in the vein of chartreuse, “or why vonage sucks, and you should short it all the way to zero”

Skype, a division of eBay, recently announced free calling to anyone in the US. What does this mean? Well it means that one company has just changed the face of an entire industry by giving away something that costs them maybe a penny or two to provide (remember they were charging 2cents a minute before hand). Skype has just done for communication what email did to snail mail, it shrank the market.

Now the cost of adding a phoneline to your business is $30/year (for a skypein number), and you get unlimited calling in the US. What does this mean? Your infrastructure costs for running a call center/tech support line are dropping down to little more than the cost of the host computer and internet access. Leasing both, and your costs could be $50/person (leasing a cheapo computer - $30+skype # $3+ portion of internet access) + salary (excluding space, of course). That means the barriers to entry are getting even lower now. Skype hasn’t just shrunken the voip/telephony market, they’ve shrunk hundreds of phone based markets.

Skype is changing the game folks, and if you aren’t keeping up with this, then you need to get off your ass and adapt.

The cost of calling someone is now as low as the cost of email, and we all know a voice is more effective than something that might be filtered out as spam. So get calling everyone.

Oh yeah, vonage = money losing potential (the market they were supposed to be defining, just got pulled out from under them).

This is more of a addendum to the previous post, rather than a self-standing post. So if you didn’t read the earlier treatise on podcast advertising figures, then check that entry first.While i thought i had carefully crafted my logical fiscal analysis of the podcasting issue earlier, i realized one thing I had missed while talking to a fellow entrepreneur about the concept of file serving and storage mechanisms for consumers. The cost is not in the storage, its in the bandwidth. The bandwidth was a factor I considered from the getgo, but had always attributed storage costs to each individually delivered podcast, when in fact its a declining cost.Think of it in basic accounting terms, if you’re going to ammortize the cost of the land (the hard drive space), you can do so over the lifespan of the property (each podcast). So instead of factoring a fraction of a cent per download ($.15/GB storage on amazon S3), you are really looking at it as a declining cost. So the initial podcast serving is the most expensive one, but everyone thereafter is subsequently cheaper to deliver (note these calculations do not account for CPU cycles or stuff like that, as I’m not even sure how to measure those).So as a result of these amortizations of costs, the storage costs are spread out across each delivery, so your costs per might go from $.005 to $.003 to $.002, which may seem like a whole lotta argument over nothing, but in fact adds up (think a million times). With these renewed figures in hand, podcasting becomes a more appealing medium for a broadcaster as his/her costs are no longer fixed at a certain fee per ad (which would’ve necessitated the CPM to be high to profit).Stay tuned for more posts this week as I will be opening up more of the details on castvertising.com, and maybe giving you guys a peek behind the curtains.

So its been quite a while since i talked about podcast advertising here (mainly because I’ve been so busy, and also nothing new was being talked about in this market).Well today we’re going to look at how the numbers break down in podcast advertising (now remember, this is based on pre-launch figures). The basic premise of podcast advertising as I see it now is something similar to radio and tv ads, in which they are passive audiences that are reached by the thousands. Unlike radio and tv, where there is no way of selling your ads to an exact number of people (you have to hope the ads you bought months prior will reach as many as the network claims), podcasting offers precision download statistics, thus making a CPM (cost per thousand) model the ideal way to go.Using a CPM model we can effectively compute the revenue we generate per podcast. So for simplicity sake, lets assume a cost per thousand of $10 (which is probably at the low end of the scale). This means for every podcast downloaded, we are charging $0.01. 1 cent folks, this is a rounding error for most people, but here it isn’t about the pennies, its about the aggregate.So now that we’ve got our income, how much does it cost to host a podcast? Well if you were to use your run of the mill shared hosting, and figured for $20/month you can host 1000 podcasts (1000 x 10MB each = 10GB of traffic), then it is effectively costing you $.02 per podcast to run this show (all other costs excluded for this argument). By using the scale we’re looking to provide at castvertising.com, you effectively group the buying power and scale advantages that large scale webhosting has to offer. So with that in mind, we can effectively lower the distribution costs to a fraction of a cent. Only through use of economies of scale can the podcast advertising be both cost effective to advertisers (you don’t want them priced out of the equation), and profitable to the podcaster himself.Got any thoughts? discuss!

With the embedding of video increasingly easy to do (with flash’s near universal support), and the availability of content growing every day, it seems as if every website will become its own lineup of video. So on that note, I’m embedding video here today.

Ok so anyone have any idea why wordpress keeps fucking my embedded videos up? HTML mode, WYSIWYG mode, it doesn’t matter!