It’s no holds barred in the video chat war

Last week, the world’s most used instant messaging service WhatsApp added a new feature to its already popular platform. The Facebook-owned company launched a video calling facility which allows users to see others while talking. Just a few months earlier in August, Internet giant Google launched its brand new video calling app called Duo. A month later in September, Reliance Jio went commercial with its telecom services bundling free access to its video calling application JioChat.

While video calling applications including Microsoft’s Skype, Apple’s FaceTime and Google Hangout have been around for a while, the recent launches indicate a new war brewing in this space. The objective for these players is clear — to ensure users spend more time on the respective platforms. But that’s where the similarity ends.

Each of these companies has their own strategy. Google, for example, is going with a dual strategy where it’s positioning Hangouts as an enterprise tool while the recently launched Duo is for retail consumers. While Hangouts allows group video chat across devices, Duo is designed for one to one chat over an Android smartphone. FaceTime is only limited to Apple devices, which means that both calling and receiving parties need to have a similar device in order for the app to work. This is where Google and WhatsApp win the battle. But Skype, which has been around for over a decade, is available on everything — a phone, tablet, PC, TV and also across all platforms, be it Windows, Android, BlackBerry, iOS, Mac and Linux. Unlike WhatsApp, Skype is not tied to a phone number but to an email ID, which gives users flexibility. However, WhatsApp already has a billion users on its instant messaging platform and migrating them to video calling on the same app should not be very difficult. Besides, Skype is seen as a desktop application and users are shifting to mobile.

“Skype, which has been the leader in the space for many years will take a huge hit as users shift to mobile,” says Sanchit Vir Gogia, Founder, Greyhound Research. “The biggest winner will be WhatsApp because people need one platform for voice, text and video and would no more download multiple apps to do these things separately. While Facetime is popular on iOS, its lack of cross-platform support makes its adoption limited.”

Globally, these players have invested billions to stay on top of the game, inspiring some interesting M&A deals. Microsoft acquired Skype for a whopping $8.5 billion back in 2011 and Yahoo bought start-up OntheAir in 2012. SnapChat paid $150 million for American video calling service Looksery in 2015 and high profile Napster and Facebook investor Sean Parker relaunched Airtime, a group video and messaging app in April 2016. Of course, Facebook’s WhatsApp acquisition for $19 billion tops the charts.

Though the companies will be hoping that these big bets pay off, analysts say there are doubts whether video calling will truly take off in the way instant messaging did. The barrier may be psychological rather than technological. Anyone who has made a video call and seen themselves on the screen will know how awkward it can be. Equally, in the fast pace of modern life, it does not allow users to do two things at once the way texting or making a phone call can do.

“Video chat has anthropological issues. People do not like to be seen all the time while chatting,” tells Jayanth Kolla, CEO at Convergence Catalyst. “That’s something which prevents mass adoption of video chatting even though the technology has been there for decades.”

It is easy to assume that high 4G speeds will propel the use of video chat and that’s the key reason for so many companies to push the feature in countries like India.

However, studies show that even in mature markets like the US and Europe, where internet speeds are way higher, video chatting isn’t nearly as popular as voice or text chat.

The only player that has already made it a success is perhaps the Chinese app WeChat, but its growth can be primarily attributed to the near monopoly it enjoys in China. Restrictions on foreign applications such as Google and Facebook in China has made WeChat the default chat app in the world’s largest internet economy. That leaves it no competition to worry about, forcing every app developer to latch on to their ecosytem.

In the absence of support from any government, global players will just have to fight it out. “As 4G goes mainstream, video calling on mobile makes sense now more than ever. Combine that with better quality phone cameras and you get the kind of experience you could previously get only on desktops. That’s spurring the battle for video chat applications,” Gogia said.

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