This is a problem that has bothered me for a while. You hear complaints that “millennials” don’t know how to talk on the phone. Messengers seem to have all the growth these days. It appears having a live conversation with someone in another location, a real time communication (RTC), has completely lost out to asynchronous forms of communication.
I have spent most of my career working to make RTC better — was that a waste? Should I be working on something else? Is there any chance for growth after peak telephony, the point at which RTC has peaked, or should we just give up?
Below is my quest to quantitatively figure this out.
What does the data say?
Having come from a quantitative analyst background, I am always looking for good data sources to measure trends. Now that I am independent I no longer have access to expensive datasets, but fortunately the best sources are often public.
Peak Telephony in the US
Let’s start by taking a look at the situation in the US, one of the world’s largest communications markets and where I happen to live. The Consumer Telecommunications Industry Association (CTIA) provides a public annual update that often (but not always) includes Minutes of Use (MoU) and subscriber data. The data shows that on a subscriber-level, mobile telephony usage already peaked on a per-subscriber basis in 2007. Interestingly it had a bit of a resurgence in 2013, but dropped again in 2014.
Meanwhile, mobile penetration has never been higher, hitting 110% in 2014. As mobile devices get cheaper it is more practical to have more than one, so it is also interesting to look at MOU on a per-capita basis to normalize against multiple devices per-person. The Per Capita data shows a rosier picture with a peak in 2013, but a first-time decline in 2014.
I suspect the bump in 2013 is due to the near ubiquity of all-you-can eat minute plans bundled with cellular data with unlimited talk (see the FCC’s US cellular plan summary here).
Note this is happening during a backdrop of an increasing number of wireless-only households — 47% in 2014. Fixed-line MOU, as measured by traffic via common carriers, has been declining steadily every quarter by an average of 3.4% since 2012 (see my sheet).
Peak Telephony in the UK
It is not just in the United States. The UK’s Ofcom (more from them soon) shows mobile cellular voice growing slightly, but nowhere near enough to offset the declines in fixed-line usage:
The evidence that at least regulated Real Time Communications is declining is definitive. Even when per-minute usage is essentially with many plans, free people are talking on the phone less.
What about non-traditional VoIP?
Cell phones and landlines are not the only way way we communicate in real time. Regulators do a bad job of including RTC technologies that are not tied to a regulated service provider’s subscription packages, such as VoIP services like Skype. Let’s call the regulated/carrier-provided VoIP traditional and everything else non-traditional.
Fortunately the UK’s Ofcom provides some insights on VoIP usage outside of just those services provided by traditional carriers. In 2014 Ofcom published a media usage “diary” analysis in 2014 of 1644 adults over the age of 16 who were asked them to keep track of their media and communications usage.
The report has a lot of great data, but one thing it shows is that VoIP usage is on the rise with a larger proportion using video than voice. The most popular VoIP platforms in this survey were Skype, WhatsApp, FaceTime, Viber, and Hangouts.
Overall RTC usage
Ofcom also asks about overall communications usage, independent of the medium on which it is used. Voice communications averaged around 5% of time use. Phone calls were also one of the items other than TV that everyone seemed to use at least once per week. In terms of time-use, phone calls ranked #6 at about 29 minutes a day — behind TV, radio, email, games, and other app-related activities. Interestingly, when Ofcom cuts the dataset differently to exclude non-users of a given activity (so you are you not averaging 0’s into the dataset), phone calls drop in rank to #16 below nearly every kind of modern electronic media:
Email, social networks, IM all beat phone calls in usage among communications activities. Interesting the relatively few who use video calls do so for roughly 25 minutes a day.
Notably, the younger demographics communicate more.
People aged 16–24 spend a greater proportion of communication time, compared to the general population, using social networking sites (25% vs. 18% for all adults) and also spend a greater proportion of time photo or video messaging (5% vs. 2% for all adults). This age group also spend a far greater amount of time communicating overall — almost four and a half hours a day, which is over an hour more than any other age group.
However, this does not mean they talk on the phone more. They use many means of communication — mostly text based methods — not just voice RTC. Voice, which is more dominant in older age brackets, has less of a share in younger brackets:
A Gallop poll among US consumers on their communications preferences provides a similar data:
Note American ‘youngsters’ in the 18 to 29 category made about the same amount of calls as 30 to 49 year olds— they just did it on their cell phones.
Phone Calls are important
So does this mean phone calls are doomed? Surprisingly, when asked to rank each activity by importance, Phone calls ranked #1 overall by good margin:
I could not find a cut of his dataset that compared age groups, but other questions seem to indicate younger segments rank text messaging higher in this category.
Non-traditional VoIP
Microsoft reports that Skype makes more than 3B minutes of calls per day. That comes to more than trillion minutes a year — the CTIA reported 2.5 trillion for US mobile users, so this is a significant number, but certainly not a enough alone to swing the overall usage trend by itself.
Apple does not release any figures for its FaceTime service introduced in 2011, but presumably its usage is meaningful, but less than Skype’s based on user surveys like Ofcom’s.
In addition, there are a number of new and growing entrants to the VoIP market. Facebook claimed its messenger service has 10% of mobile VoIP share. A source indicates Facebook messenger is running more 130M minutes/day which could put them close to the 50B minutes/year mark. A small fraction of Skype, but not bad for a service that has only launched the to limited geographies in early 2013 with a larger universal push last year. With only about 12% of its 800 million users using the feature, Messenger certainly has a large room for growth and seems to aspire for much more.
WeChat, Line, and Viber all have more than 200 million monthly active users with various VoIP features. Another Facebook property, WhatsApp, has more than 900 million MAU and launched its own VoIP calling feature last April to accompany its messaging. If it can match Facebook Messenger’s success it certainly will have meaningful RTC usage too.
Doing the math..
There is a lot of data and it is not all totally clear, so let’s recap:
- Traditional carrier telephony appears to be doomed
- RTC is getting decent usage, but has lots of competition from messaging forms of communication, especially in younger demographics
- Phone calls are still ranked the most important form of communication
- New VoIP-based apps and features are growing rapidly
The real question for me is :
Can app & feature-based VoIP, in all its new and exciting forms, reverse the trend of declining RTC usage?
Unfortunately we do not have granular detail on non-traditional VoIP services, but we can make some ball-park estimates. In the US that means making up for 10’s of Billions of minutes a month. With Skype running somewhere near 90B minutes a month, mobile VoIP in the 40B monthly MOU range, and the major US footprint of these services, it certainly seems plausible that VoIP services may halt the decline in RTC usage.
Realistically traditional RTC will continue to decline in mature markets. It is unlikely to go to zero — there is still a market for fax afterall — so there will be some leveling out. Non-traditional VoIP is growing and presumably will catch-up at some point as more of the market shifts to the newer technologies and methods. I believe we are near a stasis point in the US if we are not at it already.
Of course this is one country, so variations will exist by geography with countries like India continuing to show strong traditional telephony growth.
Changing RTC definitions will help
Technologies like WebRTC are helping to change the definition of RTC. Telephony used to constrained by an apparatus known as a phone. Then, with the growth of the app stores, VoIP apps have been gaining increasing popularity. Today the medium of RTC continues to change as apps themselves add RTC as a feature as Facebook Messenger, WhatsApp, SnapChat, and countless others are doing.
Soon every app that wants to allow RTC between its users or its users and employees will be able to do so with ease. When using RTC becomes as easy and usable as messaging — if that proves to be possible — we may just see it used more.
Security cameras used to be governed by CCTV technology. Then they moved to streaming web technologies. Today they are increasingly using RTC technologies. Do we count WebRTC-based security camera streams that are viewed by a property owner as RTC minutes? How about when that stream goes to a network-based recorder? How is a stream from a robotic toy or baby monitor counted?
Finding new things to converse with
RTC’s fundamental challenge is people. There is only so many of us and it is only really practical for our limited brains to fully consume a single stream at once. That leaves with a theoretical maximum of 312 Trillion monthly minutes.
Machines do not have these limitations. We can make far more connected devices than people and they can pump out communications all day. Depending on who you ask and how they count, there will be around a dozen to several dozen Billions connected things in the not too distant future. It certainly does not make sense to strap a microphone and camera on every connected device, but even if it RTC makes it way into only a few percent of these devices the impact on overall usage would be huge. Hardware is getting cheaper and technologies like WebRTC are getting easier to embed as processors improve, so there will be little reason not to add RTC if makes any sense.
The last big question I have is “will machines use RTC with other machines?” As computer vision algorithms move from analyzing static images to stored videos to real-time streams, RTC starts to fit. These algorithms often resemble the way the human brain works, so it may make a lot of sense to leverage technologies originally made for transmitting RTC between people for inter-machine transactions too.
It’s not time to quit yet..
So let’s go back to the question in the title of this article — Does RTC matter if no one wants to talk to each other? The evidence suggest people do want to talk to each other. Younger demographics do not call as much as they did in the past, but they are not abandoning calling all together. Calls are still the most important way to communicate.
Just as the web and smart phones have changed and greatly expanded text communications, new RTC apps and RTC-embedded as a features are redefining telephony and spurring a new growth for RTC. And that’s just for people. If mixing RTC with IoT does indeed make sense then the RTC volumes discussed may be insignificant compared to what our programs handle.
