QuickieURL

Kwedit, the innovative and suddenly controversial payments platform for virtual goods, is releasing some early data.

The service lets users promise to pay later in lieu of a direct credit card payment when they want virtual currency for social games like Farmville. It’s not a legally binding promise, but users have an incentive to pay amounts owed because that allows them to get more virtual currency through the service. Users can pay by, among other methods, mailing in cash or paying at a 7-11.

When the product first launched they had no idea what percentage of promises would be repaid. Anything at all is incremental revenue to game publishers, and since the stuff they’re selling has no marginal cost (virtual currency), it’s all upside. But after nearly two months of being live, they say the repayment rate is 25.9% If you’re a credit company that would put you out of business.

But for game publishers, that’s a staggeringly attractive monetization option. Hopefully the company (or its partners) will also disclose the monetization rate as well down the road. Because right now game publishers are only able to get cash out of 1-3% of users. If they can get another few percent to pay via Kwedit, and 25% of that money is actually paid, revenue from games can double or more.

It’s controversial because Colbert made fun of it, and then the Huffington Post and CBS jumped on the bandwagon. CBS actually called it “toxic.”

Founder Danny Shader posted a long response here. But the short version is this – the criticism is ridiculous. It’s coming in one case from a competitor (the Huffington Post article was written by the CEO of a company that promotes Visa cards to teens and adults, without any sort of disclosure on the conflict). And the author of the CBS article doesn’t appear to actually understand the product and seems more concerned with getting parents all worked up.

The really scary stuff in social games was the Scamville nonsense where teens and pre-teens where being tricked into putting long term subscription charges on their parent’s cell phone and credit card bills. Kwedit isn’t even close to that kind of evil. It’s simply a very clever way of monetizing social games, and the most innovative new payments product I’ve seen in a very long while.

We’ve talked a lot this week about the so-called “Location War” brewing at the SXSW festival in Austin, Texas starting tomorrow. That war will happen, but actually, there are likely to be a lot of winners because a few of the location-based services should be able to leverage the exposure to gain usage after the conference. Those with real bloodlust should probably be watching another war: AT&T versus everyone in Austin on their network.

AT&T’s struggles to stay up last year are well-documented. CNN recently ran a piece about how AT&T hopes to avoid a similar fate this year. But actually, “struggles” is way too kind of a word. If you were at SXSW last year and happened to be on AT&T’s network — like, say, if you had an iPhone, like many festival-goers did — it was an absolute nightmare. You couldn’t make a call. You couldn’t send a text. Data? Ha. At a few points early on I seriously wondered if I had forgotten to pay my bill and AT&T had simply shut my phone off — except that it was happening to everyone.

AT&T has a funny word for the failure, they like to say “unprecedented.” As in, the usage of its network was at level previously unseen as a strong percentage of the over 10,000 festival goers (just the interactive part) were using iPhones. Well guess what? Word is that is year, there will be some 15,000 people there for the interactive part. As Samual L. Jackson’s character, Mr. Arnold, says in Jurassic Park, “Hold on to your butts.”

I’m leaving for Austin tomorrow and I’m terrified of what the AT&T situation will be when I get there. So much so, that I have a back-up plan (which Sprint sent me just in time to test out during SXSW after reading some of my rants against AT&T). With attendance up as much as 50% from the previous year, the number of iPhones in use is sure to be through the roof as well. Did I mention that just about every location-based service known to man is launching an app at the event and hoping every single one of those 15,000 people use it all the time? And based on the early signs, they intend to.

You’ll remember that after Mr. Arnold says the above line in the movie, he’s savagely ripped limb from limb by a velociraptor.

But there may be hope for AT&T. They’re clearly well aware of the failure last year, and did try to solve the issue to minimal effect towards the end of the conference. I asked a company representative what they’re planning to do this year, and they have a plan of attack.

Much of what they sent me is fairly technical, but basically, they now have a system around the Austin Convention Center (where SXSW takes place) that’s the equivalent of 8 cell sites, with 50 antenna nodes to cover the whole venue. Also, they’ve greatly expanded network capacity, moving from one radio network carrier to three, boosting the spectrum available for phones to use. They also say they’ve expanded the capacity of the so-called “high quality” 850 MHz spectrum, which works better indoors because those signals can go through walls more easily. They also have the new HSPA 7.2 software installed at all of the 3G cell towers now. But don’t be confused: that doesn’t mean their network has been upgraded to 7.2 Mbit/s speeds (sadly, at the peak, it’s still half that in almost all of the country), it just means that the upgraded software is in place and should be more reliable and efficient.

But there’s more. AT&T has brought in two Cells on Wheels (the so-called COWS that they brought in to help last year), and also a third rooftop temporary cell site. Each of these are equipped with both 3G and WiFi networks to help alleviate overall network strain. AT&T says these three cells are placed in optimal positions around the city of Austin where they expect the most strain.

All of that sounds great, but I’m still terrified. Why? Because I live in San Francisco. AT&T has known for months that the network is awful here, and while there have been baby steps taken to improve it in some areas, more often than not, it’s still awful. Take tonight, for example. So if AT&T knows it’s bad here, but still can’t seem to fix it, why should I believe Austin will be any different? I don’t. I’ll just have to hope I’m wrong.

Or I’ll have to kick back, relax, and take joy in the bloodbath as iPhones are magically turned into glistening bricks being hurled in anger left and right. As I boot up the Sprint Hotspot, of course.

[photo: universal pictures]

Zimbalam, the digital music distributor from Believe Digital, launches in the US today.

The service lets artists submit and distribute their music through 25 of the most popular music platforms, including Apple’s iTunes and Spotify, in addition to “several hundred additional stores worldwide”. This makes Zimbalam the largest music distribution network as measured by number of stores and geographic reach, says the Paris-based company.

To distribute their music via Zimbalam’s network, artists are charged a simple annual fee ($29.99 in year one then $19.98 per year after for an EP or album) and then once the fee is recouped, get to keep 100% of royalties – after, of course, whatever commission is taken by each store. Additionally, following year one, artists won’t be charged by Zimbalam if they don’t make enough sales to cover the annual fee.

The official Foursquare account just sent out a tweet letting everyone know that today is already the service’s biggest day ever. This is interesting since it’s actually the day before the SXSW conference kicks off in Austin, Texas.

According to the tweet, Foursquare broke 275,000 check-ins (the previous record, set last Friday) for the day “hours ago.” This means they’re very likely well past 300,000 now and perhaps even higher. To put that in some perspective, just a month ago, Foursquare set a record with 1.2 million check-ins for the entire week. And that was double was it was the month prior. At today’s rate, Foursquare would be doing well over 2 million check-ins a week.

Today happens to be the first birthday of Foursquare, so they shared some numbers earlier. The service now has over 500,000 users, they’ve given out over 1 million badges, there are over 1.4 million venues in the system, with over 1,200 specials available. And in total, there have been some 15.5 million check-ins. But that was before today’s record numbers.

While there are well over a dozen location-based services launching something at SXSW, the main two competitors vying for users’ time are expected to be Foursquare and Austin-native Gowalla. For its part, Gowalla noted that it was “Amazing to watch the Gowalla action on the eve of SXSW. AMAAAAAAZING!,” earlier today. Both recently revamped their websites, and both yesterday launched their new iPhone apps. And judging from the Vicarious.ly data provided by SimpleGeo, both are absolutely on fire right now and could go nuclear this weekend.

Update: Gowalla has a range of just about every possible venue you can imagine for SXSW and so far (again, the day before the conference), they’ve seen 352 check-ins at the SXSW Badge Pick-Up alone.

There are no shortage of location-based services launching this week at SXSW in Austin, Texas. Many of them allow you to “check-in” places to let others know you are there. So how do you differentiate between then and decide which to use? Well, here’s one good way.

CauseWorld, is a free iPhone and Android app that lets you check-in places, but it has an added real-world bonus: big brands give money to charity when you do so. And this week at SXSW, CauseWorld is teaming up with TechCrunch to offer double point (which they aptly call “karma”) when you check in to one of over 50 venues around Austin (I’ll paste the full list at the bottom of the post), including the Austin Convention Center (where SXSW is held).

We’ve covered CauseWorld, which is the first offering from the soon-to-launch ShopKick, a few times now. It’s a great product because it takes an area that is red hot right now, location-based check-ins, and converts it into good deeds in the real world. For example, if you check-in at a store, you may earn 20 karma points. As you continue to accumulate these, you can turn them into real dollar donations for causes such as water in Sudan or trees in the Amazon. Brands such as Kraft Foods and Citi are currently giving the donations based on what users choose to trade their karma points for. The best part is, you don’t even have to buy anything — you simply check-in at various venues and earn the points. And again, this week at SXSW, checking-in with the app at a bunch of venues will earn you double karma points.

And like any good service with a gaming element, there’s a leaderboard to show who has donated the most karma points. And yes, checking-in can earn you badges, such as the TechCrunch one show in this post.

So if you’re going to be in Austin for SXSW this week. Or really, if you just want to do some good with your mobile device, check out CauseWorld. Find it in the App Store here, or in the Android Market (on your Android device).

Below find the 54 participating double karma Austin check-in spots:

1. Aces Lounge
2. Alamo Drafthouse
3. Amsterdam Café
4. Austin Convention Center
5. Austin Music Hall
6. B D Riley’s Irish Pub
7. Barbarella
8. Beso Cantina
9. Bob Bullock Theater
10. Buffalo Billiard
11. Café Mozart
12. Carver Museum and Cultural Center
13. Cedar Door
14. Chupacabra Cantina
15. Chuy’s
16. Clay Pit
17. Club Deville
18. Cuba Libre
19. Dirty Dog Bar
20. Elysium
21. Emo’s
22. Emo’s Annex
23. Flamingo Cantina
24. Hyde Park Bar & Grill
25. Iron Cactus
26. Karma Lounge
27. Kenichi
28. Kerbey Lane
29. La Zona Rosa
30. Lambert’s Downtown
31. Lustre Pearl, Lustre Pearl Bar
32. Malaga, Malaga Tapas & Bar
33. Malverde
34. Mellow Johnny’s
35. Molotov Lounge
36. Moonshine Bar and Grill
37. Opal Divines
38. Palm Door
39. Red 7
40. Red Eye Fly
41. Rudy’s Country Store and BBQ
42. Rusty Spurs
43. Salt Lick BBQ
44. Spider House Café
45. Stubb’s BBQ
46. Stubbs
47. The Belmont
48. The Best Wurst I
49. The Highball
50. The Scoot Inn
51. Uncorked Tasting Room
52. Velveeta Room
53. Victory Grill
54. Vortex Repertory

Back in November of last year, the location-based social event service Hot Potato launched at our Realtime CrunchUp. Today, they’ve taken what was a solid service, and made it a lot better with a number of upgrades.

First and foremost, there is a new iPhone application that just went live in the App Store. With a completely revamped user interface, the app makes it easier than ever to find and participate in events. Perhaps more importantly, it makes it really easy to create new events — and notably, the service has the nicest third-party Foursquare integration I’ve ever seen. When you click on the button to create an event, you can still manually enter a location, but if you happen to be around the venue, you can simply pick it from Foursquare’s list of venues with the click of a button. This drastically simplifies the event creation process since the venue metadata is already there.

This new app will be crucial for the SXSW festival in Austin, Texas, which starts tomorrow. If you’ve been reading TechCrunch over the past week, you’ve undoubtedly seen that just about every location-based service has an app they’re unveiling. And another service based around planning events, Plancast, just launched their app this evening. But Hot Potato offers the best of both worlds as it allows you to both plan future events, and interact with ones currently taking place. The new app makes it very easy to chat about the event, and upload photos and videos.

And they’ve cleaned up the stream of information around these events. There is now a filter to show everyone commenting, or just your friends. There are also now number indicators to show unread items. And the check-in process has been simplified thanks to big green buttons that make it obvious.

Also new for SXSW is Twitter integration. On a case-by-case basis, Hot Potato will be pulling in tweets about certain events at SXSW, using a filter to make sure only relevant ones show up. You’ll be able to do things such as filter those tweets to show only those by people you actually follow, which will make them potentially much more meaningful to you. You can also reply to tweets thanks to integration of Twitter’s API. And you can share tweets from within the app that will show up as retweets on Twitter.

Another new features is Calendars — something which each Hot Potato user now has. Obviously, you can add the events you wish to be a part of to your calendar, but people you are friends with on the service can also add you to other events as well. The app also now features Push Notifications now (on top of revamped email notifications).

On top of the new app, Hot Potato has rolled out a completely revamped website with just about all of the same functionality of the new app (as well as the new look and feel). And at the highest level, Hot Potato finally has its own social graph, which can pull in friends from the usual suspects: Facebook, Twitter, your address book, etc.

And here’s something that should really help Hot Potato this week: each time someone checks-in to a SXSW event with Foursquare, that service will recommend they also join the event on Hot Potato. Clicking on the accompanying link provided in the Foursquare app with open the Hot Potato app and let them join the event with a click (if they have an account). As you might expect, you can also check-in to a venue on Foursquare within Hot Potato. With Foursquare likely to be one of the key apps used by conference goers, this cross promotion is simply huge.

On top of all of this, the service now has its own full API, so others can use and interact with their data.

Simply put, all these updates are full of win, and make a good app even better. And remarkably, they’ve managed to cram in all these new features while at the same time simplifying the overall experience.

Fine the new iPhone app here in the App Store. It’s a free download.