Texting In Purchases

We were in the car this morning headed to the airport at 5:15am and surprisingly were having a coherent discussion about the new iTunes rent a movie service.

My kids are big users of iTunes to buy TV shows but have never been interested in buying movies. It’s probably because of the price point. But the idea that they can “rent” a movie for $3-$4 by downloading a file that will erase itself in 30 days really interests them. I explained that this model has been around for years (Starz comes to mind) but hasn’t taken off. They think Apple/iTunes will have a different and more successful experience.

But everyone, particularly The Gotham Gal, pointed out the 2 hour download is a problem with this model. If you want to watch a movie right away, this won’t work.

I suggested that Apple add a feature to iTunes that allows you to send a text message to iTunes with the name of a movie or a song or a TV show and it will start downloading it to your computer right away (or the next time you connect if you are offline). Everyone loved that idea.

The Gotham Gal said that Amazon should do the same thing. She gets her best book ideas when she’s out and about, with friends, or reading the paper on the couch. If she could simply whip out her phone, text amazon, and be done, she’d love that.

I honestly don’t know if anyone has tried this model. I am sure there are startups that offer such services and I am interested to hear about them. I also suspect that this kind of behavior is common (or is becoming common) in the countries where texting has been popular for years.

But I think texting has arrived in a big way in the US in the past year and it’s time for the large web commerce players to incorporate short codes and texting into their purchasing systems. It’s going to be big.

#VC & Technology

Comments (Archived):

  1. Whit

    “But everyone, particularly The Gotham Gal, pointed out the 2 hour download is a problem with this model.”I was curious about the wait time for the download and gave the service a test last week. I was watching the movie (good quality) within a minute. No hiccups or interruptions. Being an expat in Tokyo this service is extremely appealing, although Netflix with it’s flat fee makes for an interesting choice.

    1. brooksjordan

      Yep, you don’t have to wait until the movie downloads on iTunes. You just give it a head start, a couple of minutes, and then watch it while it downloads in the background.

  2. Bruce Barber

    Apple is flush with cash…Should they BUY Netflix?


    You’d need secure texting I would think. Texting to a wish list would be cool tho.

  4. Mike Orren

    I don’t think text will be the way to go. Too easy to do graphical/enhanced info and too hard to parse freetext submissions.Those of us with jailbroken Iphones already have a Netflix app where you can search, get info on films and reorder the queue.You are conceptually correct, but it’s already too easy to have a full featured app vs. a text mechanism.

  5. Michael Sitarzewski

    Why not just a mobile version of the iTunes store? Something along the lines of what Amazon has done for the iPhone.

    1. fredwilson

      texting is the universal mobile app. not everyone has iPhones. not everyone has phones with a fully functioning web browser. i have the latter on my curve and still enjoy texting on a phone more than browsing

  6. MJ

    The computer you use to rent the AMZN Unbox movie doesn’t have to be the one that does the download and rendering. Personally, I order the movie from the office and, by the time I get home, the Media Center PC that’s connected to our HDTV has already downloaded the movie. All that’s required is that the computer I use for rendering be powered on when the order goes through on the site. Depending on that computer/device, that can be annoyingly noisy though.SMS is a variation of that theme. With the iPhone, I’d expect Apple to let me use iTunes on that phone to order a dowload on their always on yet silent iTV at home.

  7. ErikSchwartz

    The larger problem here is the last mile infrastructure of broadband is not ready to handle the widespread adoption of IP delivery of full resolution video, let alone HD video. In a cable system, you share limited bandwidth (say 100 Mb/s) with everyone in your node. a few people in your node downloading HD is not a problem, hundreds (or thousands in some nodes) of people trying to download HD video and the system will grind to a halt.It’s not about the backbone, it’s about the node in the neighborhood. Upgrading those will be very expensive. This is why TW cable is experimenting with metered bandwidth in Texas.

  8. Rob Schoening

    The problem with two hour downloads is the two hour download.The only thing in technology that has increased slower than last-mile bandwidth is battery life.It is unfortunate.

  9. seth godin

    jott.com lets you do this with books now, via voice.

  10. Chris Dodge

    Whit mentioned this above, but one doesn’t have to wait 2 hours for the download. As long as you have a decent throughput (say 2mb/sec), you can watch the iTunes movie rental very quickly – in about a minute. HD rentals will be trickier.As for your “remote control” request, many major services allow “triggering” downloads to different machines (e.g. being on a work machine and starting a download to a home computer). Using a cellphone would be interesting, but Authentication is a bit tricky and you don’t want passwords being sent around in the clear. Maybe using DTMF via just phone lines would be a slightly better option.

  11. Nick Molnar

    I certainly hope that one of the apps apple releases with the SDK is some sort of AppleTV/Mac controller (a multi-touch version of Salling Clicker). That, combined with new airport express software for adding additional audio zones, could turn the Apple TV into a Sonos killer. Queueing up downloads would be much more elegant (and apple-ish) in a slick multi-touch UI than via sms too.

  12. Christian Sterner

    I like it, and I think the point being made is that text adoption has reached a point where anyone consumer-account-oriented on the web should adopt something like this. As for authentication, shouldn’t a phone number be enough? If not, the download could still occur, but the end user would simply have to authenticate to make use of the download right? There is something there…these texts could not only trigger downloads, but populate shopping carts of favorite merchant sites etc.I totally get the point that people should just be able to access their merchants via iPhone, but believe the point is that the adoption rate isn’t nearly squared up with text messaging yet.

  13. sdawara

    This behavior is common in India where texting is popular. We (BookEazy.com India) do it for Movie Showtimes and tickets. It is an obvious application for users on the move. We’ve simplified it for users on the move to a great extent. Here is a Video demo of how we do it -http://www.youtube.com/watc…The Movie Names and Theatre Names might seem odd, so here’s the associated blog post explaining the demo, http://blog.bookeazy.com/20…Flyers can also purchase airline tickets (!!) over SMS. I am not entirely sure if this has taken off since it feels incredibly complex, with users required to remember multiple steps.http://www.yatra.com/YT/spe…- Santosh

  14. harpos_blues

    Fred,Amazon has offered purchases via mobile phone for several years now. Please see:Shopping On Amazon With Your Wireless Phonehttp://www.amazon.com/gp/he…As someone has mentioned in an earlier comment, SMS->vendor would require some sort of multi-part authentication between the phone user / wireless carrier and the vendor. In the US I think this would be a bit tricky for a third-party (ie start-up company) to negotiate such a service across multiple carriers.The amazon wireless apps work really well. I haven’t tested all the features recently, I’m interested to see if I can add items to my wish list.

  15. Dhru Purohit

    This would be such a sweet business model. Especially for twitter.Text ” buy: Flight of the Concords DVD”Reply: “Are you sure you want to buy Flight of the Concords DVD?”Text: “Yes”

  16. Walnut Creek Kango

    I love the text idea. If Apple goes with it, make sure they pay you royalties!

  17. Aaron King

    I send this comment from my blackberry. You are on to something good here! I’d offer that texting is not the only potion. Could also have a tighter integration for advanced devices, like google is doing with blackberry.

  18. Tom Whitaker

    Fred, early trials that we conducted indicate that buying via text message is a feature that users want. The key to the success of the model will be to allow consumers to buy from a variety of merchants not just Amazon, iTunes, etc…A platform that allows brick and mortor retailers to offer a service like this could change the retail buying process significantly. (Twitter would be perfect) something I recently touched on in a conversation with Jack.JetBlue is on the right track. But they don’t have the text-to-buy and flights aren’t exactly something you buy on impulse unless your a real road warrior.

  19. johndodds

    I’m interested to know people’s thoughts on why texting has arrived in big way in the US this year. Over here (UK) and elsewhere texting exploded many years ago (albeit to the surprise of the phone companies) because of the huge price differential – my understanding is that this doesn’t apply in the US, so what has happened this year to change things?

    1. fredwilson

      From my perspective its kidsTexting is email for my kidsIf I want to get a message to them, that’s how I do itOnce I get in that habit, the next is my wife, then friends, then twitter,etcEcommerce is a natural next stepfred

      1. johndodds

        Interesting – the ecommerce possibilities of phones have been mooted for a long time in Europe (especially scandanvia) and I’m sure they’ll come but it’s been very slow. There’s a definite economising imperative amongst kids (they operate numerous phones in order to minimise bills and maximise free texts and calls) that would seem to me to be militating against it but I’m sure it will come eventually if only because of its micropayment potential.

  20. Dan Weinreb

    I would not want to simply send an SMS text message to order a product. I like to see information about the product (normally, in my web browser) to confirm that this is indeed the product that I had in mind, and also to decide whether to buy a used copy, etc. So I’d want to see an app doing at least a small subset of web browsing, so that I could get that feedback.I also get my best book ideas when I’m out and about, usually because I’m commuting and listening to the radio. So I press the “voice” key on my steering column, tell the car (talking Bluetooth to my cell phone) to call jott.com, and send myself an email reminding myself to shop for that book. It’s only medium-high-tech but for now, it does the job well enough.

  21. Micahel

    It’s been a very successful feature at http://www.Campusfood.com since we added it last year. We connect students to local restaurants in 300+ college towns for online food ordering, and now mobile ordering.Favorites (or the Usual) are created on the web and given a nickname. Just txt’ing the nickname to shortcode 36368 places the order.We now have many more touchpoints in interacting with our customers, from traveling to and from class or coming home from the bars. It should be a natural extension of many commerce business models. It’s already moving off the computer to the phone and the couch.Here’s a link to a NY Times article on TXT ordering from last summer including Campusfood.com TXT Ordering.http://www.nytimes.com/2007

    1. fredwilson

      Great work and great commentThanks!Fred

  22. jezarnold

    a great idea! its such an easy thing to set up on any online account as well.. Set up with your mobile number, Amazon / Apple send a 5 digit short-code to you, and from then on you can send requests in! A quick response with what you asked for… and its all done!Looking at the comments, a few people mention jott (only available in USA) and mobile web browsing… I believe mobile phones and simple texting are ubiquitious and much more useful to the majority of people…

  23. Heleen

    I live in the UK and order my pizza by text from Dominos. They have a record of my phone number, favourite pizza , address and credit card so all I do is text, they send a text back asking to confirm (yes) and then presto pizza arrives within about 20 minutes.

  24. ceonyc

    I’ve often wanted to do this with food delivery… text on my way home to have something there shortly after I arrive.

  25. Ashley

    2D Barcode scanning with a cell phone will soon be deployed in the US to help users to order products adn digital services with their cell phones. Hundreds of digits can be embedded in small codes, that can be scanned and trigger sales to be ordered.SMS is great for simple data entry, but gets harder with multiple options and complex order processes.How often have you read a magazine article (in print) on a plane you wanted to send to a friend, or seen a billboard ad for a new TV show you wanted to record on your Tivo…text can work for some other these use cases, but 2D barcodes will be even more useful still….

  26. Stephen

    Interesting, I am about to alpha launch a mobile search where email (so many mobile devices are email enabled now) is the method of initiating the search and receiving the results. Emails mean you can Cc people, larger content of message, receive attachements, etc… An element of this new service is to also offer transactional aspects like those discussed in this texting article but instead via email. Using the iPhone on the go is still not easy, simply sending an email and receiving the result is much easier.

  27. Maxine

    My husband and I haven’t had cable in 6 years and we are absolutely loving Netflix downloads. Watched The Office Season 3 this weekend show after show. No commercials, no interruptions and less than 10 seconds to begin viewing. For us, it’s about the immediacy and it has also stopped us from spending on movies through Max Delivery. That said, we have to watch it on our Toshiba as we cannot view on my Mac. Grrrrr. . .

  28. Brandon Watson

    Perhaps a simpler approach would be just to have a Netflix-like queue, where you always have 3 movies waiting for you on your computer. Instead of the DVD showing up, they’re just there.

  29. lukemelia

    Texting to initiate purchases is indeed a cool idea. As a few other commenters have mentioned, though. The 2-hour download is not a real problem with iTunes rentals, though.My wife and I watched Waitress the other night from iTunes rentals, and in the time it took us to get settled on the couch, we started streaming the movie in HD without any interruption. Great movie, BTW!

  30. RacerRick

    I have an elaborate blackberry-to-gmail-filter system that works like that.I email book/restaurant/music suggestions, etc to my gmail account. Then I’ve setup filters based on the subject headers.It’s great for reminders/saving… but it was a pain to setup.A text based service that does this would be very cool.

  31. scott partee

    Here in Vienna, as in the rest of Europe, texting is huge. People are tapping away everywhere, and the utility is quite good. For example, one can text the public transit system and receive a ticket, which is then added to one’s mobile bill. Numerous vendors accept texted orders, etc. But you have a *great* idea there — it really needs to go to the next level.I think the security is good enough as is and it would be procedural. You’d text your order to amazon as described by Dhrumil. The only required first step would be that you register your mobile number w/ the vendor before and give them permission to bill you for purchase request coming from your number. So you’d text;1) Rent blade runner final cut2) The vendor replies with a description of what you asked for and asks for a verification.3) You reply4) Vendor replies “download started successfully on your home computer”.THere’s no real security problem other than permission. You don’t exchange any sensitive information, and the reply mechanism ensures somebody can’t text orders to your account.Neat. I want it.

    1. pwb

      As some have pointed out, you can start watching the movie in about a minute.The best test-to-pay use case I’ve seen so far is paying for parking. There are several municipalities and companies rolling out such service.PayPal’s “Text-to-Buy” is also interesting as a general putrpose payment solution.

    2. fredwilson

      Me too!Security is overratedAnd convenience is underrated

  32. MIke

    I’m waiting for a subscription service that streams audio and video on demand and stores my favorites and playlists. Once that is in place I won’t need to own or rent anything and I won’t need the storage space on my device. Anyone know who’s in the lead towards this model?

  33. Greg Cohn

    i’ve always wondered why netflix doesn’t let you sms to add something to your queue. their correlation between search terms and movie results is certainly good enough to get it right most of the time.

  34. Peter Kafka

    http://www.gomobo.com/ does this for fast food/delis as well. presented at last nytech meetup. seems like major drawback is that system has to be preprogrammed. so if you always want to get a turkey club prepared the same way at your local diner (and they use the system) works fine. but if you want sandwich w/out mayo, or extra turkey, or something else altogether, requires more work.

  35. kskobac

    interestingly and along the same vein i read an article about pizza delivery companies now accepting orders via text message: http://www.geek.com/omg-piz

  36. alwayslookaround

    I agree, payments via SMS will soon take off in a big way. I had the epiphany of SMS based payments about a year ago, shortly after I joined a mobile SMS company. I was ecstatic about the vision (I was convinced I finally found my “go get funding” idea), started researching it, and found that PayPal and TextPayMe already had the product I envisioned:https://www.paypal.com/us/chttps://textpayme.amazon.co… (Gotham Gal will love this for Amazon purchases)Neither company pushes/markets the product as much as they should, which is a HUGE mistake, but I’m sure both will receive a lot of attention as soon as consumers latch onto the concept. My guess is that the ramp up in demand will happen in about 6-9 months.As for me, I’m still working on my “go get funding” idea. 🙂

  37. Noah Weiss

    Last year I co-authored a paper studying this very idea. We focused on facilitating participants expanding on the ‘snippets’ they created on their phones. While a slightly different task, the findings are certainly relevant.One interesting thing to note is that even when given the opportunity to use text, voice, or mms to create snippets, the vast majority of users preferred using text messages almost all the time.See the paper at http://hci.stanford.edu/pub

  38. Nivekv

    Don’t give a cent to Apple! Just go to your local hollywood or Blockbuster, or even the mail one (forgot the name) but DON’T GIVE MONEY TO apple!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  39. markslater

    the problem fred is one that was discussed in another topic – the carriers and their willingness to allow these type of apps to function through the deck. I suppose if you were to text to itunes your order, and the settlement were executed through your itunes account and not the carrier, then this would work – but the carriers would not want this. They still foster delusions of grandeur that they are above being a plumber unfortunately.on a totally seperate topic – i was travelling in the pennines (between manchester and leeds) yesterday and fired up that new google maps app for the BBerry where my location identified not by GPS (my curve does not have GPS) but by triangulating my location in relation to others – it worked like a DREAM – it was extremely accurate, snappy and got me found when i was lost!

  40. Dean Collins

    I agree SMS is a convenient method to interact with a web service however dont ask USA based carriers to implement ‘on-deck’ or premium SMS billing as they dont have a clue.It’s staggering that the USA carriers believe single bill services warrant around 50% of the revenue (yes you read that right 50% of revenue – not profits).So in your example with Apple and their $3 rental – Cingular expect to be paid $1.50 for on-deck premium SMS billing.I’ve consulted to a number of companies both here in the USA and overseas about applications suitable for mobile ordering situations (check out http://www.collins.net.pr/blog for positings) but yet USA carriers still dont get why iMode third party content sales are booming in comparison.Cheers,Dean Collinswww.Cognation.net

  41. Lily Denver

    I agree texting in is a great idea but the movie rental service is horrible false advertising. I downloaded a movie only to find that the second I hit play a warning came up saying “Your movie will expire in 24 hours from now.” They give you 30 days to watch the movie but 24 hours once you’ve started it. I think that’s pretty screwed up! Apple have become such con-men. I still think the reason they haven’t put the cd-rom drive in macbook air is so that people will buy more music and movies from itunes. I also completely agree with your post on the ipods!