Skype Sets Video Beta Launch

Voice over IP darling Skype is slated to put its two-way video phone service to the public test in August, likely at the end of the month, has learned.

Sources close to the company said Skype is slated to launch the public beta next month and that it has licensed compression codecs from On 2 Technologies , a video compression technology pioneer.

The company’s VP6 compression codecs are already in use by Macromedia for optimizing video on its Flash platform, as well as other major Web players such as, which is aggressively ramping up its video offerings online.

Skype’s video calling service, which was given a brief public viewing at the Always-On conference in San Francisco last month, is a video-enhanced PC to PC phone service and is expected to be free when it is offered commercially.

The Luxembourg-based Skype counts about 46.8 million users of its software that enables free phone calls from Skype-enabled computers. Since the company aired a sneak preview of its video service last month, sites have been buzzing about when the public beta would launch.

The service offers broadcast quality viewing so callers can watch each other while talking on their PC-enabled Skype service. Compression techniques by the On2 codecs are key aspects that enable broadcast quality video calls.

On2 Technologies said it had no comment about the beta and doesn’t comment on products not yet in full release. However, On2 just announced Wednesday the release of VP7 Personal Edition, which it calls a free personal-use version of VP7 Video for Windows encoder. More than 600,000 users have downloaded On2’s VP6 video compression software.

Kelly Larabee, a spokeswoman for Skype, said the company has not yet announced a release date for the public beta.

The alpha release from last month is ongoing, along with internal testing, she said. Larabee would only confirm the consumer beta release would be soon.

As to whether the video phone offering will be free or part of the company’s SkypeOut premium service when it is released commercially, expected later this year, Larabee said that decision will be announced when the company makes the beta version publicly available.

“We want it to be something people are comfortable using and that everybody can use. It will be a consumer product first and foremost,” she told

“We weren’t the first to deliver Voice over IP, but we were the first to deliver it in a way that’s better quality than before, and in a way that just works. That’s our goal with video.”

The release is sure to get the attention of Vonage, the N.J.-based VoIP provider, which began packaging the Packet8 videophone product with its broadband telephony service last year. The Packet8 desktop phone uses a broadband connection to transmit audio and video and was initially listed for $299 plus a $29.95 monthly fee for the service.

The Skype video calling beta comes as video compression techniques are enabling an explosion of video services over the Web. has launched video search as part of its recent portal launch. Google recently added moving pictures to its video search beta service.

Broadcast outlets such as CBS are ramping on their online presence, while cable outlet has gone back to offering free video on its site and is ramping up new premium video offerings, expected to be launched in early September.

With broadband penetration expected to hit 50 percent in the U.S. alone by the end of this year, according to Forrester Research, it was only a matter of time before video calling over the Web would be unleashed.

Skype would be a likely candidate to bring the first free video calling service to the world. Since the launch of its free, PC-to-PC calling service in 2003, the company’s growth has been white-hot. It now counts 46.8 million users of its free calling service, which connects users of the Skype software for PC to PC calling.

It also counts 1.6 million paid customers for its premium offering, SkypeOut. SkypeOut allows calls from computers to regular landline or mobile telephone numbers and lets users purchase credits that are applied to per-minute calling at rates that are typically lower than those for traditional phone service.

On Wednesday, Skype announced that it would lower its rates by an average of 15 percent in order to celebrate the one-year birthday of the SkypeOut premium service. The SkypeOut global rate is currently about 1.7 cents per minute.

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