it will get there. Last week, Skype launched the long rumored/ expected/ in development Skype Prime service(via TechCrunch). Using Skype Prime, users can charge to recieve a call. Even before the skype acquisition, (aug 2005)... [Read More]

Comments

john

Wow, Skype came out with something innovative. With the age of high speed internet companies like http://nationwide-t1.com are competing with the big boys.

Ivan Veretelnyk

There is a site for skype prime users and peoples who seek advice - http://primeskype.com/ .

Ivan Veretelnyk

There is many "charge for call" platforms , but they all have own software and not promote Skype Prime. There is site that was build to work with only Skype Prime and no additional software needed. If you are interested please visit
http://www.primeskype.com/

Fred Welsh

Skype has an interesting concept of introducing more exclusive features to those who pay for Skype Prime. But as you put it, it favors "sex calls" which some may view as a sinful crime. Customers should browse through other VoIP services before choosing Skype Prime.

http://nationwideLD.com

Dean  Collins

It seems everyone is glossing over the 30% cut for Skype (and to rebut the person who stated low call value - irrelevant there is almost zero processing friction here so doesn't really matter if 100 X $1 calls OR 2 x $50 calls).

For an automated process like Skype Prime it just doesn’t make sense for the cut to be as high as 30%.

In one of my professional lives people ask me about mobile content and what is it specifically that enables i-mode in Japan to have such a healthy ecosystem of mobile content providers whereas in the USA it’s practically stillborn.

Simple answer – every content provider gets the same commercial terms regardless of 1 or 1000 downloads, every commercial term is 10% of the gross revenue.

I think Skype will suffer from a lot of side deals being made once people establish a rapport in the first few minutes of the transaction then get together to cut Skype out of the deal.


Regards,
Dean Collins
dean@mexuar.com
+1-212-203-4357 Ph

---------------------------------------------www.Mexuar.com
Want to voice enable your website?
Use Corraleta to reach your customers in 10 seconds or less.

Neil Hinrichsen

This is a brilliant concept that is sorely needed in another domain - that of email.

Imagine if everyone had to buy "stamps" for email. I could then set my email client to accept mail from everyone on my contacts list with no postage, and to only accept other emails that had a minimum of X cents worth of stamps. Emails that arrived without enough stamps would simply be returned to the sender with a "Sorry insufficient postage - minimum of X cents required" message. Even if most people set their threshold at only a couple of cents, this would instantly destroy the economic model for most large-scale spammers.

This idea was floated some time ago for email by amongst others Bill Gates (see http://www.cnn.com/2004/TECH/internet/03/05/spam.charge.ap/).

Dylan Salisbury

Tom, your e-mail address is nowhere on this site. To demonstrate your point, I think you would include it if you had this type of service for e-mail. What would your price be?

Alon Cohen - BitWine

Hi Tom

Interesting concept. The high commission has to do with fraud and charge-backs pains. So does the fact that they pay 4 months later.

At BitWine (www.BitWine.com) we developed a Skype Extra (accessible from within Skype to every Skype user). We provided more advanced personal billing capabilities, we actually managed to circumvent the fraud problem and hence we will be able to charge much lower commissions (so far we do not charge any).

We also have no limits, up or down, on the call pricing, and we added a nice searchable directory.

So far I have not seen the future you predict happening. What we see is honest people providing paid services.

I do agree though, the application you suggest sounds intriguing.

Your Colleague from VocalTec
Co-Founder of BitWine
Alon Cohen

Paul Sweeney

Just an absolutely spot on analysis. Just blogged you on this. Again, maybe you should coin the term "Telemarketing 2.0" :)

Aswath

I would think the reason the charge is this high is because Skype anticipates that the transactions will be of low value. Otherwise, the two parties will settle the payment independent of Skype. Even if the value is low, repeat businesses will also do the same. These points occurred to me after I bought some stocks and payout was only slightly better than what I got in the recent Mega Lottery. :-)

Seriously though, there is a need for a tool that allows two concurring parties to settle micropayments over the net.

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