Checking Out Is Hard To Do

Bitmenu features a radically different notion of "checking out" to purchase digital items.  As we designed the system, we asked:

"Do we really need the user to set up an account with us when they might be buying a single item and just want that, right away?"

In the Bitmenu system, user accounts are for customer service purposes.  We track each purchase and help buyers resolve issues.  Since we make such lightweight use of accounts, we set them up automatically and in the background.

"If a user gets a tweet or email with an offer to purchase something, wouldn't they prefer to use a payment method they already trust and use regularly?"

Bitmenu currently offers purchase using Amazon or PayPal credentials.  Our system does not hold funds but acts as a broker and agent for our Sellers.  Buyers are sent to Amazon Payments or PayPal where they authorize the purchase amount and then are returned to us for fulfillment.  The user presents their credentials to our payment partner, who then validates the purchase to us in the background.

This video from Google illustrates some of the issues we address with our system.

Get Your Hi-Res Audio

Neil Young has tried for years to get Apple to deliver High Fidelity digital audio files in 192kHz/24-bit sound.  Now he's produced a new service to do what Apple will not.

Read what Rolling Stone magazine says about his Pono service and player.  We will have to stay tuned to learn more.


"His reasons are so not based in commerce, and based in just the desire for people to really feel the uplifting spirit of music," Flea said in defense of Young. "MP3s suck. It's just a shadow of the music."

Neil appeared for a video interview with the WSJ's Walt Mossberg last year, and Pono seems to be one outcome from his work since then.

Bitmenu handles higher resolution files with ease.  Users download and play them on the device of their choosing.  Since the files are larger than MP3s, they are harder for users to share through emails.  Any artist or producer who is looking to deliver Hi-Res audio would be welcome to write us at publish@bitmenu.com.

QR Codes That Rock

While QR codes are recognized and used more frequently now than ever, they are far from ubiquitous.  Today, TechCrunch came out with a nice piece suggesting something that would make them mainstream: make every smartphone camera into a scanner.

Many in the tech community expect a new technology, NFC, to become commonplace.  The article argues for not waiting for a whole new generation of chips to make their way into the hands of every consumer when we already carry devices that can do the job.  So much can be communicated via simple URLs: just look at any web page.  By making standard digital cameras just a bit smarter, they can become scanners that link users to remote resources.

One interesting approach is to make the QR code blend into the artwork surrounding it.  Visualead has developed a nice approach: upload an image to their site along with your target URL and they will overlay a QR code onto your image.

Can you see the Bitmenu URL in the image above?  Our Sellers can use the Visualead site to attractively present their items for sale.

The Consumer's Voice

Every so often, we see something that speaks directly to what we are doing at Bitmenu.  Our focus has always been to remove barriers and enable easy engagement between buyers and sellers of media.  While we often talk about the benefits to Sellers (no need to manage registrations, credit cards and delivery), the value to Buyers is presented nicely in this article from Gizmodo.

A snip:

"I'm a person who pays for content because I want to support the people who created it, but who's increasingly frustrated by how hard content owners make it to just give them my money sometimes. That may put me in the minority, but I don't think I'm alone."

Digital Theater Downloads Extend Performances

Every so often we see evidence of sustainable business models built around distribution of digital media.  When we look into how purchases are made and media delivered, we think of how Bitmenu is different and could be used for similar purposes.

In this case, a group in the UK sells theater performances:

Digital Theatre works in partnership with the leading theatre companies and arts organisations in the country to bring the best theatre to your desktop or television screen.

As Apple TV and other internet-connected solutions bring video to the television set, people will choose to view purchases this way as well as through well-known "stores".  This review provides a great example of how this niche service is used.  As noted, the site requires registration.  Users have to create a userID and password.  They must also supply personal information, including mailing address, and credit card information.  In other words, VOD sites like this have to build a relationship with the user before they can sell anything.

Bitmenu makes it easy for users to buy without sign up or registration.  Users pay and download their purchase without handing over any of the information mentioned.  They use their Amazon or PayPal account and Bitmenu verifies the transaction prior to releasing the download.

For niche VOD services, Bitmenu enables a unique casual purchase makes buying so easy they are easy to recommend.

How Google Will Supoort DMCA Actions

Yesterday, Google issued a statement that should encourage sellers of digital media.  Anyone who sells copyrighted materials has to deal with unauthorized re-distribution of their goods.  While infringing sites can be prosecuted using the DMCA "take-down request" procedure, up until now those sites were able to freely promote themselves through Google search results.

Here is Google's statement:

"Starting next week, we will begin taking into account a new signal in our rankings: the number of valid copyright removal notices we receive for any given site. Sites with high numbers of removal notices may appear lower in our results.  This ranking change should help users find legitimate, quality sources of content more easily."

This statement has triggered questions about DMCA (Digital Millenium Copyright Act) and what Sellers can do to generate traffic to their sites as opposed to repeat infringers.  The statement received positive reviews by the MPAA and the RIAA, as noted by popular Search Engine columnist Danny Sullivan.

At Bitmenu, we have designed our systems to benefit media creators.  Now we are seeing Google take the same stance.  From the RIAA quote:

"This should result in improved rankings for the licensed music services that pay artists and deliver fans the music they love."

Of course, Bitmenu is unique in that we enable Sellers to easily reach out to Buyers directly.  The action that Google puts into effect on Monday should help them stand out as well.

Amazon's Video App for iPad Features Amazon Purchase Flow

Today's release of Amazon Instant Video for iPad contains an important variation on most media sales made to iOS devices:  it circumvents the iTunes Store infrastructure.

Much has been made of Apple's 30% "tax" on all items sold through their various iTunes-enabled e-commerce services, including the App Store, iBookstore and iTunes Music Store.  Developers or publishers have had to work with Apple to enable "in app" purchases or otherwise make their media available from Apple.  The "native app" approach was at first assumed to compliment the "native web" approach to buying things on iOS, but the pendulum has recently swung strongly in favor of the app approach.

Now, Amazon is providing a "native web" purchase path that presents a compelling alternative.  As reported by AppleInsider, "To circumvent Apple's requirements for in-app purchases, new content must be bought from Amazon via the iPad's Safari Web browser. Purchases made on Amazon.com through the browser will appear in the Your Video Library section of the iPad application."

While Apple boasts a system with over 400 million active credit cards on file, Amazon has nearly 200 million.  Given there are only 170 million US credit cardholders, both of these services have pretty much covered that part of the market.

So, Amazon has creating a shopping experience that starts and ends on the web, and never touches the Apple Stores.  Users download a free app from the Apple App Store, but their purchases are handled via Amazon's Web Services.  Interestingly, they have worked for years with developers like Bitmenu to refine this technique.

We expect more Sellers to choose to market their media on their own terms.

Google+ Introduction For Marketers

Up until now, selling directly to fans and followers came in four flavors:

1. Set up a web catalog and drive traffic to it.
2. Build and manage an email list with offers.
3. Set up a Facebook page and post offers to your Facebook stream.
4. Insert offers into Twitter posts.

As if these weren't enough to worry about, now Google has released new versions of Google+ for the web, Android, iPad and iPhone.  These are now roughly equivalent in functionality, which means you can easily post or broadcast from anywhere, anytime.

Google+ is a different beast for Sellers.  When you create a Facebook "friend", they "accept" you and it's a two-way connection.  Google is more like Twitter in that you can "follow" anyone and they can "follow" you by "adding" you to their "circles".  So, the goal is to be in as many circles as possible.  Then, when you post something it will appear in the stream of the people who are following you.

Here is a very quick tutorial from the Traffic Generation Cafe.  And Forbes ran an article and video of an artist using Google+ exclusively as their marketing vehicle.

The wild-cards that makes Google+ transformative right now are "hangouts".  Think of it as Skype that works on smartphones and PCs.  You can have interactive video chats with up to 9 people that can also be viewed in real-time through YouTube.  Also, Google+ lets you set up "Pages" for events or brands, and these have their own news feed, hangouts and circles.  Finally, the search function makes it possible to find old posts easily and for your posts to be discovered.

We think it's possible to build businesses around Google+.  Of course, Bitmenu links format nicely within Google+ posts!

Lady Gaga Sells To Little Monsters

Lady Gaga has joined the ranks of celebrities who are setting up their own online communities and selling their own stuff.

Like JK Rowling's Pottermore, Lady Gaga's Little Monsters is all about community with some critically important e-commerce offerings.

Specifically, tickets to her "Born This Way Ball" tour are available through her site (via TicketMaster).  

In addition, users can "join" the event, which subscribes them to a Pinterest-style stream of items contributed by others for that event.

TNW reports the site has gone through its beta phase and is now available to all through a simple sign up (Twitter and Facebook can be used). 

Can we expect her to make available media for sale as well, a la Louis CK?  We would be happy to help!

A Smart Look at App-Enabled Credit Cards

Forbes enlisted billionaire and LinkedIn founder Reid Hastings to produce this look at credit cards as platforms for apps.

Anyone who has bought something through iTunes or Amazon might notice charges on the card they have associated to those accounts for items not purchased directly from these stores.

When you buy something through an app on your iPhone, it is using the credit card you have on file at Apple.  Likewise, when you buy something using your Amazon account, it might well be through an app provided by services like Bitmenu.

App-enabled credit cards provide a secure way to offer more for sale from more places without requiring consumers to register their credit card with each merchant or vendor they wish to buy from.  As alluded to the Forbes article, your iTunes or Amazon account might soon enough enable you to purchase things from within a physical store.

To make this happen, developers must build apps that connect users with the credit cards they already have on file with iTunes, Amazon or other payment processors.  As these payment services work with more developers, the kinds of applications suggested by the article will become available.

European Courts OK Resale of Computer Downloads

Forbes magazine reports that The Court of Justice of the European Union ruled in favor of reselling downloaded games.

"Simply put, legally purchased and downloaded games will be treated like physical copies of the game, and consumers can then sell their ‘used’ game."

The Official Release from the Court makes it clear that an original buyer cannot sell part of the license and must make their own copy unusable if they do sell to another acquirer.

What does a "used digital work" look like?  The answer, of course, is it looks identical to the original - a perfect replica with no battered pages or faded resolution.  The only difference between a used copy and an "original" is how the right to use it is recognized.

At Bitmenu, we have been watching closely for new developments not only with file-sharing and rights management, but also legitimate re-distribution of digital works.

Louis CK Takes His Act On The Road

We have been fascinated by Louis CK's success selling his latest video directly to his fans.  Now we find he's hard at work on the next phase:  managing his own tour, including selling his own tickets.

What's going on here?

Using ticketing services such as Eventbrite and Etix, performers can take control of the sale of tickets to their fans.  Tired of high service fees and resellers who jack up ticket prices, Louis CK has lined up over 50 performances in 39 cities.

The comedian announced Monday, June 25, that he'll charge a flat, no-fee rate of $45 to all of the shows on a 39-city tour he kicks off in October. Tickets will bypass ticketing services and be available only through louisck.com.

The tweet speaks for itself:  Appearing in venues that hold an average audience of nearly 2,000, 100,000 tickets have been sold in two days.  We now know that this comedian considers his line of work an agrarian occupation:  he develops new material each year by going on the road, then creates a video at the end that he sells.

Here's part of his pitch:

"So here's all where I'm coming on this tour. Click on the right to buy tickets. You can't get them ANYWHERE but here. So no crazy high ticket fees, no scalpers, no annoying emails, no joining a thing that you hate."

Performers interested in this approach can work with the services mentioned and can contact Bitmenu to sell their digital media at customerservice@bitmenu.com.

UPDATE (7/2/12):  The Atlantic weighs in with more details.

A New Tone from the RIAA: "Reasonable and Well-Considered"

In a fascinating presentation, the CEO of the RIAA revealed The Music Industry in the Digital Age at the recent Personal Democracy Forum 2012 last week in New York City.

While high-profile copyright infringement litigation has drawn the public spotlight to the organization in recent years, Cary Sherman is sounding a different note, six months into his tenure at RIAA.

What many don't realize is that the vast majority of the sales made in the music industry come from very few, massively popular items.  Of the 77,000 new albums released last year, 80% sold fewer than 100 copies.  94% sold fewer than 1,000.

As Cary suggests 11 minutes into the video, "For all the opportunities for niche, specialized markets where the music is going to be able to find its fan base, what's interesting is that most people download and stream the stuff that is most popular".

Having said that, Cary is reaching out to new distribution methods and platforms.  He suggests that record labels are to recording artists as venture capitalists are to entrepreneurs.  As head of the industry association, he is working to broaden DRM free music distribution and to make it simpler and easier to license music and develop new business models.

Sales of music related products have always been central to Bitmenu's service.  For the vast majority of those producing music, our method of direct sales and delivery should be considered.  We welcome any inquiries at customerservice@bitmenu.com.

Celebrities Drive E-Commerce

At Bitmenu we are experimenting with celebrities to sell digital media direct to fans.  Mostly this has been in the form of ebooks and music lessons, but we have entertained discussions of high quality audio files and full-length films.  The key has been to leverage events, such on-stage appearances.  A simple QR code or tweeted message starts the purchase and delivery process.

Think of audiences leaving a concert and buying a video of the signature song being performed just as they saw it.

As reported in Pando Daily, celebrities and their newfound ability to connect with their fans via social media is creating a new wave of commerce.  A snippet:

"In the past, celebrities were only able to communicate with their fans through traditional media. This was limiting, because it was a one-way dialogue, with no opportunity for fans to respond to or interact with them. But today, thanks to Facebook, Twitter, Tumblr, and Pinterest, celebrities can talk directly to their fans, and can share the products they like, love, and even produce."

Trading Digital Rights and Reselling Content

With so much fear and uncertainty regarding online piracy, content producers and sellers have many issues they face beyond merely promoting and delivering their works.  Increasingly, we see creative new approaches to selling media that generate sustainable businesses.  The idea that buyers might resell works to their own networks - to the benefit of the original Seller - leads to the notion that selling rights to content will become more valuable than the files we deliver now.

Frederic Filoux has some powerful thoughts about trading rights to digital media:

The shift from paid-for files to rights for books or digital contents won’t come easily. As a telco exec told me last week: ‘It took centuries to convince people their money was more secure in a bank than under a mattress; convincing them they should trade ownership foraccess rights will take some time’. But this is the logical way to go.


At Bitmenu, we have designed our systems to recognize rights, files and transactions as separate things.  This means the comments of a college student can be contemplated.

From a college student’s perspective, if the proper actors who see the profit take action, I for one will gladly step up and purchase rights to an etextbook that won’t be made completely obsolete in three months when they come out with a new edition. I am liking the idea already… And then I can re-sell those rights–they may even appreciate while I own them!

Apple Announces Passport at WWDC

48 minutes into this analysis of Monday's Apple announcements, this panel dives into the new Passport app and the implications of Apple's 400Million credit cards being used to purchase in bricks and mortar stores.

On the panel:

Leo Laporte, Alex Lindsay, Andy Ihnatko, and Aaron Hillegrass

http://twit.tv/show/macbreak-weekly/303

In a nutshell, the breath-taking demo was for an airline ticket.  In Apple's on-stage demo, when you buy an airline ticket you will be able to store it in your Passport.  Even if the flight is delayed or the gate changes, the ticket in your Passport will always be up to date.  So, imagine Apple coaxing every store at airports to support Passport as well.  You can then walk around the airport and buy anything with just your iOS device, through your iTunes account.  This takes us back to small paperback-only bookstores in the 1980s opening up first in airports, then spreading from there.

Bitmenu is enabling brick and mortar stores to offer coupons to be redeemed at physical locations in much the same way.  Merchants can welcome new visitors to their store and they can buy on their mobile devices (not just iOS).

Pinterest Targets Social Selling

Bitmenu was designed for use with social media.  Our original idea was to deliver great content to any device through any web-enabled platform.  Since Sellers can place Bitmenu links anywhere, we have see sales through e-commerce sites, blogs, email, YouTube, as well as social networks.  We have provided easy tools to sell through the social streams of Facebook, Twitter, LinkedIn, Google+ and Pinterest.

Of these excellent networks, Pinterest provides a compelling sales environment for Bitmenu Sellers to consider.  Sellers can organize boards of offers that persistently give their followers opportunities to purchase and encourage their network of followers and others to "re-pin", comment and buy as well.

Here's an example Pinboard featuring some excellent lessons from Acoustic Guitar magazine, available for sale via Bitmenu links.

To get the most out of Pinterest, consultant Jeff Bullas has written a concise blog post, 10 Creative Ways to Market on Pinterest that should be read by everyone selling through social media.

UPDATE:  An authoritative report was put out by All Things Digital, about why e-commerce is head over heels for Pinterest.

Zappos to Build Las Vegas Campus

While Apple is the clear superstar of bricks and mortar retailing in recent years, we might see something else brewing from Amazon's Zappos subsidiary.  This article tells us to pay attention and watch what develops as Zappos takes over the old City Hall of Las Vegas and creates its own "Sim City", called The Downtown Project.

Here's a snippet:

Zappos has big plans for Downtown Vegas. Huge, in fact. It is moving its headquarters from the suburbs to the former City Hall Downtown, and Hsieh is personally spending $350 million of his own money to make it the most connected, community-driven downtown in the country. Think of an elaborate corporate campus with a hair dresser, a food court, and a gym, and multiply that by 69 gazillion. Zappos’s campus will be Downtown Vegas, and Hsieh is making sure it has everything his employees would need within walking distance.

So while this does not mention a specific shopping venues, it's Las Vegas and it's Zappos.  The project is designed to become a community for Zappos employees and a spawning ground for new businesses.  We think "re-imagining retail" will require experiments such as this.

"I Don't Know The Answer To Your Question"

This is how Ari Emanuel responded to the issues raised at the recent D10 conference when it comes to generating quality paid content for less than the $2-3 million per episode now required to produce what is on TV today.  While most of the controversy generated by this session deals with copyright infringement, his core argument is a plea for a way that creative people can generate enough money online to justify the kinds of investment in new projects that they now enjoy.  It sounds like he's committed to working on this.

In short, how creators get paid for their premium content needs a new model.

The firestorm erupted when Ari was asked:

"Say someone drives to my house and steals something from me.  You are saying you should hold the car company and the city who makes the road responsible for the crime?"

There will be plenty of talk about how to deal with copyright through methods to police infringement.  At Bitmenu, we have a different idea.  We have put in place methods to monetize redistribution of content.  Why not encourage buyers to tell their friends and get a piece of the action?  Some 2% of our sales come from this method already.  We think it's an idea whose time has come.

The Case for Publishing Direct to Consumers

As publishers produce ebooks for consumption of mobile devices they are increasingly learning they can also by-pass Amazon and Apple and sell directly to their customers.  John Oakes at OR Books has produced a very nice article for Publisher's Weekly.

"At OR Books, which specializes in nonreturnable, prepaid sales straight to the consumer, we’ve found that, with some effort and increasing success, it’s possible to persuade readers to sidestep the still-young tradition of heading straight to Amazon for purchases. Such a prospect needn’t spell disaster for physical stores, either. Counterintuitively, our growing experience with direct sales has led us to re-examine our bookstore connections."

What comes through John's experience: fostering a community of readers online can stimulate physical books sales through bookstores.  Creating "buzz" and engaging consumers directly is coming of age.

As John says, "Amazon is not the last word in bookselling".  At Bitmenu, we are seeing more PDFs and ePUB files distributed by publishers who have become increasingly sophisticated in engaging their readers.

UPDATE:  In Sweden comes some very compelling examples of publishers going direct.  In addition, this very clear new requirement for success:

But it’s a high that comes with a low. Because the great benefits of selling directly to the readers also demands a new mindset. D2C is perfect for the long tail economy, which grow both bigger and longer, but will always struggle with discoverability as its inherent nemesis. To stand out in the vast and growing world of digital content, you need to leave the shadows of traditional publishing and take a big, brave step out in the light. You need to build a relationship with your readers, be present where they are, and make it easy for them to understand what you do and to tell others about it. In other words: you need to build a brand.

Social DRM Makes News

Most buyers of digital media purchase through a very select few outlets:  Apple's iTunes and Amazon being two of them.  These huge sites have cornered such a large share of the market that content creators and rights holders are looking for new ways to reach their markets.

One aspect of the clout of these retailers is through "locking" purchased files to specific readers or hardware.  What if a creator has developed innovative materials that can't be read with Kindle e-readers?  Currently, these can't be sold through Amazon.

While file locking mechanisms are touted as a way to prevent piracy, publishers are increasingly questioning their value.

They point to the recent success of the Harry Potter ebooks that are now sold exclusively through the Pottermore Store.  We wrote an earlier article about the shift away from retailers and the use of social drm methods.

Now, the International Digital Publishing Forum (IDPF) has set about to define a standard for social drm.

..."there’s a growing recognition among publishers that DRM has aspects that work against their interests, including its lack of user-friendliness and eBook distributors’ use of the technology to ‘lock in’ consumers.”

We see a trend developing here.  It might take time, but limiting formats purely for use with readers provided by certain retailers limits development, creativity and new forms of expression.

Distributing Documents at Events

Location-based document distribution is an exciting opportunity for use at classes, workshops and conferences.  The above video describes one approach but is limited to free documents only.

Bitmenu links enhance mobile distribution for value added materials.  Organizers can upload and price videos or presentations for distribution through a simple offer URL.

With a Bitmenu URL in hand, a post to the event's Facebook group page or to a twitter hashtag enables anyone with a mobile device to make the purchase without signing up for a service.

Attendees receive their documents post-purchase.

We welcome anyone who is using doccaster to include Bitmenu paid links as well.  How are you distributing your event materials?

Mass Intelligence

The Economist Group has created a series of articles that is recommended reading for anyone using Bitmenu as a platform for delivery of their digital media.  As the image at left suggests, our current media landscape is dominated by delivery mechanisms that effectively target and serve "mass" and "elite" audiences.

Along with the rise of social media, casual purchasing and digital delivery, the Rise of the Mass Intelligent audience might be just as important.  

"There remains a large audience for high-quality journalism and media. To survive in the digital world, publishers shouldn’t appeal to the lowest common denominator, but instead focus on targeting the mass intelligent. And it may come as a shock that, at the end of the day, this may mean making your publication smarter, more intelligent and a little nerdier."

The lesson here for content creators and publishers?  Don't ignore the nerdier aspects of your brand and your fans.  Distribute your most popular materials freely, and at the same time charge for high quality, high fidelity and enhanced versions.  The mass intelligent will thank you!

New Video Showing Setup and First Offer

We've just posted a screencast showing how a new user sets up their Bitmenu account and creates a new item for sale.

We call it a recipe:  prepare your media, logo and thumbnails beforehand, then link to your Amazon of PayPal account.  With your account setup, you can upload your files, create offers and sell.

Making the screencast was fun.  We hope it is useful and helpful to you.  Please let use know if you would like more like it and by all means link to it.

Production Upgrade: New Downloader

Today we are making an improvement to the Bitmenu system that has been the result of observing tens of thousands of downloads.

As of today, Bitmenu has simplified the download process for most users.  Our new Flash-based downloader explicitly asks the user where they want to store their purchase, provides download status and then displays a "download complete" dialog.  While the process might seem simple, that's just the point.  We have reduced the process to its essential elements.

Not all users will see the new system.  If a user does not have Flash installed on their computer, our system will then look for Java in order to use the Java-based downloader.  If neither Flash nor Java is on the device  (some 8% of purchases are coming from smartphones and tablets now), the download will be managed via HTML.

In all cases, the user has one full download per purchase.

It's worth noting the unique nature of the system.  Louis CK's system lets buyers download 5 times and Pottermore gives users 8 tries for each e-book they purchase.  The Bitmenu system proves that one download is enough.  The benefit to users is they can try as many times as needed to get a full download.  Most problems come from network issues and with Bitmenu they can just try again.  

The good news for publishers is they can count on each download being tied to a purchase.  There is no "leakage" when a user sends their fulfillment URL to a friend.

Of course, our customer service team stands ready to assist users who encounter problems such as lost files, hard drives and computers.  Users sometimes ask for a second link for their home computer if they first downloaded to their office computer or after they have had to reformat their systems.  It's a straight-forward process for us to verify the purchase and authorize another single access link.

With today's upgrade, most buyers will see a smoother download.  We look forward to your feedback. 

Bitmenu's Purpose

This blog allows us to speak openly about how Bitmenu fits in the world and how it compares to what's going on elsewhere.  It's also a good vehicle to speak about what we at Bitmenu are doing.  I'm going to use an excellent outline provided by Nilofer Merchant.

Our goal is to enable creators of media to build sustainable businesses around their creations.  It's a pretty simple idea.  The tools available for creating and consuming great stuff exist, but building a business from sharing is challenging even the most established organizations, to say nothing of individual producers.

We see being paid simply for delivery as a vital, missing component.  With Bitmenu, creators can introduce their works to new audiences and interact with their known customers without requiring tedious registration and financial information.

Our method has been to participate with each new way people create and deliver digital content.  We started by helping podcasters, since that is what we were doing at the Stanford Professional Publishing Courses.  We made our system work with standard browsers, mobile devices and social media services to invite participation from creators of a wide range of genres and interests.

We make it a pleasure to buy and a fun to sell.  While making money is serious business, we designed the Bitmenu purchase flow to be as easy as possible.  Buyers just buy and take delivery, and Sellers get paid.  Fulfilling that purpose is a great pleasure for all involved.

This blog enables us to take our message directly to those who are contemplating how to direct their talents, how to engage their audience, and how to sustain their efforts.  Please share this message with those who need to hear it.  Also continue to share your feelings and suggestions with us.

For our part, we will speak about how to use Bitmenu from a seller's perspective as well as the buying process.  We've watched our first set of publishers develop production workflows and promotion timelines.  We will continue to use this blog to paint the picture of how creators are building sustainable businesses.

Pottermore Uses Social DRM Methods

Yesterday saw the opening of a new kind of "bookstore":  Pottermore.

At first glance, it's the online home for all the Harry Potter books by JK Rowling.

Looking a bit more deeply, it represents something that is truly revolutionary in the world of books and publishing.  It is run by the author and it sells directly to consumers.  There is no publisher involved.  There is no Apple or Amazon or Barnes & Noble unless needed for fulfillment purposes.

The purpose the site serves is to become the social hub of everything related to the classic book series.  While no one knows exactly what that will mean (only registered users can enter), the site is now selling and distributing the works in e-book and audiobook formats.  This by itself is big news because it is the only place where these books have been made available in digital form.

Traditionally, an author writes a manuscript, and a publisher produces the final product and ships it off through distributors to retailers who sell to consumers.  While these e-books are actually digital copies of the physical books produced by Scholastic in the US, they are not available on Amazon, iTunes or other online retail sites.  Amazon visitors are greeted with this notice:

Harry Potter Kindle books are now available on Kindle! All seven books in the series can be purchased at J.K. Rowling's Pottermore Shop, a third-party site. Clicking on "Buy at Pottermore" will take you to Pottermore Shop, where you will need to create a separate account. Like all Kindle books, books purchased from Pottermore are "Buy Once, Read Everywhere" and will be delivered to your Kindle or free Kindle reading apps.


Kindle and iOS users can simply purchase from the site and download to their device.  How can this be?

The answer is in how Pottermore is handling the files they distribute.  In order to deliver a purchased file, the site dynamically "watermarks" each file it delivers so it can be traced back to the purchase.  This means the e-book can be read on any compatible device.  It also means that the purchaser is exposed if "rogue" copies of their copy surface in other e-book stores or torrent sites.  For Kindle and iOS users, Pottermore appears to handshake with Amazon and Apple servers during the fulfillment process.

We will be watching this effort closely, as will many publishers and authors.  The practice of selling direct from producer to consumers has taken a big step forward.

Having developed a unique method to ensure that only one file is delivered for each purchase, Bitmenu enables any author or publisher to do as JK Rowling,  Louis CK and others have done:  engage and sell direct.

UPDATE (5/23/12):

Digital Book World interviews the CEO of Pottermore, Charlie Redmayne.  The piece includes this about their their approach to confronting pirates:


Pottermore DRM Effect

According to Redmayne, the company observed an interesting phenomenon when it released its digital rights management-free e-books to the world.

At first, piracy spiked, as new Pottermore buyers put the DRM-free books on file-sharing sites. But soon after, the “digerati” in the book community commented that they were stupid for doing so because it punished a behavior that the community had asked for (stripping DRM from e-books). The commenters also pointed out that the files were watermarked making the piracy trackable.

After a short while, many of the files were removed and, ultimately, piracy overall of Harry Potter e-books, some of the most pirated e-books, fell by 20% to 25%, according to Redmayne.

The New Decade: Social + Global

Every decade is stamped by the cultural trends driving change during the period:  the 60s were influenced by rock n roll, for instance.  It takes a few years for a new decade to take shape, for its mark to appear.  It's becoming clear that the 2010s will be moved by "the post PC era" (to use Apple's words).

To really delve into what this means, we recommend reading this Harvard Business School blog series by Nilofer Merchant (Rules for the Social Era, Social Means Freedom, Why Porter's Model No Longer Works, and Why Social Marketing Is So Hard are the first four pieces in her series).

Bottom line:  social means manufacturing for dynamically targeted groups of consumers based on their own preferences.

"When companies figure out how to shape their design, production, and manufacturing cycle from rigid planning and production systems to unique customer-driven experiences, they’ll design a way to respond in smaller bursts of more profitable cycles."


Think about how Facebook manufactures your news feed just for you, in real time.  Think how your Apple Store has the product you want even though you configure it and use it differently from anyone else.  Think about Amazon opening up a retail store near you carrying the products you want, for you to pick up post-purchase.


Merchant's series resonates with our earlier posts about the Lean Startup movement, selling in social streams and the Louis CK experiment.

At Bitmenu, we were struck by these words contained in a report put out by the Anderson School at UCLA in 2009:

"U.S. exports are the potential driver of a successful economic recovery and 'we will need to turn our shopping malls into factories.'"

This forecast seems to be coming true.  But, it will look much different than anyone could have imagined even three years ago.

New Wallet On The Way: PayPal and iCache

It's easy to think about a smartphone as a cash register.  It's not so easy to see how that will come to pass.

Google's Wallet, while available as an option in local retailers, just doesn't have much use since it was launched in August.  Google bit hard on the widespread adoption of Near Field Communications systems in smartphones.  My phone doesn't have NFC, does yours?

Last week, PayPal introduced their wallet plans at SXSW.  It will bring a whole new interface to the 106 million PayPal users and enables several different payment instruments and methods to work via smartphones and other mobile devices.  As a "wallet in the cloud" it can go anywhere a user can sign into their PayPal account, even if their smartphone is not available.

What is not mentioned in the video demos is anything about POS interactions.  Most "heavily engaged"PayPal users consider the service as safer than supplying credit card information to e-commerce web sites.  We would like to see PayPal generate QR codes for merchants to display in stores, along with an enhanced smartphone app that enables scanning and purchasing without a cash register.

To spice things up, iCache has launched a brilliant card-holding wallet that promises to make your smartphone into any card you like.  The Geode is currently seeking $50k to move into the manufacturing phase.  It is actually a smartphone case that includes a small e-ink screen that displays your card of choice via barcode, and a slip-out read/write card that can be swiped as needed.  The case includes a bio-metric scanner that will only open the app when the correct finger is presented.

Until these visions come to pass, Square seems to be gaining traction with their combination of Card Case and Register systems.

Bitmenu's system design anticipated consumer acceptance of "safer than plastic" solutions for purchasing. Buyers use their existing Amazon or PayPal accounts to purchase and can choose how to fund those accounts without worrying about sharing their financial information with individual Bitmenu Sellers.  For their part, Bitmenu Sellers benefit from the massive theft and fraud protection they get from these two services.

UPDATE:  3/16
Today PayPal introduced the PayPal Here POS system for iPhones.  This is going head-on with Square.

Pinterest, Pin-boards and Copyright

Default Bitmenu coupons now automatically include little red Pinterest "Pin it" buttons, right alongside Google+, LinkedIn, Twitter and Facebook.

While these viral buttons release the coupon into the various social streams, Pinterest goes a step further.  Anyone who is a fan of a given publisher can create a "pin-board" of their favorite coupons.  The image pinned can come from the Bitmenu coupon or the Seller's landing page(s).  Each pinboard has a very easy to read (and pass along) web address, such as:

http://pinterest.com/duhring/acoustic-guitar-lessons/

The result is attractively presented options for friends and fans.  For Pinterest, the results have been staggering.  They are growing faster than any other social network, including Facebook.  In fact, Pinterest integrated deeply with Facebook in January, and their growth has skyrocketed since then.

Of concern to any Seller are copyright issues related to sharing both Pins and Bitmenu Offer pages.  Since the image on the offer coupon is purely the property of the Seller,  Pinterest's terms are very similar to Bitmenu's.  They have taken pains to make the act of "pinning" effortless and freely available.

“YOU ACKNOWLEDGE AND AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE ENTIRE RISK ARISING OUT OF YOUR ACCESS TO AND USE OF THE SITE, APPLICATION, SERVICES AND SITE CONTENT REMAINS WITH YOU.”

Stock on Hand: Why Apple's Stock is Soaring

You can't sell what you don't have.

For years, Apple suffered from chronic supply shortages that sabotaged their lead in new markets.  Steve Jobs was a master of demonstrating products that were ahead of their time only to see others catch up by the time Apple had produced an adequate supply of product to meet demand.

Times have changed under the leadership of Tim Cook.  Apple's recent announcement of the iPhone 4S might have seemed pedestrian compared to the technical rabbits Steve Jobs pulled out of hats when he was on-stage.  But, subsequent financial performance and stock price show the benefit of making retail availability a core competency.

Heavenly Hot Dogs! Retail POS to the Cloud

The Melt, a fast-growing eatery invented by the creator of the Flip video camera system, has some interesting new ideas about selling and delivering food in their stores.

While flat-panel TVs are in many bars and restaurants, patrons eyes at The Melt seem fixed on their "Order Board" display in the store or through their smartphone (note the QR code at the pickup counter).  Anyone who has stood at one of Apple's Genius Bars knows the feeling of watching their appointment come up.  The similarity to Apple might be due to Ron Johnson's presence on The Melt's Board of Directors.

Another striking similarity with Apple's retail vision is the Personal Pickup option.  Apple customers use their smartphone to place orders and pay in advance using their iTunes account, then pick up their items in the store.

According to their marketing literature, "The Melt uses mobile technology that allows customers to remotely place a meal order from their computer or mobile phone and pick it up at any Melt location, always hot and ready, anytime. Every Melt location knows about every customer order, so a customer never needs to decide when or where to pick up their meal. After ordering, the customer will receive a QR code on their smartphone that can be scanned at any restaurant location, allowing them to skip the line and pick up their freshly-made order within minutes."

While the store experience is important, the taste of the food has to match.  Other food services startups are attempting to bring good food to customers in a streamlined way.  Lyfe Kitchen is testing their systems and menus and could benefit from an Order Board and smartphone ordering.

The infrastructure for remote ordering, displaying pickup queues on Order Boards, etc are slowly coming forward.  Yorder has deployed in-stadium purchasing using PayPal and their smartphone apps.  Customers can watch a baseball game, use their smartphone to order and have their food brought to their seat.  Yorder has developed the back end systems to enable any mobile kitchen or food truck to receive smartphone orders for pick-up or delivery.

We think it's worth paying attention to these experiments.

What Alternatives to Bitmenu Miss

Recent news about Gumroad and Kout bring up the excitement level related to selling through social media using just a link.  Both are nicely designed interfaces that create a link that Sellers can post anywhere.  As with the Bitmenu service, these links require payment before the item being sold is made available.

Both services charge similar service fees as Bitmenu (see our pricing).

What is different occurs after a payment is made.

As several commenters have noted, with other services a buyer can easily share their access link to the item they have purchased, thereby providing the item for free to their friends.   Bitmenu does not reveal a single URL for fulfillment.  The download link is unique to each transaction. Once it is fulfilled, anyone else using that path is given the opportunity to buy.

It's human nature to share with friends.  Our records show some 2% of sales through Bitmenu have been generated by the confirmation email being shared.  In fact, we encourage buyers to share their purchase tickets:

Pitfalls of Download Scam Sites

A recent article published by the Iowa State Daily draws attention to rogue download sites masquerading as helpful services.  "Touch Textbooks", they say, is actually an off-shore site that makes its money off of the $49 sign up fee they charge students for unlimited access to their catalog.

"The site is self-proclaimed 'verified by Visa' and 'safe and secure.'

There are even reviews listed on blogs and other consumer websites

claiming the legitimacy of Touch Textbooks, but do not be fooled."

What's wrong with this picture?  While the service seems attractive to students used to paying hundreds of dollars for college textbooks, the site actually contains PDF versions of far fewer than the millions of e-books they proclaim, and none of the publishers (much less the authors) receive any compensation for the revenue it generates.

A quick Google search brings up many forum posts touting this site:  Some of these posts have received quick replies, such as:

"Since college text books are copyrighted material, there is no way the copyright holder is going to allow them to be downloaded for free. If someone is indeed downloading text books, it's because they're pirating them. In other words, it's illegal. My advice; don't do it."

How is Bitmenu different?  Our publishers must identify themselves and be subject to take-down requests.  Our Terms of Use, which each Bitmenu Seller must approve, explicitly states that each Seller must have the rights to distribute the works they upload into the Bitmenu System.  Furthermore, when a buyer purchases through the system, the purchase they confirm at either PayPal or Amazon Payments goes directly to that Seller's account.  A copyright holder that believes some material used by a publisher in the Bitmenu system infringes on their copyrights is directed to our DMCA policy and can also claim fraud with the payment processor. 

Copyrights Under Scrutiny

The recent non-vote on new anti-piracy legislation has touched a nerve helped in large part by some of the most visible sites on the internet flexing their muscle.  The RIAA was given space in the New York Times to express their views and that piece has generated hundreds of responses, including one of our own.

The general tone of the comments reflects the shifting sentiments regarding how creative works are distributed and consumed, and who should pay.

Mechanisms like Bitmenu are designed to exchange payment for content delivery to any device via any service.  We think creative artists and rights-holders will make their money embracing creative packaging for their fans.  Many casual fans might share a piece of the package but a healthy audience will seek out and pay for the authentic product in all its richness.

Our comment on the New York Times piece, What Wikipedia Won't Tell You:

The old saying was: "Never pick a fight with someone who buys his ink by the barrel". It meant that those who controlled the means of production held all power. In media, all rights to copy works went to them.

Times haven't changed that much. Who creates the copy of a web page, movie or song for each user? It's not the author of the page or the musician or filmmaker. It is the site that automatically delivers content, ads, social graph elements and everything else, all neatly packaged for whatever device the user is viewing at the time.

In this scenario, the creative work is the site itself, and the content is merely useful as a mechanism to draw an audience that is of interest to advertisers, who pay for the privilege of being included in the dynamics of the page generation process.

Artists and rights-holders who wish to derive some benefit beyond considering "piracy as the next radio" as suggested by Neil Young would be well served to establish easy to use mechanisms for users to purchase and consume their works.

UPDATE:  The New Yorker has published a humorous look at the issue. 

Neil Young Calls for High Fidelity Music Distribution

Musicians who want to deliver superior recording performance are saddled with "lowest common denominator" services.  In a fascinating interview, Neil Young describes his mission to "rescue music" from the poor-quality MP3 files most services provide.  Since iTunes, Amazon, YouTube and other popular services automatically downgrade audio quality, what Neil is talking about requires a different path to market.

Here's a snip from the Verge, when he referred to Steve Jobs as one rich guy who preferred listening to his music on vinyl:

Young is calling for a new digital ecosystem of high quality music files and he believes that Jobs would have gotten there had he lived long enough. On the distribution side, Young isn't particularly concerned with the effects of piracy on artists, he's more concerned that the files that are being shared are of such low quality:

"It doesn't affect me because I look at the internet as the new radio. I look at the radio as gone. [...] Piracy is the new radio. That's how music gets around. [...] That's the radio. If you really want to hear it, let's make it available, let them hear it, let them hear the 95 percent of it."

In other words, let the world share MP3s all they want, but also make available high fidelity versions (he mentions that pro-quality 24bit/192kHz files compare nicely to vinyl records or tape masters). MP3s typically have only 5% of the data of such high quality files.  Neil says the download might take 30 minutes but for some people, and for the artists themselves, this is worth paying for.

We couldn't agree more and stand ready to support any artist to deliver large, high-quality music to those who appreciate the difference.

MegaUpload and Social Distribution

The recent FBI take-down of the internet's largest "file sharing" site, with over 150 million users, has sent shock waves through the media world.  Other cyber-locker sites might possibly be closed and some have voluntarily shut off services.  MegaUpload paid users to upload files in bulk without asking questions, and then offered downloaders more responsiveness and bandwidth as a paid subscription service.  Some estimate the service earned over $40 million last year.

The media world is being turned upside down by services that charge for access but do not pay rights holders.  These services make downloading content easy, without requiring registration, through any browser to any device.  Given the success of the Louis CK experiment (see earlier post), simply requiring a reasonable fee prior to download could go a long way towards making such service irrelevant?

UPDATE:  3/2/2012

Kim Dotcom, MegaUpload's founder and the key player in this story, has been released on bail and promises to fight for the company that has been taken away from him.

As described by the transcript:  He has two main defenses: firstly that the site is far too large for him to police individual instances of piracy, and secondly that competitors like Mediafire and Fileserve provide the exact same service. Dotcom also claims that neither the MPAA nor any movie studios ever contacted him or his site before taking legal action.