Late Friday night, SmugMug subscribers (including yours truly) got an email regarding a new pricing structure for Pro users. The former account options have been changed from Basic, Power and Pro to now Basic, Power, Portfolio and Business.
Essentially, the Pro account is split into Portfolio and Business. The key difference between the two new types of accounts is that the Business account allows you to set prices and make profits on prints purchased through your online account.
Previously, the Pro account, which allowed you to set prices and make profits on prints, was priced at $150 per year. Now, the Portfolio account is priced at $150 per year. The Business account is priced at $300 per year. Existing Pro users can renew for $250 for next year.
There has been somewhat of an uproar among SmugMug users regarding the timing (late Friday night on a holiday weekend), amount (100% increase) and manner of the price hike (all at once rather than tiered over months/years). Several SmugMug users on Twitter have sworn to leave SmugMug, accusing SmugMug of pulling a Netflix.
@smugmug bad idea to drop a massive price hike on a Friday of long weekend.#socialmedia#crisis team must be so happy.@baldy@donmacaskill— Koka Sexton (@kokasexton) September 1, 2012
SmugMug has ~7PB stored on Amazon S3 & about 400,000 users. That’s ~$18/yr in storage costs/user. Yet, increased price by $100.
#SmugMugged— David Wolf (@WolfSnap) September 1, 2012
Now that SmugMug is raising their prices, it’s further solidifying that I will be switching completely to
@passpremier from here on out.— Tori Watson (@marvelousphoto) September 3, 2012
RT
@johnmoldy:@smugmug price increase…sorta like discovering the one you love doesn’t love u.#smugmugged— Ronn Murray (@RMurrayPhoto) September 3, 2012
I’ve copied the email below for those who didn’t get one in their inbox.
[youtube http://www.youtube.com/watch?v=NZaRVzIg0wk&w=640h=360]Hi Eric Reagan,
For the first time in 7 years, we’re raising the price of SmugMug Pro subscriptions, something we tried hard not to do.
We know $100/year is a lot and personally, if I were asked to pay more for a service, I’d want to hear from the person responsible for the decision. That’s me, so I placed my dSLR on a tripod, and looked it right in the lens, imagining it was you. I tried to offer a peek inside SmugMug and our thinking:
Because storage, engineering and support costs are so much higher for pros who sell at a markup, we split pro accounts in two: Portfolio and Business.
1. Portfolio is still $150/year (or $20/month) and still provides access to our pro labs for both you and your visitors, plus pro features like watermarking.
2. Business lets you set prices and earn profit. It will be $300/year (or $35/month) for new customers, but existing subscribers who set prices will be asked to renew at $250/year (or $30/month) beginning October 15, 2012.
It looks like you’ve set prices so we’re guessing you’d choose to renew at theBusiness rate. If we guessed wrong, you can always downgrade in a few seconds by going to your Account Settings.
There are more details and a discussion on our blog, and our Heroes are standing by to answer questions. If you’d like to make sure I see your question or comments, just put “attn: Baldy” in the subject.
We love that many of you have been with us for nearly 10 years, and it’s stunning to see how far we’ve come together. The silver lining in this increase is it lets us invest more engineering into SmugMug, which is exactly what we’re doing so we can make better improvements, faster.
Thanks for being a part of the SmugMug family,
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I’ve been using SmugMug for 6 or 7 years now and have always thought the Pro account was a bargain at $150 per year. I have over 30,000 images on SmugMug for a total of more than 161GB. There is no limit to the number of files I can upload, the bandwidth I can use or the storage space that I take up. I still don’t see any reason to switch to another service. Even at $300 per year, I think what the SmugMug Business plan offers is still a bargain.
Are you a SmugMug user who received the late Friday night email? What do you think about the price increase? What alternative would you pick over SmugMug?
Bummer. Was literally ready to switch over to SmugMug primarily because of the great price. Now, not so sure. Definitely not switching when planned. May even wait till next year. Bad move SmugMug.
Smugmug brilliant name for a company Smug who thinks of their customers as mugs
At $29 / event for a Pass account, I can share many more small “events” on my SmugMug account for the $250 (my renewal price as an existing account holder) they will be charging me each year for unlimited storage and traffic.
Some of these small events I share, I never expect to make money on, yet I want to share them. I wouldn’t pay $29 to share photos from a 5K mud run I stumbled upon, but with SmugMug, I can share any event big or small without concern about cost.
I also really like the fact that SmugMug does not claim ownership in the photographs, videos or other media created or uploaded by Subscribers. Unlike other social media sites that *do* silently lay claim to your images once you upload or post.
There are many e-commerce features in SmugMug as well (that I admittedly haven’t taken advantage of), that should be considered – branding, price lists, coupons, sales tax, multiple labs, right-click protection, etc…
If you’re trying to make money off one or two “events” in a year, maybe SmugMug Business level isn’t the way to go. If you’re like me and you never know what lies around the corner and you want a fixed charge… go SmugMug.
I agree but the one time fee of $150 was so much more appealing than that of $300. In principle alone for such a drastic rate hike I am not moving to SmugMug yet.
SmugMug’s revenue stream mainly consists of account fees plus a percentage of sales from Pro Accounts. By raising fees by $100 to $150 over a year’s time they may/might lose ~25% of their Pro Accounts but their total revenue stream from fees will increase by at least 50%. The loss of sales revenue stream will be minimal because the accounts fleeing are mostly the ones with low to no sales. Some of that minimal lost revenue sales stream will be made up because overhead costs for storage and support will be lower.
Their only viable competitor of note is Zenfolio. SmugMug’s pricing is now comparable to this major competitor. After the furor dies down they will regain their new customer/account stream and if, as promised, new features are rolled out over the next year SmugMug will be a much better featured site than Zenfolio.
This is a brilliant business move by the MacAskill’s and they are to be congratulated.
They have discovered that market share does not necessarily mean profitability and have taken the proper corrective action.
How much were you paid for that service announcement? Nice try but doubling the fees overnight is unacceptable and that nonsense of only losing 25% revenue from those leaving and gaining 50% from those staying is pure speculation and probably inaccurate. Loyal customers don’t like to get screwed like this. A slower progressive price hike would have been a classier and more appropriate business approach.