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Google's One Pass: is it actually competing with Apple?

Google's One Pass: is it actually competing with Apple?

Yesterday, Google announced its new One Pass service for digital payments for news, just after Apple's announcement that it is introducing an in-app subscription plan for content-producers. It makes use of the existing e-commerce system Google Checkout: once users sign up for this they can make payments on the websites of participating publishers when they are signed in to their Google accounts.

Media General, Axel Springer, Gruner + Jahr, Nouvel Observateur's publisher, Prisa and Rust Communications are among those who have signed on.

Google has traditionally had a somewhat tumultuous relationship with publishers as a result of conflict over copyright, but has recently made an effort to present itself as publisher-friendly. And reactions from commentators to the latest announcement have largely been positive, though reserved in their enthusiasm. "Google is selling flexibility," as Nieman Lab's Joshua Benton said. Bundling with print shouldn't be a problem, and neither should all-access, all-platform subscriptions.

Google's 10% cut of subscription revenue is lower than Apple's at 30%, but still not low enough? Benton argued that 10% was still high, as Google Checkout fees are 2.9% plus a transaction cost. A Forrester analyst quoted by the New York Times said that "No publisher in their right mind would sign up to give away 10 percent of Web-based revenues." Google CEO Eric Schmidt said that the 10% fee "roughly covers our costs," the Wall Street Journal reported.

Although it seems clear that Google's announcement was timed to take on Apple, it is necessary to remember that One Pass and Apple's new service are not the same thing. Apple is launching a subscription system for sales of content within apps on its platforms, Google is launching an entire digital payment system, likely focused more online than on applications.

There is surely no reason why publishers might not want to use both: make in-app subscriptions available within Apple apps, taking advantage of the fact that 160 million users already have iTunes accounts and can make one-click purchases, and use Google's system online and for Android apps.

One of One Pass' first clients, Popular Science, is being offered for the same price for sale via Apple's new subscription system.

The New York Times specified that if publishers want to sell content via Android apps, they must comply with Android's revenue split which gives Google 30%. However, they can avoid selling within the app and direct customers to a website to make a purchase - something which Apple does not allow them to do.

As a system for online payments, Poynter's Rick Edmonds noted that One Pass positions Google in direct competition with Press+, Journalism Online's online payment system.

And Media General is planning to test both, Edmonds explained. The Richmond Times-Dispatch, the chain's flagship paper, will start to use One Pass later this year, and it is already experimenting with a metered model using Press+ at a daily in Hickory, North Carolina. The Richmond Times-Dispatch will use One Pass to put selected premium content behind a paywall.

Edmonds spoke to Gordon Crovitz, co-founder of Journalism Online along with Steve Brill, who said that he welcomes the competition but believes that his system is superior because it is neutral, and because it gives publishers exclusive access to customer data.

One Pass will share customer data, such as names, zip codes and email addresses with publishers, which makes it in this sense more appealing than Apple's plans, in which the data is only available if consumers opt in to share it. However, as TechCrunch reported, billing information will not be shared, and users can opt-out of sharing anything. With Press+, the publishers get everything.

So in the Apple-Google-Journalism Online battle, who will come out on top? Android is steadily increasing its market share in terms of number of devices shipped, but Apple's app store is still far larger and most publishers have focus on iPhone/iPad first strategies. Even if they are frustrated by Apple's conditions, can they ignore these 160 million iTunes users who are generally willing to purchase content, especially if Apple does not allow these potential customers to subscribe any other way? Google's flexibility and more favourable conditions will be welcomed, but this doesn't mean that publishers won't sign up to sell content subscriptions through Apple.

Source: Poynter, New York Times, Nieman Lab, Wall Street Journal,



Emma Goodman


2011-02-17 13:50

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