Wednesday, February 16, 2011

Google looks to lure publishers with 'One Pass', lower commission rate; Google Music service to launch with upcoming Android 3.0 upgrade (Honeycomb)

Hoping to capitalize on the controversy surrounding Apple's subscription policies, Google unveiled its own payment system called One Pass. The system will take a smaller portion of revenues generated, ten percent, than Apple's in-app purchasing system.

Google's system is the antithesis of Apple's rigid system: Google One Pass promises "business model flexibility", allowing metered access, day passes, per-pay article charging, and multi-issue packages. It also allows publisher to issue 'coupons' to existing subscribers in order to give full access to a publication's print customers.

"Google One Pass operates across multiple sites, so you can easily manage content across all of your online properties," Google claims on its website. "It also offers payments in mobile apps, in instances where the mobile OS terms permit transactions to take place outside of the app market."

Google One Pass will have a limited impact on tablet editions so long as the iPad rules the roost. Many tech writers have placed their Android hopes on Motorola and its upcoming XOOM launch. But Motorola said today that its WiFi only model will retail for $600 unsubsidized, and its 3G model at $799. (Apple's WiFi models start at $499, and its 3G models start at $629.)

Until the Android tablets can effectively compete with Apple's iPad, Google stands a better chance of attacking its Silicon Valley rival more effectively on smartphones, where Android currently holds a market share advantage. That is why the decision to launch Google's competitor to the Apple iTune store with the upcoming launch of Honeycomb seems odd. The Guardian quotes Sanjay Jha, chief executive of Motorola Mobility, as saying that the new service is tied to the introduction of Honeycomb, a version that will first be seen on new tablets.

Nonetheless, Google is quickly lining up media delivery capabilities that will seriously compete with Apple. How is this going to be possible? By driving the price to zero -- the usual Google business strategy.

For Google, the goal is increasing eyes, if they have to give away the products, whether that be the mobile operating system, or decreasing or eliminating the commission on media sales, they will. Conversely, Apple is banking on its user interfaces continuing to attract consumers to their products. Whether Apple holds an 80 percent market share of tablet owners, or a 20 percent share, Apple is banking on media companies continuing to want to reach those readers, listeners or viewers.

Update: Rick Edmonds has a post on that mentions that Media General will use One pass at its Richmond Times-Dispatch newspaper. It is currently using the Journalism Online pay system at its Hickory, North Carolina property.

In this regard, One Pass could be both competition for Apple's subscription system as well as competition for Steven Brill's Journalism Online model, though I continue to have my own doubts about the concept of metered paywalls. I will say it again . . . we'll see.