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Pay-per-view coming to PCs?

Wave Systems signs an agreement with IBM to include Wave's credit metering chip in IBM computers.

Paul Festa Staff Writer, CNET News.com
Paul Festa
covers browser development and Web standards.
Paul Festa
2 min read
A chicken in every pot, and a credit card in every PC.

That may be the future according to IBM and Wave Systems, which just signed a deal to include Wave's credit metering chip in IBM computers.

The WaveMeter chip functions like an electronic credit card or ATM machine. Users pay for online purchases through an account established on the internal chip. The local account is funded through online money transfers via the Wave central servers using triple-DES encryption.

While no specific product plans were announced, IBM is looking at its entire computer product lineup, from Aptiva models to servers, according to Wave Systems vice president of sales Craig Thueson. A WaveMeter-enabled IBM computer is expected to ship next year.

Wave expects to sign on a significant number of major original equipment manufacturers in the coming year, said Thueson.

The two companies will work together to make the chip an industry standard. Terms of the deal were not disclosed, but Thueson said it included a "financial incentive" for IBM.

Wave is touting its metering system as a more secure method of collecting money for Internet commerce. But the company also claims the chip will create an entirely new method of distribution that will allow users to pay per use or rent to own.

"Would you rather pay $39.95 at first for a game you might not play more than once?" asked Thueson rhetorically. "Or would you rather pay a dollar per use up to ownership at $39.95?"

The local chip system has a notable advantage over the online transaction protocol known as SET, or secure electronic transactions, in that it does not require an online connection for each transaction.

The WaveMeter also contains an incentive for the computer maker: For each transaction fee, the OEM gets a piece of the action.

"The way it is now, the hardware OEM sells the PC and turns over the customer relationship to AOL," said Thueson. "What we're doing for the hardware community is turning around that relationship. We're keeping it alive for the computer maker."

Another result of metering is 100 percent product registration, said Thueson, who noted that a minority of products sold through the indirect channel wind up getting registered.