We raised our subscription prices today for new customers and renewals. The new prices reflect the value we deliver to customers and will increase our margins to the point where we can continue to invest in the business.
Phanfare stores all customer photos and videos at Amazon S3 and we encourage customers to store all their media with us. We store the photos in their original quality and the video in HD quality. The average customer has 10GB of data. Amazon’s S3 pricing is well advertised.
Amazon provides the quality of storage that our customers expect. Data is kept in multiple data centers and the likelihood of their losing a single piece of data is so negligible as to not be worth discussing. The data will be there. And it’s all near-storage, not tape backup.
What does storing your photos in “original quality” mean? Well, if we got rid of photo renditions larger than what we use in our slideshow, we could remove 90% of our data costs. But if you are a customer of Phanfare, you don’t take photos to have us lose 90% of the data. Phanfare is the service that won’t have to upscale your image to show it on screens that are 600 DPI in ten years.
Unlike many services, Phanfare treats the data as if we have the only copy. We are not secondary; we are primary. Even backup services, that sell based on the fear of losing all your data, typically don’t keep the data in storage built to endure data center fires. Backup services expect you to keep a copy as well. Not true for us. Our vision is to be your cloud-based photo and video asset management system. Computers, mobile phones and tablets become cache-coherent terminals. Cameras become connected acquisition devices.
The decision to keep archival originals, which is one of our primary differentiating characteristics, drives our cost position. But Phanfare, as I blogged in 2006, was never designed to be the low cost leader. In a world of free, low-fidelity photo services with no customer support and me-too features, we try to produce a service that is better, not cheaper.
Phanfare enjoyed some margin at our old prices, but it was very thin. At enormous scale, the model was fine, but at the size we are today, and the size we will likely be in the near future, we require much healthier margins to invest in the business. If you are our customer, you want us to have that margin. Really, you do. Because the alternative is not pretty.
Today’s price increases merely represents our acceptance of the reality that we are willing to trade growth for the profitability and sustainability of the business. Our first obligation is to run Phanfare in a way that is responsible and enables our long term success. We are the steward of our customers’ memories.
I truly believe that there is a huge opportunity to build a trusted brand in photo and video management to last the next fifty years. Kodak had a strong enough brand to do it, but they squandered the opportunity. I am talking about a brand strong enough that you know that if you pay the company, your photos and videos will outlive you. We are not there today, but I want to try to get there. And the way to do it is to charge prices that give the company a healthy margin so it can control its own destiny.