July 9-10, 2013
San Francisco, CA

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The New York Times announced today that it’s adopting a new growth strategy that involves offering customers lower pricing to access its content.

The move comes as the company reported some pretty weak Q1 2013 earnings that saw its advertising (both digital and print) decline by 11.2 percent year-over-year. The publication saw its lowest rate of digital subscription growth (5.6 percent) since implementing a mixed freemium/paywall content business model. The publication currently has 676,000 digital subscribers, who pay $200 -$495 per year for access.

Most of the industry keeps a very close eye on the NYT’s digital subscription rate because it could present a new way for news publications to pay the bills given that it’s becoming increasingly hard to rely solely on advertising income.

As for a growth strategy, the company plans to offer its most popular content under a less expensive subscription plan and potentially let customers subscribe to specific sections at a lower price. The NYT is also planning to add a more expensive subscription plan that gives readers deeper access to the publication in both digital and print forms.

Additionally, the company said it sees an opportunity for growth in “brand extensions” — in other words, sponsored or endorsed content, products, or services.

Photo via New York Times

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Malcolm CasSelle is CEO of MediaPass.

In the nearly 20 years that the Internet has grown into a mostly commercialized entity, many smaller media companies haven’t bothered to test whether an ad-supported business model is the most lucrative way to monetize their content.

But if your company isn’t one of the largest web publishers in the world, you may want to consider monetizing your content by *gasp* charging people for it.

The reality is that 90 percent of advertising revenues are concentrated in the top 50 publishers. So, if you’re Arianna Huffington, Harvey Levin, Henry Blodget or Perez Hilton, you’re probably doing okay. But if you’re not converting millions of eyeballs into millions of dollars in ad revenue, the traditional ad-supported free content model simply isn’t going to work.

Source: IAB

Image Credit: IAB Internet Advertising Revenue Report – first half 2012 (PDF)

Venture capitalist Mary Meeker’s influential annual Internet trends report has relayed other sobering statistics when it comes to online advertising.

Effective advertising rates are $3.50 CPM (cost per 1,000 impressions) on desktop, and a fraction of that number on mobile. Meanwhile ad revenue for newspapers — the bellwether for the health of traditional advertising — was surpassed by online advertising, according to Meeker’s report. The problem is, these newspapers are fighting for scraps of revenues with digital-only publications by the thousands.

Worse yet, both performance-based ads and real-time ad exchanges drive down the average cost-per-click (CPC), and the traditional gold standard for the industry itself, Google’s CPC , has declined 15 percent year-over-year for the past three years. With the move to mobile apps that deliver even less revenue per user, the current method for making money via ads  is an apparition at best for the overwhelming majority of site owners.

On the other hand, charging for content is a business model that consistently beats revenue on a per page basis, sometimes by an order of magnitude. Site subscriptions and a per-article fee is akin to paying for an all-you-can-eat Rdio subscription (after trying for free), or on a per-song basis like iTunes. These two models work not just for the top 50 sites, but for most sites that bother to do it. Smaller sites with targeted, loyal audiences see effective advertising rates of $ $20 CPM or more. To that end, newspaper after newspaper has been forced to go to a subscription model to stay afloat financially.

Image Credit: Mary Meeker, KPCB

YouTube recently announced premium channels that could eventually offer its content partners the ability to charge a subscription for access. Netflix has always followed the paid subscriptions model, and now has the resources to invest in original content like House of Cards. It stands to reason that many other video sites will soon follow suit. There is value in charging for access, and content providers that don’t will fall behind their competitors in terms of revenue. And with fewer revenues, those providers won’t be able to cover the costs of acquiring (or creating) the most popular content.

And for smaller publishers with quality content, charging for access is hardly impossible.

If you ask someone why they would buy a subscription to blog, video, or news site, I often hear it is partially because the price is comparable to something a cup of coffee. And that low price is well worth it because site does its job by keeping them dutifully entertained. This is an even easier sell when you consider that the majority of digital media consumers have a shrinking attention span and devoted less time to consuming information through traditional channels like newspapers and broadcast news outlets.

People are willing to pay for the content that relays information efficiently and effectively – it must be poignant, timely, or unique. Monetizing a content service in this way becomes something of a self-fulfilling prophecy: people pay for content, and that money goes back into making the overall content even better.

Eye photo via Gilmanshin/Shutterstock

Malcolm CasSelle is the CEO of MediaPass, a leading, easy-to-use paywall solution for online content. Malcolm earned his BS in Computer Science from MIT and MS in Computer Science from Stanford.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Subscription revenue is the new old thing, apparently.

Flickr — remember Flickr? — charges $6.95 a month to share your photos to the world, if you want pro functionality. Buffer, the social media sharing and analytics company, charges $10/month for anything beyond the freemium crumbs. And Dropbox goes from $10-50/month, just at the consumer level.

But subscription revenue has been around a lot longer than even the oldest dot-com. Aria Systems, a software-as-a-service billings platform, put together an infographic with all the subscriptions that the average American — you know, the person who lives next door and just got an Android phone — pays every month.

It’s a massive $857/month … mostly because of items that we don’t typically think of as subscription payments, but actually are. Things like insurance, a mobile phone plan, and utilities. Even the biggest one of all: health care.

Over time, startups can only hope that some of this revenue, most of which is dumped into the laps of massive contenders in yesterday’s economy, will come their way.

Here’s the visual data:

Guys: Dollar Shave Club says it’s trying to save your face — and your wallet

If you’ve used the Internet at any point in the last few months, then you’ve likely seen the promotional video for the company and its razors. The tag line: “Our blades are f**king great.”

Investors, it seems, feel the same way: Dollar Shave Club has netted $9.8 million in a Series A funding round led by Venrock.

The basic business model is this: Each month Dollar Shave Club sends customers the option of three razors, which are priced depending depending on the number of blades they have (the most expensive one, dubbed the Executive, comes with six blades, and runs for $9 a month).

For comparison, a pack of four Gillette Fusion razors costs $14.99. That may not seem like a lot of money, but it really adds up over time.

So far, guys have responded pretty well to the Dollar Shave Club approach. CEO Michael Dubin says that interest in the business has grown exponentially since the company’s relaunch in March.

With the funding, Dubin says the company will further increase its membership numbers and . A big part of that thrust will come from Canada, where Dollar Shave Club will expand to starting next week.

The big question with Dollar Shave Club, however, is this: Is it really even a tech company? Probably not, but the company has leveraged technology  to such an extent that its worth paying attention to for that reason alone.

Founded in 2001, Dollar Shave Club is headquartered in Venice, California. The company has to date raised $11 million.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Google just made Android an even more compelling option for app developers looking to make a buck. The company today is launching in-app subscriptions on Google Play, more than a year after it first brought in-app billing to Android.

By standardizing in-app billing, Google made it easier for developers to charge for virtual goods, upgrades, and the like. Now with the addition of subscriptions, consumers can opt into monthly or annual recurring payments, allowing them to keep getting content without the hassle of purchasing over and over.

“For users, Google Play provides a familiar and convenient purchase experience, highlighting subscription details such as price and billing interval before continuing with purchases,” Google Play product manager Ibrahim Elbouchikhi wrote in a blog post this morning. “After the transaction, Google Play manages recurring billing and keeps users informed of new charges, sending them an email with each renewal. At any time, users can visit My Apps in the Play Store app to view their subscriptions and cancel any subscription as needed.”

Google says it’s also offering an HTTP-based API that will let developers extend subscriptions beyond Android devices. You’ll be able to subscribe to something on Google Play, then get access to that same content via a desktop web browser. This is one pretty big difference from Apple’s in-app billing, though it remains to be seen how much developers will jump on-board.

In an interview with VentureBeat, Matt Carona, VP of product at the concert streaming app company Qello, said that the in-app subscriptions will be simple to implement, and “from a consumer standpoint it makes everything really easy.” Developers get a way to keep people paying, and consumers won’t have to bother with making as many manual purchases.

Photo via Tsahi Levent-Levi/Flickr

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Online retail giant Amazon is testing a new mobile app store service that lets users make purchases within the app itself, according to a report from BusinessWeek.

An Amazon-branded app store would compete directly with both Apple’s iOS App Store and the Google Play store (formerly the Android Market). Amazon’s platform appears to allow both in-app purchases/upgrades as well as subscriptions, according to co-founder of fitness company Skimble, Maria Ly, who has been a part of Amazon’s pilot program for about a month.

Amazon will take a 30 percent cut of everything sold within an app, Ly said. That commission fee is pretty standard for app store platforms, and it’s also the same rate Apple offers to its App Store and Newsstand clients.

It’s unlikely that an Amazon app store with this kind of functionality would be approved for use on Apple iOS devices, as it would undercut Apple’s own business. Google’s Android OS doesn’t discriminate against competing app stores, so it’s likely that Amazon would be able to really gain some traction there. Since Amazon already operates its own Android app store, presumably the in-app purchasing service would be a direct extension of that.

The biggest benefit of an Amazon app store would be in boosting media sales from owners of its Kindle Fire tablet. At $199, the Kindle Fire is a loss-leader and relies on purchases being made via the tablet to generate a profit. So, an Amazon-branded app store with in-app purchases seems like a natural fit.

We’re contacting Amazon for more information about the new app store service and will update this post with any new information.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Streaming music service Spotify is definitely planning to offer “family plans”, according to recent comments from Spotify Chief Content Officer Ken Parks.

Spotify users have been clamoring for a family subscription option of its premium service, which would allow multiple people to use the same Spotify account independently. Competitors like Rdio already offer family plans, which puts Spotify at a slight disadvantage.

Parks, who pays for three separate subscriptions in his own household, told The Verge that the family plans are definitely coming, but wouldn’t elaborate on the pricing structure or a launch date. He also said that the company’s goal would be to boost overall spending from each household, presumably, without cutting into the individual subscription revenue.

Spotify is built on a “freemium” business model where users can listen to unlimited ad-supported music for free during the first six months, and 10 hours per month thereafter. Ideally, the company wants to convert all those users into premium subscribers, which costs $5 – $10 per month. Depending on the level of access, premium accounts offer unlimited access to music, no ads, and the ability to use the service on mobile devices.

Spotify last reported that it reached a milestone 3 million paying subscribers in January — so the company is currently in pretty good shape without the added option of family subscription plans.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Online retailer Amazon has signed an agreement to offer select NBCUniversal TV and movie content to members of its Amazon Prime service at no additional cost, the company announced Thursday.

Access to the streaming video library is just one perk for Amazon Prime members. Membership, which costs $79 per year, also gives customers free or discounted shipping rates on all items purchased through the company’s website.

The NBCUniversal content licensing deal is the second Amazon has made this month. Last week, the company reached an agreement with CBS to add over 2,000 television shows to its library of content, which has close to doubled from 5,000 to over 9,000 programs since its debut in February. Financial terms of the deals were not disclosed.

Prime members can now watch Universal films like Eternal Sunshine of the Spotless Mind, Elizabeth, Babe, Flipper, Fear and Loathing in Las Vegas and several others.

Amazon is on its way to becoming the (albeit distant) third most popular streaming video service behind major competitors Netflix and Hulu — especially if it continues forging content licensing deals with media companies like Fox, ABC and Viacom.

Right now, Netflix is able to maintain its dominance because of the vast number of licensing agreements it has with media companies. The much younger Hulu is slowly catching up, having recently reached deals to add films from Miramax and The Criterion Collection to its streaming library.

However, if Amazon attains a comparable library of content, its streaming service could become the most attractive of the bunch. Unlike competitors, Amazon Prime membership has a low annual cost, offers additional incentives beyond the streaming service (shipping perks) and has no pre-roll advertising.

But, Amazon Prime doesn’t need to become the most popular in order to succeed.

The company’s strategy toward its streaming video business is similar to that of Walmart, which recently started selling streaming video rentals on its website. As a retailer, it can use the streaming service as a promotional spring-board to sell merchandise and digital media downloads.

Pictured is actor Johnny Depp in the 1998 film Fear and Loathing In Las Vegas.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

BBC Worldwide launched an iPad app today for its iPlayer streaming media service in 11 Western European countries, with Canada, Australia and the U.S. to follow later this year.

The global iPlayer service, which will offer BBC shows like Doctor Who and Top Gear on demand, is intended as a one-year pilot aimed at generating new income for the BBC , which first announced its intentions for a paid, iPad-only global iPlayer in December 2010.

A limited amount of content is offered for free on the service, but most content will feature pre-roll advertisement sponsorship.The bulk of its revenue will come from paid subscriptions but its core business model is subscription, with users paying €6.99 ($10) per month or €49.99 (about $72) per year.

The initial launch countries (Austria, Belgium, France, Germany, Italy, Luxembourg, The Republic of Ireland, The Netherlands, Portugal, Spain and Switzerland) will get a version of the iPlayer that does more than their British counter-parts. Subscribers will have access to the last 50 years of BBC programs and the ability to stream shows over 3G and Wi-Fi. Also, the international iPlayer has a feature allowing people to download programs to watch when an internet connection isn’t available.

The catch is that the content will only be available on the iPad for now, which could be a major roadblock to success for the global iPlayer. As a new Nielsen study reveals, the iPad is one of the least popular methods for watching video on both streaming video services Netflix and Hulu.

However, the global iPlayer isn’t in competition with Netflix or Hulu, said BBC.com Managing Director Luke Bradley-Jones in an interview with the Guardian.

Limiting the service to just the iPad was purely a commercial decision, Bradley-Jones said, adding:

“We hope that this service becomes multi-device, multi-platform and multi-territory over time, but as a premium-but-niche service, we did not want to go in with both feet from day one…” We’re spending the next year in a pilot-type phase focusing on one device, to make a clean and very compelling experience. We have a great relationship with Apple in terms of the promotional commitments they’ll give us too.”

Theoretically, subscribers that own a HDTV can buy a HDMI converter for their iPad to mirror the iPlayer video content on a larger screen. While workarounds like this aren’t always successful with the general population, the BBC’s original content could be strong enough to drive subscriber growth by itself  — regardless of how many devices the service is offered on.

“In terms of a ‘A to B’ comparison, we were surprised by how unsocial the Netflix users were,” said Mashwork founder Jared Feldman, who highlighted the large discrepancy between Netflix and Hulu’s total subscribers.

“Obviously [Hulu] is at a disadvantage because they’re late to the game, but Hulu has a social component the company is using to grow [its] subscribers,” Feldman said.

Mashwork filtered over 10,000 tweets mentioning people’s preferences regarding Netflix, Hulu Plus (Hulu’s paid service) and traditional cable services. The results revealed that 29 percent of the tweets preferred Netflix — 9 percent higher than the number of tweets preferring Hulu Plus. But considering how many more Netflix users there are, Feldman said he expected the percentage to be much higher over Hulu.

The data also indicated that many people have yet to try the Hulu Plus service, which means the company’s subscriptions could potentially grow much larger over time. Hulu itself is reporting higher than expected growth rates to its subscriptions, according to the company’s 2011 second quarter progress report.

Hulu recently relaunched Facebook integration that lets people comment on specific portions of a video using their Facebook account. The company’s first attempt at integration resulted in security breaches for some users, but the overall backlash was minimum.

“There is a lack of social media integration on Netflix. Obviously that’s a conscious effort the company has made for whatever reason,” Feldman said.

One reason Netflix isn’t as eager to add socialization features to its streaming service could be that its library of content consists entirely of licensed media from outside companies.

Hulu, on the other hand, has more of an ownership mentality, since three of the four partners that own the streaming service (Disney, Comcast and News Corp.) are media companies.

Below is an infographic displaying the results of the Twitter-data gathered by Mashwork. As the data shows, Hulu’s strong social media presence could make the company a serious video streaming service competitor in the future.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Months after Apple’s proposed in-app subscription rules riled up developers by attempting to lock them into its App Store ecosystem, the company has relaxed its stance considerably, MacRumors reports.

Apple is no longer forcing developers to price in-app subscriptions the same as external subscription plans, and most importantly, it’s no longer requiring developers to offer in-app subscriptions (from which Apple would get it’s typical 30 percent cut) when they offer subscriptions outside of the Apps Store.

Now, app makers won’t be forced to include in-app subscriptions if they offer subscriptions externally, and they’re free to price them however they wish.

The previous rules, understandably, caused considerable upset among developers. The rules would have made them take a greater loss on in-app subscriptions after factoring in Apple’s 30 percent cut. In particular, it could have had a significant effect on the likes of Amazon’s Kindle app, Netflix’s app, and other services centered on outside purchases and subscriptions. Now developers will have the freedom to price their in-app subscriptions at a premium to make up for the Apple tax.

This past week, the Financial Times dumped its iOS app in favor of a revamped HTML5 site. While the publication made no mention of Apple’s rules specifically, the move was a fairly transparent attempt to escape Apple’s clutches.

The rules were originally set to take effect on June 30, but Apple quietly updated its App Store Review Guidelines this week to nullify them. The updated rules read:

11.14 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app.

The only big restriction now is that apps can’t directly link to external stores. So while the new rules are better for most developers, Amazon will still need to remove the prominent “Kindle Store” button on its app.

The real question: What took Apple so long to make the change? Developers have been loudly railing against the restrictions since February. Apple would have seemed less aloof if it had acknowledged those criticisms and revised its rules months ago, instead of quietly pretending like nothing ever happened.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Sharing the user name and password of any streaming media account is now considered against the law in Tennessee, according to a web entertainment theft bill signed into law yesterday by state Governor Bill Haslam.

The bill makes it a crime for anyone other than account holders to log into services like Netflix, Hulu Plus, Rdio, or Rhapsody. It also empowers streaming media companies that identify illegal sharing to contact law enforcement authorities to press charges.

So, a college student who gives access of his Netflix streaming account to half the residents in a dormitory can now be punished, according to the bill’s sponsor Gerald McCormick.

But while the new bill allows for greater legal penalties, it’s unclear if streaming services will acknowledge the state law over its official terms and conditions.

“Netflix applauds any efforts to stave off video piracy. However, Netflix already has provisions in its Terms of Use that restrict passwords to the member’s household,” the company stated in regards to the state bill.

According to the terms of use, sharing an account password outside of a household will result in termination of the user’s subscription. Beyond that, the company can choose to terminate a subscription any time it chooses.

But even if Netflix did choose to exercise its right to press charges under the new state law, the streaming service’s restrictions don’t allow multiple streams to load on the same account. (The only exception to this is if a user subscribes to a plan that allows for multiple DVDs to be rented out at the same time. So, if a subscriber can rent up to five DVDs, his or her account is able to load up to five separate video streams before the restrictions kick in).

The state legislation seems to ignore the notion that the burden of preventing account sharing should be the responsibility of the streaming service and instead gives those companies more of an incentive to police the service for wrong doing. That approach is similar to the strategy most commonly used by the Recording Industry Association of America (RIAA).

So, it’s not surprising that the legislation was pushed by recording industry officials who want to put an end to the billions of dollars in losses they attribute to illegal file sharing. Tennessee’s capital is home to many of the major record labels, including Sony Music Entertainment, BMI, Warner Music Group and EMI.

While the bill doesn’t make very much sense for video streaming services, it could cause headaches for Tennesseans who plan to use a music streaming service. Apple, Amazon and Google have all announced plans to launch cloud-based music services, which record labels will have some degree of authority over.

July 9-10, 2013
San Francisco, CA

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As Apple tries to bring magazine publishers onto its iPad subscription plan, there are signs that the company may be showing an unusual amount of flexibility with its controversial rules.

The Wall Street Journal reports that Hearst Corp. has agreed to offer its iPad apps for Esquire, Popular Mechanics, and O, The Oprah Magazine for subscription prices of $1.99 a month or $19.99 a year, starting in July. It’s the first major magazine publisher to sign on to Apple’s subscription plan, which has been criticized pretty loudly for requiring publishers to give Apple a 30 percent cut (which is the standard split for apps in the company’s App Store), for placing restrictions on the subscriptions that publishers can offer outside the App Store, and for the fact that Apple controls subscriber information.

On the other hand, without Apple’s subscription plans, publishers will have to sell issues individually, which is not a great long-term model. Also, The Journal says that “publishers have become more comfortable with the terms” and that “Apple has shown more flexibility on pricing.”

PaidContent elaborated in an article of its own, quoting a Hearst representative as saying, “Our deal is fundamentally different from any other deal Apple has done with a publisher.” However, other sources apparently disputed Hearst’s claim that its deal was “substantively different.” (I emailed a Hearst spokesperson who told me, “We cannot comment further on the terms of our agreement.”)

So what’s going on? Well, it’s hard to say, but I’d guess that Apple is indeed showing a little flexibility, but not exclusively to Hearst. Meanwhile, Conde Nast is reportedly getting ready to bring subscriptions to its own iPad apps, perhaps beating Hearst. Time has also reached an agreement to bring its content to iPads for free to print subscribers, although it’s presumably still negotiating with Apple about how to offer subscriptions on the iPad itself.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

In a bid to wean online readers from reading the paper’s content for free, the New York Times finally announced its digital subscription plans today, starting at $15 for four weeks of access.

While certainly ambitious, and something that every online publisher will be paying attention to, the paper’s paywall plans seem both too expensive and too confusing to take off.

The $15 four-week subscription gets you unlimited access to the site on the web and via mobile apps on the iPhone, Android and Blackberry. A $20 plan offers four weeks of web and iPad access, and the paper will also offer a $35 all-access plan that will cover the web, phone and iPad. Existing subscribers of the NYT’s print edition will receive unlimited access to the paper via the web and mobile devices.

So how will the NYT avoid losing casual readers? Beginning March 28, the paper will allow visitors to read up to 20 articles a month for free. Once they hit the 21st article, they’ll be forced to choose one of the above subscription plans. The paper has already turned on the 20 article limit for readers in Canada to test out bugs before the US launch.

“This move is an investment in our future,” said Arthur Sulzberger Jr., chairman of the New York Times Company, in remarks to employees this morning. “It will allow us to develop new sources of revenue to support the continuation of our journalistic mission and digital innovation, while maintaining our large and growing audience to support our robust advertising business.”

So as not to completely lock out its content from search engines and conversation on the web, the NYT won’t count visits from search engines and social networking sites like Facebook and Twitter. Readers coming from Google will only have access to five free articles a day.

Judging from my Twitter stream today (which admittedly is full of media personalities), response to the New York Times’ paywall plans seems to be mostly negative. I can understand why. The $15 a month base price just seems too high in a world where $8 gets you unlimited access to thousands of hours of content on Netflix. Yes, the two companies do completely different things, but Netflix’s pricing is worth paying attention to: it’s more of a “why not?” type of price that consumers don’t think too much about, versus the $15 “why should I?” price.

It may not seem like a huge price difference, but I think the New York Times would have been better off starting at around $10 a month for web access. At $15, the paper will attract dedicated readers but likely not as many casual readers as a $10 plan would.

In addition to being priced too high, I think the paper is also making a mistake by offering casual readers a measly 20 stories a month. I realize that the NYT wants readers to hit that limit sooner, rather than later, but it seems like a long shot that readers would want to subscribe after just 20 stories. (You can view how many stories you’ve read in the past with your free NYT.com account at the paper’s recommendations page.)

I wouldn’t be surprised if the NYT hopes to attract new print subscribers with its digital pricing. After all, you can subscribe to the Weekender plan for the print version of the paper for $12.60 a month, which includes complete access to the NYT’s digital content. As VentureBeat’s executive editor Owen Thomas pointed out on Twitter, Weekender subscribers remain far more valuable to the NYT than digital subscribers when it comes to ad revenues.

Photo via Adam Kinney

Manilla is one of 53 companies chosen by VentureBeat to launch at the DEMO Spring 2011 event taking place this week in Palm Desert, Calif. After our selection, the companies pay a fee to present. Our coverage of them remains objective.

Born out of one of the U.S. Postal Service’s biggest customers comes a threat that could speed the mailer’s inevitable death: Welcome Manilla, a startup backed by magazine publisher Hearst, which aims to put your bills online.

No, really. Online bill pay has been a pipe dream since before the Internet hit mainstream consciousness a decade and a half ago. From nascent 1990s-era dial-up services well into the broadband age, though, most consumers have opted to keep getting paper bills. If you’ve tried to pay a bill or update an account online, you know why: Banks, utilities, magazines and other bill-senders for the most part offer unnavigable Web 1.0 design nightmares and overkill security that makes remembering logins and passwords a headache.

Today at the DEMO Spring 2011 conference in Palm Desert, Calif., New York-based Manilla unveiled a service for managing household accounts. I’ve tried it, and it may just be sexy enough to get users to nail their mailbox closed for good.

Hearst digital executive George Kliavkoff, who’s been leading the startup as interim CEO after a career that’s included stints at RealNetworks, MLB Advanced Media, NBC, and online-video site Hulu, is similarly taken: He’s announcing today that he’s becoming the startup’s permanent CEO.

Here’s how Manilla works: You type in the name of a business. If Manilla recognizes it, you’re prompted to add your login credentials if you have them, or create an online account if not. (For businesses Manilla doesn’t know how to handle, it logs suggestions from users to add them.) Manilla then connects with the business, either through back-end server connections or by logging in on the user’s behalf, a process known either as “screen scraping” or “Web extraction” depending on who’s talking. It then displays reminders of upcoming bills and archives paid bills and other messages forever. And along the way, it quietly stops those paper bills from coming.

Yes, there are potential security concerns, but screen scraping has been practiced by similar account-aggregation sites for more than a decade and is now well-understood by most players. Manilla says it has a full-time employee devoted to security and good relationships with financial institutions. It may nevertheless have a challenge convincing mainstream consumers of the process’s safety.

I ran into trouble adding my Citibank accounts, but it turned out that was Citi’s fault, not Manilla’s, as the bank’s systems were experiencing outages. The main letdown was when I tried to add my magazine subscriptions. I subscribe to a half-dozen titles. Not a single one was connected with Manilla. Kliavkoff said his team is working on adding more.

My main complaint with the service is that it’s too secure. The signup process has persnickety requirements for passwords that I don’t believe add substantially to security while adding to user frustration. Recent research has shown that fussing over whether a password has capital letters or numbers doesn’t add substantially to security. Kliavkoff told me that this was a battle he lost with his security team. (George, let me give you the same advice I regularly dish out to my writers: Just win.)

The major win for me and Manilla came when I added my electricity and garbage bills. Since I was logged into those sites anyway — I rarely visit them, typically receiving a paper bill and then paying the bill online through my bank instead — I signed up for automatic payments. That, in turn, is how Manilla plans to make money.

Why is Hearst backing this mail-killing business, since — for now, at any rate — it sends magazines through the Postal Service? Along with those lucrative, ad-laden magazines, Hearst sends some 500 million pieces of transactional mail a year — bills and renewal notices, Kliavkoff explained. And that’s just one biller: Think of the bank and credit card statements, utility bills, and other account notices companies send out. A typical bill costs a company 73 cents to send.

Most account-aggregation sites make money by analyzing consumers’ spending and then suggesting that they switch to a cheaper provider. You can imagine why billers aren’t thrilled about sharing their customer relationships with those sites. Manilla doesn’t allow competitive offers on its site. Instead, it charges billers a small monthly fee for every user who switches from paper to online billing.

Kliavkoff expects to yield $2 to $3 in revenue a month from a typical Manilla user at very high margins. He wouldn’t say exactly how much he aims to charge billers, but based on some other estimates he provided, I believe it’s somewhere between a nickel and a dime per user per month. Comcast and Citibank have agreed to come on board, he told me.

Currently, Manilla is owned 100 percent by Hearst. Kliavkoff wouldn’t say if he plans to raise outside money, but he points out that when he ran Hulu, its TV-network investors sold 10 percent of the company to Providence Equity Partners. I’ll read that as a statement that he’s open to taking someone’s money. In the meantime, I recommend that you sign up for Manilla and see who’s taking your money. You might save a few trees — and your sanity.

[Image via Ideasincirculation.com]

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

For developers, it was Apple’s way or the highway. It seems like that highway seems more appealing every day.

The team behind iPhone app Readability issued a biting public response to Apple after its application was rejected because it did not use Apple’s in-house in-app purchase service. Readability is one of a number of mobile applications on the iPhone operating system that used an external subscription for the app — which lets web surfers strip away ads and other content and view just the text.

There was a lot of unrest when Apple first announced its new subscription plan, which hit applications ranging from Readability to the incredibly popular Amazon Kindle app, which includes a link to buy books for Kindle. The uproar since died down, but Readability might be the first company that works this close with Apple (Readability appears in Safari) to publicly trash the new service.

Subscriptions represent a “sliver of a sliver” of revenue for Apple, said Richard Ziade, Readability’s creator. It’s true — most of Apple’s revenue comes from iPhone, iPod and iPad sales. Apple brought in $26.7 billion in revenue in the fourth quarter last year, and only $1.1 billion of that came from the iTunes store — which includes app sales and in-app purchases.

Meanwhile, Google continues to welcome developers with open arms. While the iPhone has the largest app store, Google recently overtook Nokia and other phone manufacturers with the largest mobile operating system market share. And despite a few hiccups with the application approval process, most apps make it onto the Android Marketplace without having to pass through anything like Apple’s black-box approval procedure. Google also launched a more publisher-friendly Google One Pass that will allow publishers to sell subscriptions with better terms than they can get with Apple. And Google is only taking a 10 pecent share of the revenues.

The new Apple policy feels like a greedy move by Apple to gobble up some additional revenue, Ziade said. He suggests that Apple still hand out 70 percent of the revenue it receives from its stake in the subscription share to publishers, as Readability does. But Apple rarely budges, even when developers or consumers throw up their hands in frustration and outrage over changes in the terms of service. When the company does make a change, it takes a long time and a needs a lot of convincing.

iPhone and iPad developers have put up with a lot from Apple, and it’s unclear if the new subscription plan will be the final straw for developers across the board. But for Ziade, and for Readability, it looks like enough is enough.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Federal regulators are looking once more into Apple’s control over the applications available on the iPhone and iPad, according to a report in the Wall Street Journal. This time it’s Apple’s subscription feature for apps (which the company unveiled yesterday) that’s attracting antitrust scrutiny.

The problem isn’t the subscription plan per se, in which Apple takes the same 30 percent cut that it does on App Store purchases, but rather the restrictions that Apple put around it. The company said that any app offering a subscription plan elsewhere has to offer it within Apple’s iOS app too, and at the same price. In addition, publishers cannot include links inside their app to purchase content or subscriptions elsewhere.

The Justice Department and the Federal Trade Commission are both in the preliminary stage of their investigations, according to the Journal’s sources (who are “people familiar with the matter”), so they may not take any action against Apple or even launch a formal investigation. Eric Goldman, director of Santa Clara University’s High Tech Law Institute, told the Journal that Apple’s prohibition of links sounds like “a pretty aggressive position.” And the restriction on offering a better price elsewhere could be considered anti-competitive too if it distorts pricing.

It’s widely believed that the FTC was investigating Apple last year for its ban on tools that converted non-native apps into iPhone apps, and that the investigation pressured Apple into backing off. So if this investigation gets real momentum, we may see another about-face.

It’s also interesting to see that much of the opposition to Apple’s plan seems to be coming from music startups. Rhapsody said yesterday that its subscription model won’t work if Apple takes 30 percent, and today Last.fm’s co-founder said Apple “fucked over music subs for the iPhone.” The Journal article also includes complaints from music startups, including Axel Dauchez, president of French startup Deezer, who says giving Apple 30 percent of a subscription is “so obviously anticompetitive that it will never survive in Europe.”

It’s not surprising that Apple is facing some of its loudest opposition from these companies, since the royalty costs for music make it notoriously difficult for startups in the music field to make money. Not even popular Internet radio app Pandora expects to make a profit this year.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Kiosk DVD rental company Redbox will soon launch a subscription-based Internet streaming service, much like Netflix’s streaming video service, the Los Angeles Times reports.

Company president Mitch Lowe confirmed the news yesterday in an analyst meeting. Redbox previously announced that it would launch some sort of digital service, but it was unclear if consumers would have to pay for every movie they wanted to watch, or if it would be an all-you-can-eat buffet with a subscription fee.

Now that we know Redbox is definitely going with a subscription option, it’s clearly positioning itself to take on Netflix. In addition to streaming across multiple devices, Redbox’s subscription will also grant you access to discs through the company’s kiosks. That may ultimately make it more convenient for customers who are fed up with waiting for Netflix discs by mail, and only rely on its streaming service.

Redbox has previously said that it would launch its digital service with a partner, and as the LA Times points out, Amazon is the most likely choice. Amazon is also preparing a digital streaming service, which would work across all devices that support its current on-demand movie store, and may debut this month. The service will be a part of the $79-a-year Amazon Prime, which currently offers free two-day shipping to customers. Amazon just last month purchased LoveFilm for $200 million, which is Europe’s equivalent to Netflix.

It’s unclear how Redbox and Amazon would coexist together when they’re both also running competing video services, but this may be a case of two competitors joining together to take on a titan. To chip away at Netflix’s 20 million subscribers, the two companies will need to work together somehow — especially since Netflix has such a tremendous head start.

Amazon has also partnered with Redbox’s parent company, Coinstar, to offer Amazon gift certificates through its coin kiosks.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Apple revealed the details of its previously announced subscription feature for applications on the iPad and iPhone today, and there’s been a pretty loud backlash.

What’s the problem? At first glance, the rules seem fair enough. Apple takes a 30 percent cut of subscriptions sold through the App Store, but publishers are free to offer subscriptions elsewhere, for example through their website. (There’s something kind of hilarious about the fact that Apple says explicitly, “Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple.” Uh, thanks?)

But here’s the catch: If developers offer subscriptions elsewhere, they have to offer them inside their iPhone and iPad apps too, and at the same price. Developers are also forbidden from including links inside their app to purchase content or subscriptions outside the app. That even affects products like Amazon’s Kindle app, which includes a link to buy books for Kindle.

TechCrunch’s MG Siegler does a good job of laying out Apple’s likely rationale. The company has created what is likely to be the most user-friendly subscription service anywhere. In order to make it work, however, publishers can’t just increase the prices within their apps to incorporate Apple’s 30 percent cut while leaving subscriptions lower elsewhere. Otherwise, users will be torn between the superior experience and the lower price.

That may be true, but it’s not sitting well with everyone. Rhapsody, for example, says that its subscription model won’t work if Apple takes a 30 percent cut, and that it will be “collaborating with our market peers in determining an appropriate legal and business response to this latest development.” At the Think Vitamin “web practioner’s blog”, Ryan Carson argues that this should be the spur developers need to finally embrace mobile websites using technology like HTML5, rather than building native apps that are subject to Apple’s rules.

Of course, the App Store has faced to developer criticism from the beginning, yet the number of apps keeps growing. While I’ve seen a few startups who focus exclusively on mobile Web or Android, they’re pretty rare.

So I’m very curious to see to most developers will continue to play ball with Apple, or if this will be the restriction that pushes them over the edge. My guess: As is often the case, this will come down to money. If companies can still make a profit through Apple’s new model, most of them will learn to live with it.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

News Corp’s The Daily iPad newspaper is the first app to support one-click subscription billing, and Apple’s vice president of interactive services Eddy Cue says that the feature will soon make its way to other apps.

The addition of subscription pricing is a big change for Apple, as it will allow news publications to price their apps similar to print media. Users won’t be asked to manually pay for a new issue every month (like current iPad magazines), and advertisers will have a better sense of an app’s readership.

News Corp is offering subscriptions to the The Daily at 99 cents a week, or $39.99 a year. That’s certainly much less than traditional newspaper subscriptions, although it may seem high compared to typical magazine subscriptions. The app will also feature ads, even though users are paying for it. News Corp’s Rupert Murdoch said that by charging a subscription fee, The Daily will be able to attract high class advertisers who will pay more.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Just as we’ve heard many times over the past few years, Apple is apparently in talks with music labels for a subscription-based iTunes plan that would give customers unlimited access to songs for a fee, the New York Post reports.

Sources tell the paper that Apple’s VP of internet services, Eddy Cue, who heads the iTunes and App Store teams, has been in talks with music executives as recently as a few weeks ago. Apple has in mind tiered pricing for the service between $10 and $15 — but it still needs to work out issues with the labels like how much music to include in every tier, and how long consumers have access to content.

This time around, Apple’s subscription ambitions may actually bear fruit. The Post writes: “One top music exec said the labels are supportive of the idea and believe it could re-energize digital music sales. While album downloads have been on the rise, single track sales were flat in the first half of 2010 compared to the previous year.”

Apple’s discussions with record labels may be impeding the popular European music streaming service Spotify, which is also in negotiations with record execs, CNet reports. Spotify offers European music fans access to a wealth of streaming content for free, while more hardcore listeners could pay a small subscription fee. Music labels are apparently unconvinced that Spotify’s business model can make money and will require large upfront royalty fees from the company before any agreements are made.

Research group Nielsen also recently named subscription streaming services as a potential reason for the drop in digital singles sales this year, something music execs and Apple are surely aware of. Apple execs have expressed their doubts to record labels about Spotify’s viability, sources tell CNet.

Spotify has already missed two previous US launch dates thanks to its inability to gain music industry support. Missing its next self-imposed deadline for the end of the year could prove disastrous for the company. As CNet points out, other ad-based music streaming services haven’t fared so well. Imeem sold to MySpace for a reportedly low amount, and SpiralFrog simply crashed and burned.

Google may also be working on a music store and streaming service of its own, which would instantly create another major obstacle for Spotify. If Google manages to integrate the service with its increasingly popular Android phones, there’s little chance smaller streaming music startups like Spotify could compete.

Getting content noticed is a challenge for everyone making apps. Join us at DiscoveryBeat 2010 and hear secrets from top industry executives about how to break through and profit in the new cross-platform app ecosystem. From metrics to monetization, we’ll take an in depth look at the best discovery strategies and why they’re working. See the full agenda here. The conference takes place on October 18 at the Mission Bay Conference Center in San Francisco. To register, click here. Hurry though. Tickets are limited, and going fast.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

The increasingly popular bookmarking and offline article-reading service Instapaper has just rolled out a $1/mo. subscription model. The move could open the door to much-needed experiments with online publishing.

The paid subscription comes with just one perk at present: an option to turn off ads. All other features “will continue to be available to non-subscribers,” according to Instapaper’s developer, Marco Arment, who built his reputation as the former CTO of Tumblr, the popular, simplified blogging service. He plans to roll out new features to paid subscribers over time.

Like many users, I’ve long employed Instapaper to make my ride on the subway more enjoyable and productive. With convenient browser bookmark tools and integrations with other services like Twitter, it’s a breeze to save long pieces you’d like to read but can’t at the moment. When you’ve finally found the time,  you can read your picks on Instapaper’s iPhone and iPad apps. The apps are elegantly simple and include features like remembering your location in an article across devices, similar to Amazon.com’s Kindle book-reading software. And you can also catch up on your reading on the Web as well.

Instapaper’s success bucks the trend toward magazine-like experiences on mobile devices, the ‘rich media’ many publishers are touting to justify paying for content on the iPad when they offer similar articles for free on the Web. Instead, it presents users with clean, text-only versions of articles they’ve bookmarked.

Does Instapaper’s move to a subscription model suggest support for publisher subscriptions down the road? Arment pointed out that Instapaper already works nicely with so-called paywalls, allowing people who subscribe to paid websites like the Wall Street Journal or Financial Times online to save articles for later reading, a service he says publishers “unanimously love.” But it doesn’t let people subscribe to media or pay for articles directly through Instapaper.

Arment thinks that third-party subscriptions or per-article payments are possible for Instapaper, but there are “a number of logistical and practical hurdles.” At present, it appears he’d rather support publishers’ experiments rather than run subscriptions for them.

That may be a disappointment for publishers looking for a white knight. Many magazine publishers are frustrated that Apple has flailed around in coming up with a reliable subscription model for content, forcing them to charge expensive per-issue prices for tablet-friendly versions of their content.

Instapaper’s new pay service isn’t a magic bullet, either. But at least publishers who hope to charge for content down the road appear to have a friend in its creator.

Getting content noticed is a challenge for everyone making apps. Join us at DiscoveryBeat 2010 and hear secrets from top industry executives about how to break through and profit in the new cross-platform app ecosystem. From metrics to monetization, we’ll take an in depth look at the best discovery strategies and why they’re working. The conference takes place on October 18 at the Mission Bay Conference Center in San Francisco. Sponsors can contact us at sponsors@venturebeat.com. To buy tickets, click here.

Online payment vendors such as eBay’s PayPal have become popular for one-time purchases. But Aria Systems is expanding PayPal’s repertoire to subscription management.

PayPal has handled the payments part of subscriptions for years. But to date, subscription management systems have been clunky and hard to use. Aria wants to enable vendors such as PayPal to offer subscription management as a self-service option for merchants, said Lance Walter, vice president of marketing for Aria Systems in San Mateo, Calif. The service is now live and the company has been running  a pilot for a few weeks.

That could be important for online merchants that are looking for more predictable revenue streams and long-term customer relationships. And subscription options are important in markets from games to publishing. Aria Systems automates the process of invoicing customers and notifying subscribers for renewals. PayPal itself has more than 84 million active accounts in 190 markets. It handled $71 billion in payments in 2009. The company has to keep on adding new services such as Aria’s in order to stay ahead of rivals entering its home turf.

Aria was founded in 2003 and launched its first billing system service in 2006. It has raised $14 million in two rounds from Hummer Winblad and Venrock. Rivals include Amdocs, Portal Software (owned by Oracle) and a number of other software-as-a-service vendors.

“What we’ve learned so far is that online billing is about a lot more than just billing,” said Walter.