James Fallows had an article in Sunday’s New York Times about his experience using Skype, the wildly innovative Voice over Internet Protocol (VoIP) tool that is going to wreak havoc in the telecommunications business.
Based on the article, Skype appears to be something akin to instant messaging and peer-to-peer technology wrapped into a single program. This much is clear: this technology is truly disruptive in the best sense of the term. It will be extremely attractive to consumers and will force telephone and cable companies to innovate, obstruct, or die.
This will be interesting to watch. Anyone out there have any experience with Skype?
What makes Skype more disruptive than the AIM/iChat type messaging and voice chats is that it can hook into the regular phone system. You can call your aunt halfway across the country who isn’t into computers and she needn’t know that you are calling on the cheap.
And cheap it is: for a little more than a dollar US he called Italy for a half hour, a quick call to the Phillipines, and 5 calls within the US.
How is BellSouth going to make money off landlines? It’s hard to see… Providing DSL on their network which lets you run this service will kill the same service which is their bread and butter: wired phones. But if they don’t do it the cablecos will.
And fiber only makes it worse–for the Bells. If you run fiber to the home people will really have the bandwidth to bail on your phones service–and if you don’t throttle the huge bandwidth available they might even be able to do the same thing to the cables. But even then there wouldn’t be much money in it for the carriers. All that juicy cable profit starts to flow directly to the content providers as folks buy content directly from the providers or from “broadcasters” like realnetworks.
I wouldn’t be buying any phone company stock…
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