Convergent Implementation #4: 2D Barcodes

By: Steve Gurley

In my previous writings, I identified seven embodiments of mobile and digital signage convergence. The fourth embodiment is called 2D barcodes. A 2D barcode is shown below:

2D barcode uses graphical patterns to convey information as opposed to 1D barcodes that use vertical bars to deliver information. The purpose of 2D barcodes is to deliver more information than can be conveyed in a 1D barcode. But just as a 1D barcode must be read by scanner technology, a 2D barcode must be read via pattern recognition technology. There are over 60 encoding schemes for 2D barcodes. For a 2D barcode reader to interpret a 2D pattern, it must support the encoding methodology of the barcode being displayed. A Japanese company created what is now one of the most commonly used encoding schemes called the QR (Quick Response) Code. The QR format is frequently used for delivering messages to camera-equipped cell phones. It should be noted however that the QR Code is just one of many encoding schemes that can be read by mobile devices. The process for reading a 2D barcode via a cell phone works as follows: A 2D barcode is affixed to an object or shown on a digital sign. The viewer launches a reader application on their cell phone. (Note: These applications can typically be downloaded for free.) The viewer uses the application to capture (flash) a picture of the barcode via their phones camera. The reader application then interprets the barcode. Depending on the sophistication of the reader application and the contents of the barcode, the application will perform a specific function: e.g. present the information, transfer the information into another application, download an application, access a web page, dial a number, show a map, etc. The Japanese have been using cell phones to read 2D barcodes since the late 90's, and European adoption has been increasing in recent years. In the U.S. however, neither companies nor consumers have readily embraced 2D Codes in any meaningful way, but many believe that the day is coming.

A recent discussion with several technology experts revealed a consensus that 2D barcodes will become ubiquitous in the U.S. A strategist for a major handset manufacturer, who by way of example had a QR Code on his business card, felt that the future was very bright for this type of technology. He said that he saw a day when every product and location would have a barcode attached. This sentiment was echoed by the CEO of a company that develops location-identification products for mobile phones. A technologist with a leading digital signage company suggested that 2D barcodes would become a common fixture in digital signage content. It was even suggested that 2Ds future was secure because of Googles interest in the technology. One person said: "You can't argue against something that Google gets behind." Although I personally like the concept of 2D barcodes -- especially when the reading process works smoothly, I do not share the same enthusiasm for the commercial prospects of 2D barcodes as my peers. My reasons are as follows: First, 2D barcodes will be supplanted by easier to use technology, e.g. Common Short Codes. Many find it vastly easier to text a keyword to a short code than flash a picture of a barcode. If you've ever tried photographing a barcode, you've likely found that it does not work well in low light conditions or in places where you are walking or moving. In addition, it is in many cases a relatively cumbersome process to execute. Second, there are no standards for 2D barcodes. Although the QR Code is the most common barcode for mobile applications, there are 12 other encoding schemes that are targeted at mobile devices. This lack of standards means that it is possible that consumers will likely encounter 2D barcodes that cannot be interpreted by their phone's reader software. There are however standards setting bodies working on this problem, but one has to wonder whether the standards will be set before other technologies make 2D barcodes irrelevant. Remember, it took almost 30 years following the invention of the 1D barcode for Uniform Product Codes (UPC) to be deployed on a mass scale. Third, 2D barcodes are generally static (see note herein). Once you print the information, it's there for the duration. Market trends have people moving away from static information. Market and technology trends are gravitating towards a model in which information is delivered wirelessly, based upon location, time of day and, ultimately, direction. NOTE: There are dynamic 2D barcodes on the market (e.g. Scanbuy's Scanlife via EZCodes and Microsofts Tag codes) where a flash of the barcode prompts the reader software to use an index stored in the barcode to access a remote server to retrieve information from a database. Server-based 2D solutions require that a third party registrar manage the assignment of the barcode/index and host the information. It remains to be seen if the market will unanimously endorse a registrybased solution as the most well known are proprietary. Fourth, there is no way to get critical mass in a timely manner. Although it is easy to run some 2D trials, it is another thing to begin deploying a specific coding scheme on a universal basis. Very few companies will be willing to invest in a technology that has no standards and can be

easily supplanted by new technologies that are on the horizon, e.g. RFID and other near field communications (NFC) technologies. Very few consumers will be interested in embracing a technology that they don't understand and requires a change in their existing habits. NOTE: At the writing of this article, there are quite a few 2D barcode trials in progress. It should be noted however that some of these trials are using QR Codes, some Scanbuy codes, some Microsoft's Tag codes and others are using a mix of various encoding schemes. It will be tough to build critical mass in this type of environment. Fifth, it is a difficult model to monetize. Although it took UPC barcodes many years to catch on, at least there was a very clear value proposition connected with them: A company could increase sales and reduce labor costs at the checkout line. UPC codes introduced tremendous efficiencies into the retail industry. Fewer checkout personnel could process more customers in less time. This provided clear financial benefit to those who adopted the technology. In terms of 2D, the application must be identified that will make the value proposition for 2D as clear and compelling as the UPC code otherwise it will be unlike companies will embrace the technology in mass.

In summary, some believe that 2D barcodes will be widely used in digital signage. It is true that it is a workable technology for delivering information to a mobile phone, but it has limitation -- primarily the lack of standards and the lack of measurable value. The question is therefore this: Will we see it used in digital signage? The answer is yes, but I predict on a limited basis. Most signage operators will find it onerous to manage the extension of content that comes via 2D barcodes and without a clear value proposition, few will want to expend the effort.