Last week EBay’s Skype announced a new “unlimited calling” plan. Starting in January, the company will charge $30 for a year of unlimited SkypeOut calls to any phone numbers in the U.S. and Canada. (They’re offering an introductory rate of $15 if you sign up before the end of January.)
This brings an end to about 8 months of free SkypeOut calling to all numbers in North America, and it’s not a surprise — since last May, Skype has said that these calls would only be free through the end of 2006. So no one should be shocked that Skype is starting to charge again.
Users don’t have to pony up the $30 upfront either, since it appears that pay-as-you-go SkypeOut rates, which charge users by the minute, will still be available for calls to the U.S. and internationally.
But Skype’s move is still very risky. Traditionally, letting customers get used to a free service and then suddenly charging them to access it is a losing maneuver. Britannica killed its customer base in 2001 by shutting off free access, Napster users deserted the service in droves when it switched to a paid model in 2001, and more recently Textamerica came in for withering criticism when it switched to a paid model earlier this year.
Even though Skype has said all along that free calls to North America were a temporary thing, you can bet that many users have forgotten that. These users, when they suddenly find they can’t call Mom in Ohio or Grandma in Toronto, are going to look for alternatives before they pony up $30 or even $15. That spells a big opportunity for competitive Internet phone services, from Yahoo Voice to Jajah to MSN Messenger: Offer free calls to landlines starting in January, and then scoop up the customers as they flee from Skype.
Skype can cover some of the risk by keeping the pay-by-the-minute scheme in place. Many users already have some SkypeOut credit stored up. If they don’t, the minimum purchase for credit is just $10. So even if paying by the minute is ultimately less economical than the unlimited plan, the perceived risk is much lower, and this may encourage people to stick with Skype.
Still, the overall impression is that Skype is going from free to paid. That perception could wind up being very costly.