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September 06 2012

Commerce Weekly: Mainstream mobile payment a decade out?

Here are a few stories that caught my attention this week in the commerce space.

Gimmick to mainstream — the difference a decade can make

With Square teaming up with Starbucks, PayPal partnering with major chains like Home Depot and McDonald’s, and all the hype and speculation around the new iPhone having or not having NFC to facilitate payments for Passbook, mobile payments are getting a lot of ink. But when will mobile payments be fully mainstream? Not for at least 10 years, writes Christina Bonnington this week at Wired. Bonnington points to slow adoption and infrastructure holdups as the major bottlenecks:

“Forrester Research estimates only one-fourth of U.S. consumers will own an NFC-enabled phone by 2016, with 100 million shipping in 2012. Until a solid majority of consumers own such devices, merchants have little incentive to create an infrastructure as receptive to smartphone payments as it is to cash and credit cards.”

Bonnington notes that credit card companies are pushing for merchants to upgrade their systems to accept contactless payments, but as analyst Mark Hung told her, this alone could take up to a decade. Bonnington points out that even after that happens, mainstream mobile payments will still face obstacles similar to those that credit card payments face now: competing platforms that force consumers to carry multiple credit cards to accommodate merchants who accept MasterCard and Visa but not Discover, for instance. Imagine a merchant accepting PayPal and whatever Apple develops but not Google Wallet or Isis. Adding to the chaos, processing fee distribution between banks and hardware/software developers will need to be sorted out, she says, as will agreements on how data gathered via mobile payment will be handled.

In a similar vein, Chris Ziegler at The Verge also argued this week that mobile payments are not ripe for the mainstream and pointed to the ultimate hurdle: consumer frustration and distrust. Ziegler shares a personal experience that highlights the cumulative result of the issues Bonnington noted together with the unreliability of cellular networks: even mobile payments in stores that are set up to accept them don’t always work. Until mobile payments become as reliable and ubiquitous as cash and credit cards, he argues, they’ll remain a gimmick.

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Wal-Mart tests mobile checkout, cashes in with new search engine

Wal-Mart joined the likes of JC Penney the Stop & Shop grocery chain when it began testing a mobile checkout service this week. Chantal Tode at Mobile Commerce Daily reports:

“The new Scan and Go [iPhone app] service is being tested at a single store in Arkansas, according to published reports. While customers will be able to scan items with their iPhone, they will not be able to pay via mobile at this point. … The mobile checkout service is currently being tested by employees at the Arkansas store and has not been rolled out to shoppers yet. Users will be able to transfer a list of items they have scanned to a self-checkout kiosk and then pay in one step.”

The motivation behind the new service, Tode reports, is to shorten customer wait times in line and to reduce the checkout area footprint.

Wal-Mart also reported this week that Polaris, the search engine it custom built for its website, is now fully rolled out in the U.S. Nidhi Subbaraman at Fast Company took a close look at how the search engine works:

“One of the ways Polaris is designed to augment the search experience is by treating search terms as categories. So, a search for ‘garden furniture’ may not serve up results with the word ‘garden’ in it, but would offer up suggestions and options for hardy and rainproof, garden-friendly furniture.

Another interesting feature of the search engine is that a product’s popularity on social media sites plays a role in its resulting search display. Sri Subramaniam, VP at WalmartLabs, told Subbaraman “[t]his ‘product popularity score’ is essentially like a Google page rank.” Right now, Subbaraman reports, the search engine integrates with product placements and “Likes” on Facebook, but “[a] product’s popularity on other social sites like Twitter or Pinterest could also one day feed into Polaris’s radar.”

So far, the search engine has proven successful for Wal-Mart — according to a post at Reuters, Wal-Mart reports a 10-15% increase in search conversion (the number of customers who make a purchase after searching on the site) since the rollout of Polaris began a few months ago.

Project Oscar gets a thumbs up

The European Commission approved a mobile wallet scheme this week that it began investigating in April as a potential monopoly. The joint venture by Everything Everywhere, O2 and Vodafone, called Project Oscar, was called into question by UK mobile phone network Three when it was shut out of the venture and by wallet competitors Google and PayPal.

According to the BBC, the Project Oscar founders plan to “release a unified smartphone-based service offering an alternative to cash, credit cards and loyalty cards,” and intend to “create a new company and begin hiring staff ‘as quickly as possible,’” though no launch date for the new wallet has been set.

Tip us off

News tips and suggestions are always welcome, so please send them along.

Commerce Weekly is produced as part of a partnership between O’Reilly and PayPal.

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June 01 2012

Publishing News: HMTL5 may be winning the war against apps

Here are a few stories that caught my attention in the publishing space this week:

The shortest link between content and revenue may be HTML5

HTML5 LogoA couple weeks ago, MIT Technology Review's editor in chief and publisher Jason Pontin wrote a piece about killing their app and optimizing their website for all devices with HTML5. That same week, Lonely Planet's Jani Patokallio predicted that HTML5 would nudge out the various ebook formats. This week, Wired publisher Howard Mittman shot back in an interview with Jeff John Roberts at PaidContent, insisting that apps are the future, not HTML5.

Roberts reports that "[Mittman] believes that HTML5 will just be part of a 'larger app experience' in which an app is a storefront or gateway for readers to have deeper interactions with publishing brands." I'm not sure, however, that readers need yet another gateway (read: obstacle) to their content, and recent movements in the publishing industry suggest HTML5 may be the more likely way forward.

This week, Inkling founder and CEO Matt MacInnis announced the launch of Inkling for Web, an HTML5-based web client that brings Inkling's iPad app features to any device with a browser. The app and HTML5 technology in this case are intertwined — all content previously owned in the app can now also be accessed via the web, and activity will sync between the app and the web, so notes made on the web will appear in the iPad app and vice versa. MacInnis says in the announcement that the launch is a big part of the company's overall vision to provide service to anyone on any device they choose, one of the major benefits of choosing HTML5 technology.

Also this week, OverDrive announced plans to launch OverDrive Read, an open standard HTML5/EPUB browser-based ebook platform that will allow users to read ebooks online or offline, without having to install software or download an app. Dianna Dilworth at GalleyCat reports on additional benefits for publishers: "Using the platform, publishers can create a URL for each title. This link can include book previews and review copies, as well as browsing capabilities and sample chapters."

In the end, it will all come down to what it always comes down to: money. Roger McNamee's latest piece, "HTML 5: The Next Big Thing for Content," takes a very thorough look at HTML5 in general and specifically in relation to content publishing (this week's must-read). As to money, this excerpt stood out:

"The beauty of these new [HTML5] 'app' models is that each can [be] monetized, in most cases at rates better than the current web standard. Imagine you are reading David Pogue's technology product review column in the New York Times. Today, the advertising on that page is pretty random. In HTML 5, it will be possible for ads to search the page they are on for relevant content. This would allow the Times to auction the ad space to companies that sell consumer electronics, whose ads could then look at the page, identify the products and then offer them in the ad."

As it becomes more and more likely that ads will be incorporated as a revenue stream in ebooks, publishers will embrace whatever technology draws the shortest line and the most avenues between content and revenue, which at this point is looking more and more like HTML5.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

MIT students present news reporting solutions

MIT Media Lab students were busy this week presenting final projects for their "News in the Age of Participatory Media" class. Andrew Phelps at Nieman Journalism Lab highlighted a few of the interesting projects, which were required to address a new tool, technique, or technology for reporting the news. One student proposed modernizing the hyperlink by attaching semantic meaning to it; another suggested a Wiki-like idea for correlations to put impossibly big numbers — the $15 trillion U.S. national debt, for instance — into context for readers.

The growing importance of data journalism makes another student's suite of tools called DBTruck particularly interesting. As Phelps explains, users can "[e]nter the URL of a CSV file, JSON data, or an HTML table and DBTruck will clean up the data and import it to a local database." The tools also let you compare arbitrary data to provoke deeper insights — in testing, the student discovered a correlation between low birth weights and New York state communities with high teen pregnancy rates, a connection that might not have been otherwise discovered.

Penguin and Macmillan deny participation in an illegal conspiracy

Publishers Penguin and Macmillan responded this week to the Department of Justice's (DOJ) antitrust lawsuit filed earlier this year against the two publishers and Apple (Apple responded to the lawsuit last week).

The New York Times reports that in Penguin's 74-page response (PDF), it "called Amazon 'predatory' and a 'monopolist' that treats books as 'widgets.' It asserted that Amazon, not Penguin, was the company engaging in anticompetitive behavior, to the detriment of the industry."

Laura Hazard Owen called Macmillan's 26-page response (PDF) "shorter and more fiery" than Penguin's. She reports:

"'Macmillan did not participate in any illegal conspiracy,' Macmillan's filing says, and 'the lack of direct evidence of conspiracy cited in the Government's Complaint is telling…[it is] necessarily based entirely on the little circumstantial evidence it was able to locate during its extensive investigation, on which it piles innuendo on top of innuendo, stretches facts and implies actions that did not occur and which Macmillan denies unequivocally.'"

Related:

May 25 2012

Publishing News: Kindle Fire and "your ad here"

Here's what caught my attention this week in the publishing space:

Kindle Fire home screen may be for sale

Kindle FireRumors flew this week saying Amazon plans to launch an ad campaign in which it will sell ads on its Kindle Fire home screen. Jason Del Rey at AdAge reports:

"Amazon is pitching ads on the device's welcome screen, according to an executive at an agency that Amazon has pitched. The company has been telling ad agency execs that they must spend about $600,000 for any package that includes such an ad.

"The ad campaigns would run for two months and also include inventory from Amazon's 'Special Offers' product. For $1 million, advertisers would get more ad inventory and be included in Amazon's public-relations push, according to this executive and an exec at another ad agency.'"

Del Rey says that "[b]oth agency executives have so far declined to participate, citing several concerns. For one, Amazon isn't guaranteeing the number of devices that the welcome-screen ads will reach, telling agencies that it hasn't decided whether the ads will start popping up on devices that have already been purchased or just on new devices."

O'Reilly GM and publisher Joe Wikert assessed the situation on his Publishing 2020 blog. He says this is just the beginning and that other ebook retailers are going to suffer:

"Given that Amazon's goal is to offer customers the lowest prices on everything, what's the next logical step? How about even lower prices on ebooks where Amazon starts making money on in-book ads? Think Google AdWords, built right into the book ... At some point in the not too distant future I believe we'll see ebooks on Amazon at fire sale prices. I'm not just talking about self-published titles or books nobody wants. I'll bet this happens with some bestsellers and midlist titles too. Amazon will make a big deal out of it and note how these cheaper prices are only available thru Amazon's in-book advertising program. ... Imagine B&N trying to compete if a large portion of Amazon's ebook list drops from $9.99 to $4.99 or less. Even with Microsoft's cash injection, B&N simply doesn't have deep enough pockets to compete on losses like this, at least not for very long."

Wikert concludes by asking: "Why wouldn't Amazon follow this strategy, especially since it helps eliminate competitors, leads to market dominance and fixes the loss leader problem they currently have with many ebook sales?"

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

Apple calls foul on the DOJ

Apple this week filed a reply to the Department of Justice's antitrust lawsuit that was filed in April against Apple and five major publishers. PCWorld reports:

"Apple's reply to the court is in line with a statement issued by Apple in April after the DOJ filed its case, in which it said that 'the launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry.' The company added: 'Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore.'"

The filing, entitled "APPLE INC.'S ANSWER," opens:

The Government's Complaint against Apple is fundamentally flawed as a matter of fact and law. Apple has not 'conspired' with anyone, was not aware of any alleged 'conspiracy' by others, and never 'fixed prices.' ... The Government sides with monopoly, rather than competition, in bringing this case. The Government starts from the false premise that an eBooks 'market' was characterized by 'robust price competition' prior to Apple's entry. This ignores a simple and incontrovertible fact: Before 2010, there was no real competition, there was only Amazon.

Reuters reports that in the filing, "Apple also denied that the government 'accurately characterized' the comment attributed to [Steve] Jobs." The DOJ's complaint (PDF) states:

"77. Apple understood that the final Apple Agency Agreements ensured that the Publisher Defendants would raise their retail e-book prices to the ostensible limits set by the Apple price tiers not only in Apple's forthcoming iBookstore, but on Amazon.com and all other consumer sites as well. When asked by a Wall Street Journal reporter at the January 27, 2010 iPad unveiling event, 'Why should she buy a book for ... $14.99 from your device when she could buy one for $9.99 from Amazon on the Kindle or from Barnes & Noble on the Nook?' Apple CEO Steve Jobs responded, 'that won't be the case .... the prices will be the same.'"

Apple's filing responds:

Apple denies the allegations of paragraph 77. The Government mischaracterizes on its face the alleged statement of Steve Jobs to the press on January 27, 2010, which simply conveyed that a publisher would not have a particular eBook title priced at $9.99 through one distributor and $14.99 through another. Apple's MFN provision would allow it to require the publisher to lower the price to $9.99 on the iBookstore. Apple had no contractual rights to require a publisher to require that it, or any distributor of its products, charge more for eBooks than it chose in a competitive market." [Reference link added.]

You can read Apple's reply in its entirety at Scribd.

It's time to hack digital covers

Hack the CoverCraig Mod (@craigmod) mused on book covers recently in a piece on his website called "Hack the Cover," which also is available as a Kindle Single. He says the way we search for and discover books has changed:

"The covers ... on Amazon.com are tiny on the search results page. Minuscule on new books page. And they're all but lost in the datum slush of the individual item pages. Great covers like Mendelsund's design for The Information disappear entirely.

"Why? Because — What do we now hunt when buying books? Data.

"The cover image may help quickly ground us, but our eyes are drawn by habit to number and quality of reviews. We’re looking for metrics other than images — real metrics — not artificial marketing signifiers. Blurbs from humans. Perhaps even humans we know! And within the jumble of the Amazon.com interface, the cover feels all but an afterthought."

Mod argues that since readers can approach a book from any number of entry points, the entire book should be viewed and treated like a "cover":

"The covers for our digital editions need not yell. Need not sell. Heck, they may very well never been seen. The reality is, entire books need to be treated as covers. Entry points into digital editions aren't strictly defined and they're only getting fuzzier. Internet readers don't casually stumble upon books set atop tables. They're exposed through digital chance: a friend tweeting about a particular passage — and linking, directly, into that chapter ... To treat an entire book as a cover means to fold the typographic and design love usually reserved for covers into everything. Type choices. Illustration styles. Margins and page balance."

Mod's piece is a must read this week.

Related:

May 13 2012

Googles eigenwillige Vorstellung von Meinungsfreiheit

In den USA laufen derzeit kartellrechtliche Ermittlung wegen des Vorwurfs, Google würde die Suchergebnisse manipulieren bzw. gezielt eigene Produkte bzw. Inhalte die von Google-Plattformen stammen, bevorzugen.

Google hat diesbezüglich ein Rechtsgutachten in Auftrag gegeben, das zu einem interessanten Ergebnis gelangt. Diese gezielte Einflussnahme auf Suchergebnisse sei von der Meinungsfreiheit gedeckt, argumentiert der mit dem Gutachten beauftragte Rechtswissenschaftler Eugene Volokh, denn ebenso wie Zeitungen oder Lexika müsse Google das Recht zugestanden werden, eine redaktionelle, thematische Auswahl und Gewichtung vorzunehmen.

Abgesehen davon, dass man mit diesem Ansatz jedwede Wettbewerbsverzerrung rechtfertigen könnte, womit das Kartell- und Wettbewerbsrecht letztlich hinfällig wäre, ist dieser Ansatz für Google zumindest aus europäischer Sicht noch aus einem Grund brandgefährlich.

Denn wenn Google eine redaktionelle Arbeitsweise für sich reklamiert – was mir in der Tat neu ist – dann müsste dies natürlich auch eine Verschärfung der Haftung von Google mit sich bringen. Denn nur bei einem neutralen und rein technischen Informationsvermittler lässt sich eine weitgehende Haftungsfreistellung für die in den Suchergebnissen angezeigten Inhalte begründen. Wer solche Inhalte allerdings gezielt und nach journalistisch-redaktionellen Kriterien auswählt, der muss dann auch eine Haftung für die dermaßen geprüften Inhalte in Kauf nehmen.

Möglicherweise hat man die Argumentation Googles beim Landgericht Hamburg ja mit Interesse gelesen. Google kratzt damit m.E. aber auch an dem bisherigen (Selbst-)Verständnis von Suchmaschinen.

(via presseschauder)

December 09 2011

Publishing News: Agency pricing, out of the pan and into the fire

Here's a look at the publishing stories that caught my attention this week.

Antitrust investigations focus on Apple and publishers

ibooks2.jpgOn Tuesday, the European Commission opened an antitrust investigation into pricing deals struck between Apple and five international publishers: Hachette Livre, HarperCollins, Simon & Schuster, Penguin and Holtzbrinck (the publishing houses were raided back in March). The Bookseller reports:

The Commission said it would investigate whether publishers and Apple had engaged in illegal agreements or practices that would restrict competition, and would also examine "the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books," with "concerns that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices."

On Wednesday, the U.S. Justice Department confirmed it, too, was investigating.

Reuters provided the background for these investigations:

Publishers adopted the agency model last year when Apple launched the iPad, allowing publishers to set the price of the sale of e-books. In turn, they would share revenue with the retailer. In the past, publishers would sell ebooks on a wholesale model for 50% of the retail price ... In the traditional "wholesale model," publishers set a recommended retail price, but the seller is free to offer deep discounts.

Bloomberg reports that "Publishers' deals with retailers are also under scrutiny."

Publishers need to get a grip on their data and take control of their advertising

Google_logoDavid Soloff at Advertising Age took a look this week at declining advertising revenues for newspapers and magazines and placed the blame squarely on the publishers. Soloff writes:

Publishers have not generated much of the almost infinite supply of channel-choking inventory, but they have also done next to nothing to preserve what is good and proprietary and "premium" about their own inventory. In some cases, they have chosen lowest common denominator ad networks, exchanges and supply side platforms to do the hard work of selling.

He says publishers need to regain control of their advertising inventories and that "big data tools can dig them out of the undifferentiated, over-supplied, machine-driven nightmare of the sell side." His take on how to put the "premium" back in premium content is well worth the read.

Publishers may want to get a grip on their data and take control of their advertising sooner rather than later. Google's retail push against Amazon may very well have consequences for online ad revenues, particularly in the retail space. Ken Doctor over at the Nieman Lab took a look at Google's plans to enter the retail/ shipping business and its possible implications. He points out that "[r]etailers don't want to advertise; they want to sell stuff," and he says there's no loyalty in advertising:

Give [retailers] new routes to sell stuff, and deliver it more cheaply than they could before, and they'll migrate their ad/marketing/lead generation dollars. So, if Google can really make it easier to personalize, routinize and make more efficient the selling process, it will place itself between the seller and the buyer. As it does that, it replaces the newspaper as middleman, further reducing much of the revenue that is keeping newsrooms staffed, even if many of them are now half-staffed at best.

Read it Later identifies the most-read authors on the web

Read it Later recently passed 4 million users. Earlier this year, the service used data gathered from its users to look at online reading behavior and how it's affected by the "time shifting" content afforded by mobile technologies. This week, the company released a new study identifying the most-read authors on the web. The study looked at data gathered between May and October 2011, which was based on 47 million-plus saves, according to the report.

Who came out on top? Have a look:

Read It Later's most-read web authors

The study also looked at longevity and loyalty — the authors with the best return rates, or those with stories readers returned to in some way. The report points out that "[t]he most interesting thing isn't just that we found different authors for the top 'return rate,' but also different categories of content and types of publishers."

Author return rate

The full report can be found here.

TOC NY 2012 — O'Reilly's TOC Conference, being held Feb. 13-15, 2012, in New York City, is where the publishing and tech industries converge. Practitioners and executives from both camps will share what they've learned and join together to navigate publishing's ongoing transformation.

Register to attend TOC 2012

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