Where has Zenfolio's Business Growth come from??

Kevin KrowsKevin Krows United StatesMember Posts: 1,457
The thought occurred to me the other day that the "Business Growth" in subscribers that has been referred to by support and in the Town Hall meeting may be coming from one subscription level. I obviously have no way of verifying this, but consider the following:

Let's assume that you are simply looking for a Low Cost solution for storing your photos and videos and simply want to share them with you family and friends. You want large file uploading as well as unlimited storage and bandwidth.

If you look across the universe of options, two solutions stick out like a sore thumb. Smug Mug and Zenfolio. Both have low cost plans priced at $60.00 per year including:

Unlimited Storage
Unlimited Bandwidth
Large File Image Uploads (36MB Zen / 150MB SMP)
Video Upload (2GB Zen / 3GB SMP)


Now, Compare this cost with other hosting sites that offer these same four requirements:

Photoshelter $540 per year
Shotproof $720 per year
Exposure Manager $180 year (future is uncertain)

Compare this to other highly rated hosting services without unlimited storage and bandwidth:

PhotoBucket Pro - Storage capped at 500GB for $480.00 year
SlickPic - Storage capped at 500GB for $300.00 per year


And finally, how about Cloud Storage:

Itunes Cloud Storage - 1TB $120.00 year
Drop Box - 1TB $120.00 year


Anyone looking for price and value to store their large file images and videos with unlimited storage and bandwidth needs to look no further than SmugMug Pro or Zenfolio. $60.00 per year is a great deal for people that don't need e-commerce.


I have spent the past couple of months talking to photographers that use SmugMug Pro and Zenfolio Pro/Advanced to run their businesses. The overall consensus and feeling is:

1. The increased cost of doing business isn't coming from the ecommerce accounts...it's coming from non-ecommerce accounts and the amateur photographer community that sells their prints at cost.

2. Professionals have experienced large increases in subscription costs, commission costs, and print costs to subsidize this high cost of doing business.

3. Professionals suffer with slower performance due to the stress on infrastructure that they are not responsible for. They feel that a $60 dollar a year account is more important to SM/Zen than premium accounts that also drive thousands of dollars in commission and print revenue.

If there is any truth to all this then I guess it all boils down to how Zenfolio and Smug Mug want to grow their business and who they want their future competitors to be. They may very well be on the track to becoming a cloud storage solution if all of the professional photographers with ecommerce accounts find a better place to run their businesses more profitably. We simply don't want to subsidize subscription growth for those that are only looking for a low cost storage solution. We obviously don't want to suffer performance issues related to this growth either.

Comments

  • JimedJimed Alvord, TexasMember Posts: 65
    The $5 per month plan makes a very nice off-site storage solution for JPGs and a dandy front-end to order from MPix. From Zens perspective it may very well be easier to support 5 entry level people with low expectations than one pro with high expectations. The new user interface impress me as a "dumed down" version of the old one so you have an interesting point.
    Jim Edmondson
    Optical Harmonics
  • Kevin KrowsKevin Krows United StatesMember Posts: 1,457
    "From Zen's perspective, it may well be easier to support $5 entry level people with low expectations"

    I'm not sure that these entry level accounts are actually easier to support. When I look at the subscription fee + commissions paid to Zenfolio, it would easily take 30-40 entry level accounts to equal the revenue I generate for Zenfolio. Which is easier, 1 account that is demanding (but knows what the heck they are doing) or 30-40 that are not demanding (that don't know what they are doing).

    But support isn't the real issue here. It's system resources. Professionals with E-commerce needs pay the higher cost caused by the large influx of $5 month accounts with unlimited storage. Again, I have no way of verifying if what I am saying is true but the facts I presented would suggest a strong likelihood of truth.
  • Wilson SWilson S Member Posts: 21
    If you look at the Pricing page, Zenfolio admits that the most popular package is the pro package and not the starter package:

    https://secure.zenfolio.com/us/z/signup

    Then you think about what happened in the past. SmugMug raised prices (doubled it or so). Then Zenfolio became the low cost provider. People left SmugMug and then moved to Zenfolio.

    Zenfolio then had too many people at the $100 price point. I am sure they hesitated raising rates, but had no choice to raise prices first to $140 and then to $240 (new accounts).

    Then you add unlimited video which is expensive. Look at Vimeo as example for video hosting prices to get an idea. Then cameras started having more and more megapixels and people saved so many pictures on their unlimited accounts. Of course all these things add up and then you have an unsustainable business model.

    I believe that the introductory price point never went up so it is unlikely that they were the problem.

    I guess this is why people always say get a bunch of estimates. Never pick the lowest price and never pick the most expensive price. Pick something in the middle.

    Of course this is all my speculation.
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