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EVO's Qik Video Chat to Cost an Extra $5 a Month... Seriously?

According to a source of ours inside Sprint, the EVO 4G's $10 premium cost doesn't seem to cover the Qik video chat capabilities, as previously thought.  As you can see in the screenshot below, the service will be cost a $4.99 premium, payable via PayPal.

AndroidGuys Benjamin Rubenstein

Context & Ripple Effects

Qik has been pushing downmarket since its feature-phone expansion in October 2008, and video calling is the marquee software feature of Sprint's HTC EVO 4G — the flagship launch device for a WiMax network that, per Sprint's own February statements, still exists only in a handful of cities with at least eight more markets promised within the year.

AndroidGuys reports, via a claimed inside source, that the phone's $10 premium data add-on does not cover Qik after all: the service will run $4.99 a month, billed through PayPal. The detail matters because Sprint CEO Dan Hesse said in March 2010 that bills would shift from voice minutes toward data and usage over roughly two years — and here is a data-plan-era device already getting nickel-and-dimed per feature.

First-order effects

  • EVO 4G buyers expecting video chat 'included' face an unbudgeted $4.99 monthly charge routed through PayPal rather than their Sprint bill — a friction point at launch for Sprint's most important handset of 2010.
  • Qik gains a direct consumer revenue stream on Android, converting what was pitched as a headline hardware differentiator into a subscription line item.

Second-order effects

  • Rival handsets and carriers can now position free video calling as the counter-offer — Skype's free-consumer model is the obvious pricing benchmark buyers will hold against a paid Qik tier.
  • PayPal deepens its role as billing rail for mobile micro-subscriptions, following its recent iPhone app revamp and Bump payments tie-up, collecting fees on charges that bypass carrier billing.

Third-order effects

  • If the pattern holds, carriers and OEMs unbundle software capabilities into à-la-carte subscriptions stacked on top of premium data plans — the capability-tiering model Hesse's data-centric billing forecast pointed toward.
  • Feature-priced video chat sets up a consumer backlash dynamic: every subsequent 'is it included?' dispute raises scrutiny of what premium data fees actually buy.

The trend: Mobile carriers are moving from flat premium data plans toward per-feature subscription tiers, with video chat as the first high-profile test case.