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August 10, 2006, Arthur C. Cole,
TMCnet Contributing Editor
First there was Vonage, which charged users
directly for VoIP service. Then there was Skype,
which gave it away for free. Now there is a
third business model in the works that offers
free minutes in exchange for watching IP video
feeds.
Globe7 has just come out with the Globe7
3.0 soft phone for the desktop that allows users
to download real-time video feeds ? such as
movie trailers, news and sports ? anchored by
30- or 60-second ad spots. The more video is
viewed, the more minutes are added to the user?s
VoIP account.
?It?s ad-supported, but the motivation is that
users get the kind of video content they want,?
said David Buchanan, CEO of te-na-city, a Venic,
CA, -based firm that manages the advertising
for Globe7. ?Everything happens in real time,
so the credits are applied immediately.?
In addition to pulling content from Globe7?s
library, which is tied to the Associated Press
archive, users can upload their own content
on 1 GB of secured space.
Globe 7 launched the service earlier this month
and has since registered about 18 million downloads
of the software, according to the company?s
Web site. Registration is free and there are
no monthly costs. In fact, Globe7 starts each
new service with $1 of phone time. Customers
can either view the videos to earn minutes or
pay directly into an account.
?We?re finding that people like to use the ad
service, which is fine with us,? Buchanan said.
?The ad revenue sometimes comes in the form
of a strict branding type of arrangement, payed
by the number of impressions that are made,
or sometimes it?s in combination with revenue-sharing
opportunities.?
One example of revenue-sharing is a partnership
with LiveNation, a live-event promoter that
will provide two-minute clips for download on
the Globe7 platform. Globe7, in turn, will receive
a share of the revenue generated by customers
who link to the LiveNation web site and order
a full DVD.
Buchanan added that an ad-supported market is
the next logical step in VoIP evolution.
?You have Vonage (News - Alert), which has no
ad-revenue model and has acquired about 3 million
users. But they lost $190 million last year,?
he said. ?And then you have Skype (News - Alert),
which gives most of its service away for free,
and I think we learned in the dot-com bust that
free is not a viable business model. At some
point, you have to pay for things like call
termination, long-distance fees??
The company is planning to launch a Wi-Fi version
of the system within the next two months. The
?hard phone? system will reside on a PDA, allowing
users to make phone calls, surf the web, email
and all the other tasks that the PDA offers.
In the meantime, Globe7 is actively pursuing
relationships with a number of hardware, software
and service organizations, as well as VARs and
resellers, to integrate the platform onto their
product lines. The company recently signed a
private label agreement with Lycos Phone, allowing
the platform to be distributed under the Lycos
brand.
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Arthur Cole is a freelance writer specializing
in high-tech information and communications.
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