This is hard post to write, because conventional wisdom is that you don’t announce price increases. But I feel like we are in partnership with our customers and I want to make you aware of what we are doing and why we are doing it.
Over the last few years, we have added high quality merchandise to Phanfare: first prints, then photo books and cards and data DVDs. Recently we experimented with super low prices, fairly close to our cost, to see how it affected subscriptions to Phanfare. Those experiments confirmed my intuition that being the bargain basement provider is not consistent with our premium positioning or cost structure.
One of my goals for this year in these recessionary times is to make sure that we make money at everything we do. As a result, you are going to see some fairly dramatic prices increases on some items. For example, 4×6 prints will be going from 8 cents to 16 cents. An 8×8 book is increasing from $19.59 to $34.99.
I realize that for some of you, these price increases will come as a shock, and it will certainly reduce the overall volume of merchandise we sell. But I don’t think you will be disappointed with the quality of our merchandise, the customer service behind it, or our guarantee of your complete satisfaction.
As close Phanfare watchers know, we just lowered the price of Premium subscription from $54.95/year to $49.99/year. We did this in anticipation of introducing storage limits for new customers after approximately August 1st (existing customers grandfathered). Once the new accounts have a storage limit, the pricing will be rational. Our new Pro accounts will come with more storage and the option to buy additional storage.
We also used to offer two sets of merchandise prices, one to premium subscribers and one to free users. We used the merchandise discount as an enticement to join our premium program. We are no longer doing that. There will be one set of prices. Many of the people who buy merchandise are the friends and loved ones of the account holder and we don’t want to discriminate against them.
Free accounts (freemium) are not a big part of our future. We are right now offering all free users the ability to buy their first year of Premium at half off if they buy before August 1. Freemium users who buy Premium before August 1st also get an unlimited storage account, also going the way of the dodo bird on August 1.
Note that if if you sign up on our home page today, the offer is a 14 day unrestricted trial account, not a freemium account.
I hope you will still buy and enjoy our merchandise. It is expensive to produce integrated merchandise. Aside from the engineering involved, there are configurators, customer support and the management attention to finding high quality vendors. By buying our merchandise, you are supporting Phanfare and we appreciate it.
As always, we don’t hold your images hostage at Phanfare. You can download full size originals, even zip files of entire albums, and print at home or print through a third party. We sell photo merchandise as a convenience to our customers and for some incremental revenue, but it is not our main purpose. The main business of Phanfare is providing a subscription-based, archival, photo and video sharing service.