News junkie's open-source project links Bitcoin with publishers

Ankur Nandwani is a news junkie who keeps hitting pay walls. He would pay for content, but not for a subscription.

Nandwani, 27, merged his interest in news with Bitcoin, a virtual currency that many people think will change the future of payments. With co-founders Bo Li and Valerie Chao, he developed Bitmonet, an open-source tool that lets publishers accept micropayments in Bitcoin for news stories.

Bitmonet is just a side project for Nandwani, who has a day job as a senior software engineer in San Francisco. He started analyzing Bitcoin about six months ago and wanted to grow interest in the virtual currency.

"It's all about encouraging bitcoin adoption," Nandwani said. "I think in the early stages of the bitcoin ecosystem.....it's better to increase bitcoin adoption. We can think of making money later."

News publishers have struggled to strike the right balance between generating online revenue and not alienating readers -- already bouncing from one free online news outlet to another -- with pay walls. Many tease users with free stories and gently nudge them to paid subscriptions when they hit a limit.

But charging one-off fees for news stories is a hassle: users don't want to create an account and enter their credit card details for a single news story. It's easier just to move on.

Bitmonet leverages Bitcoin's strength as a digital substitute for cash. In a demonstration on Bitmonet's website, clicking on a story brings up a pop-up window offering a news story for US$0.10, a one-hour pass for $0.15 or a day-long pass for $0.20.

The one-hour pass costs 0.0012 of a Bitcoin. Clicking the "Pay with Bitcoin" button launches Bitcoin wallet software on a person's computer. Web-based wallet software can be used by copying the payment address, Nandwani said.

The transaction is painless: users don't have to enter their financial details or create an account with the publisher.

Bitcoin's peer-to-peer network uses a system of computers called miners to cryptographically verify that a transaction is legitimate. Usually, a transaction needs to garner six "confirmations" before it is considered complete, which at times can take up to three hours.

But Nandwani said merchants can accept as low as one confirmation to let people read the story as soon as possible.

If users choose to buy time-based access to a site, they will have to remember to keep their cookies, which are information files retained by a web browser that are used by websites to remember certain user information.

It's a small sacrifice, but one to keep in mind since many people configure their browsers to delete their cookies for privacy reasons. Nandwani said "we are trying to maintain a balance between creating an account and keeping it frictionless."

Bitmonet is configured now to use BitPay as a payment processor, but it can use different ones. BitPay, based in Atlanta, specializes in processing transactions for merchants. BitPay converts Bitcoin revenue to cash and wires it daily to a merchant's bank account.

Nandwani said Bitmonet plans to add a WordPress plugin in the coming weeks for micropayments on that publishing platform. Other development plans include creating SDKs (software development kits) for Android and iOS that would allow Bitmonet to be used for other things, such as virtual goods, he said.

Publishers fight Apple e-book ruling

Woman selecting e-book Apple has been ordered to terminate agreements with publishers, which include retail price deals HarperCollins, Simon & Shuster and Penguin are among publishers who have filed a complaint against restrictions imposed on Apple by a US court.

Last month Apple was found guilty of conspiring with publishers to fix the price of e-books bought via iTunes.

It was ordered to terminate deals with five major companies and allow other e-book retailers to sell to iPad and iPhone users for the next two years.

The publishers say they are being punished by the restrictions.

Under agreements put in place between Apple and companies including Hatchett and Macmillan, electronic book price-fixing took place, creating unfair competition for other retailers, the court ruled last month.

At the time most of the publishers reached separate settlements totalling more than $150m (£96m) but Apple said it would fight the "false allegations".

According to the Associated Press news agency, the publishers' complaint says: "The provisions do not impose any limitation on Apple's pricing behaviour at all.

"Rather, under the guise of punishing Apple, they effectively punish [publishers that settled in the case]."

Garner analyst Van Baker told AP that the ruling seemed "heavy-handed".

"It is basically putting a stake through a portion of Apple's business, and I confess to being surprised by that," he said.

"It strikes me as a pretty heavy-handed solution to the issue."

Judge rules Apple colluded with publishers to fix ebook prices

Turns out it doesn’t hurt any less when the book the judge throws at you is an ebook.

U.S. District Judge Denise Cote on Wednesday handed down her ruling in the case between the Department of Justice and Apple over ebook price-fixing, saying that Apple conspired with the five major publishers to raise rates. A trial on damages will be held to decide how much relief the U.S. government and a coalition of U.S. states are entitled to.

The five major publishers—Hachette, Macmillan, HarperCollins, Simon & Schuster, and Penguin (which has since merged with Random House)—all chose to settle the case with the government and states before the trial kicked off last month; as part of the settlement, they are now required to submit for approval any ventures undertaken in collaboration with other publishers. Apple was the only defendant to go to trial, but the company maintained that it had done nothing wrong.

“We’re not going to sign something that says we did something that we didn’t do, so we’re going to fight,” said CEO Tim Cook during an interview at the D11 conference in May.

The trial itself had its ups and downs, with testimony coming from Apple executives like Eddy Cue, publishers like Penguin CEO David Shanks, and even Amazon personnel like Russell Grandinetti, the retailer’s vice president of Kindle content.

However, the ruling was itself presaged by comments made by Cote before the trial began, in which she said she believed “that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of ebooks.”

Still unclear, of course, are the long-term ramifications of the decision. Most likely to benefit is Amazon, who was alleged to be the target of the collusion between Apple and publishers. But some reports suggest that Amazon has already started to raise prices.

Apple, for its part, won’t take the judgment lying down. “Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations,” Apple spokesman Tom Neumayr told Macworld. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong and we will appeal the judge’s decision.”