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EBay Inc. (EBAY)’s PayPal payment service will join with cable company Comcast Corp. (CMCSA) and set-top box maker TiVo Inc. (TIVO) to let television viewers donate money and buy goods from their TV sets using a remote control.
Starting as early as this fall, viewers with PayPal accounts will be able to click on TV commercials to buy advertised goods, make donations to political campaigns and nonprofits, and ask advertisers to text information to their phones, PayPal Vice President Scott Dunlap said in an interview. Consumers also will be able to electronically collect coupons for shopping with PayPal in stores such as Home Depot Inc. (HD)
The deals are part of PayPal’s effort to boost revenue by providing its payment service on more devices. It already powers 20 percent of global e-commerce sales and a third of purchases made on mobile phones and tablets, Dunlap said. TV-based commerce could be as big an opportunity as mobile, he said.
“We think television is the next big one coming down the pike,” Dunlap said. PayPal expects to process $7 billion of mobile payments this year, according to San Jose, California- based EBay’s first-quarter earnings release.
The average U.S. consumer watches more than 34 hours of television per week, according to Nielsen Co. PayPal found in a survey of cable subscribers that about 49 percent of them are open to the idea of making purchases through their TVs.
PayPal, which has almost 110 million active registered accounts, will make money by charging transaction fees, Dunlap said. Its partners, including Comcast and TiVo, may be able to charge higher rates for ads linked to the purchasing technology or add transaction fees, he said.
The service will be available in homes with TiVo Premiere four-tuner digital video recorders.
“TiVo’s interactive ads have always been about giving advertisers a way to connect with viewers on the viewer’s terms,” Tara Maitra, senior vice president of content and media sales, said. “Working with PayPal now provides an easy way to go from ads and content directly to purchasing products on TV, bringing the effectiveness of advertising to the next level.”
Comcast has agreed to work with PayPal on TV-based commerce, according to an Internet posting today by Tony Werner, Comcast’s executive vice president and chief technology officer.
“We’re in the very early stages of our discussions,” he said.
PayPal has been inching into T-commerce, as it’s called, for several years. It started working in 2010 with Canoe Ventures, founded by cable companies to create interactive TV products and services.
Last year, PayPal added a “Watch With EBay” tab to EBay’s iPad app that lets tablet users buy products shown in ads they’re watching on TV. Users tap the tab, type in their Zip code, cable provider and channel they’re watching.
“Consumer expectations from phones and tablets are coming directly to television,” Dunlap said. “A lot of the pieces are coming together to make T-commerce possible.”
To contact the reporters on this story: Olga Kharif in Portland at firstname.lastname@example.org; Cliff Edwards in San Francisco at email@example.com
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