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EcommerceBytes-NewsFlash, Number 2835 - June 27, 2012 - ISSN 1539-5065    2 of 3

Merchants, Get Ready - PayPal Poised to Power TV Commerce

By Ina Steiner
June 27, 2012

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Wall Street firm Janney Montgomery Scott LLC says "T-Commerce" is a new channel opportunity for PayPal. T-commerce refers to commerce over the television, and Janney analysts said technology is now in place to finally deliver the interactive TV buying experience. In fact, T-commerce is now moving to the merchant "onboarding" phase, it said.

"We believe PayPal is well positioned with its large customer base (110M active accounts), merchant network, and customer service capabilities to provide a cross channel/programming checkout experience."

The firm hosted a conference call on Friday to discuss the disruption and growth opportunities around interactive advertising/commerce and Smart TV innovation. Participants included Mark Wenger, Director of Connected Devices and iTV at PayPal, and Tara Maitra, Senior Vice President, General Manager, Content & Media Sales at TiVo.

Janney said PayPal has entered into an alliance with TiVo. Starting this fall, TiVo subscribers can use their remote to purchase goods on TV commercials, make donations, or request more information. Consumers can also use the platform to collect digital coupons for merchants that accept PayPal payments.

What It Means for Merchants
PayPal's Wenger indicated that merchant integration with PayPal would be easy, according to Janney, "much as PayPal has extended relationships from online sites to mobile for top retailers. PayPal indicated that pricing would likely not be different than its other channels in terms of take rate."

Both TiVo and PayPal expect to roll out initial ads this Fall. Wenger suggested that early efforts would focus around "quick wins," such as interactive ads in shopping channels and infomercials then moving to more traditional 30 second ads.

Longer term opportunities center around the ability of content creators to "tag" items in shows - enabling viewers to click on those tags to a product landing page, etc. TiVo suggested the pricing in this type of model would likely be on a CPA (cost per action) basis rather than CPM, Janney wrote.

"We believe a seamless interface and checkout is essential for T-Commerce," analysts wrote. "TiVo provides a solid next generation interface, while PayPal's participation lowers the hurdle for the nearly 110 million account holders that are comfortable making payments using PayPal."

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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