VoIP's Negative Economies of Scale
from the what-goes-up-must-come-down dept
The Stalwart has an interesting take on VoIP players like Vonage and Skype: their plans that allow free calls to other subscribers are "negative economies of scale" that will limit the companies' success. The thinking is that if everybody gets on Skype, or everybody gets on Vonage (granted, that's a big if), all calls will be free. It's less of a problem for a service like Vonage that has a monthly charge, but it's a real problem for free services, like Skype. Maybe that's why Skype is pursuing other revenue streams, like, um, ringtones.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Think Small Miss Small
What the hell? Somehow I can't imagine Americans getting worked up about some politician's night out to a pizza parlor -- if anything, the scandal would be that he ate at such a cheap place. Well I don't know, maybe in Hawaii or somewhere? Some sumo-ish Hawaiian politician ordering a huge stack of pizzas for his extended family?
http://www.excite.co.jp/News/odd/00081128598243.html
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Re: Think Small Miss Small
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Incorrect Terminology
By using the term "negative economies of scale", The Stalwart is saying that the cost of providing Skype or Vonage increases as more people use the service. That is not necessarily true and that is not really what The Stalwart means. They are really saying that since Vonage and Skype make money when their users connect to non-Vonage and non-Skype systems, should all phone users be on Skype (or Vonage) that Skype (or Vonage) will make no money. This is a revenue issue, not a cost issue, therefore, using the term economies or diseconomies of scale is, well, wrong.
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Re: Incorrect Terminology
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Re: Incorrect Terminology
Overall, the story seems like yet another of the increasingly common and frustratingly useless wastes of media bandwidth where the writer does nothing more than demonstrate a thorough lack of knowledge or understanding of the subject matter.
The VOIP providers are in "land grab" mode, just as the cellular providers of the late 90's. They're trying to get subscribers to encourage new subscribers to join, to "save" money in calls. Two to five years from now, the VOIP providers will suffer the same churn problem as conventional telecoms, then they'll embark on a crusade of conquest customers, then loyalty programs and finally they'll resort to the worst of all possible worlds for a technology service provider ... gasp ... quality of service ... oh hell of hells!
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doesn't matter
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Re: doesn't matter
I'm not so sure. Vonage has a WiFi phone for sale already, and has had this phone for purchase for at least a few months.
http://www.vonage.com/wifi/
And with the increase of WiFi whole city coverage (i.e. WiMax, or whatever WiFi innovations that come along), this may actually become a real concern for both cell phone companies and local landline phone providers (POTS). Why pay long distance and roaming charges when you can talk for "free" with Vonage? (well a nominal monthly fixed fee, for now, until they have that coveted ogopoly)
http://www.wimaxforum.org/news/downloads/WiMAX-The_Business_Case-Rev3.pdf
Tampa and a few other cities already have free city-wide WiFi coverage (I've never seen it or used it in Tampa, but they say it exists, but probably just in the downtown districts for now).
http://surfzone.sagonet.com/map.html
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Re: doesn't matter
Yeah, but the technology supplying wireless mobile communications may not always be GSM/CDMA etc. Can you say WiMax? Or even wireless technologies that haven't even been invented yet?
Mobile access to the internet may become extremely cheap or even free in the future. WiMax + VOIP = alot of cheap or free calls.
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It's all Free if you are smart enough to read !
Has had free calling for years ! If you look at the opensource package of asterisk the power is in your hands! There are many other great programs but asterisk is the one I use. With it companies/individuals are hooking up every day routing calls over the net bypassing the local currupt tax systems and even more providing better services than what can be purchased from the best fortune rip you off 500.
Do your research people linux and opensource have opened up the cottage industries that can and are taking down the big dogs every day !
If you don't believe it then you are be paid to be stupid.
Brian@loser.com.
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flawed premise
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Re: flawed premise
After your $20+ish broadband charge.
Assuming vonage's EULA contractually obligates them to provide unlimites service.
http://www.techdirt.com/news/wireless/article/5963
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Skype rules!
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negative economies of scale
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skype
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VoIP
VoIP still uses IP and width band, and compression algoritms: technologies that now are over 10 years old and are improving more and more
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VOIP...Vonage
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