The Smugmug Price Increase

Photography site Smugmug.com announced this weekend that it is raising its annual fee for pro accounts to $300/year. This has provoked strong reactions from its customers. It is not a question of only whether the $150 extra is worth it, but whether the whole $300 along with the profit fees, shipping, base prices, and download fees are worth it.

Some bottom lines:

  • Smugmug thought Moore’s law was their friend, but now realizes it is also its enemy.
  • Smugmug has reassessed its business model and leading its marginal semi-pro customers to do the same.

I found this triggered many reactions on my part — more than I could organize into a short forum response on their news article or in the many forums (dgrin, fredmiranda, google plus, etc) so I’m posting them here on this blog. I’m still struggling to organize my thoughts coherently, but here’s the brain dump. Excuse the typos.

Side note: I set up this photographynovice.com blog up in the early days of my venture into digital photography for informal use before moving to a more professional domain name when I started getting serious. For some reason, photographynovice.com didn’t seem like it would work well from a marketing point of view :-). It seemed like the place to post this. I’ll edited in thoughts/improvements as I can.

Background
Smugmug is raising its annual fee for pro subscriptions to $300/year for customers that sell photos through their site. Existing customers get grandfathered in at $50 less year. Their founder explains the rationale clearly in a youtube video.

Moore’s law and its variants
Smugmug’s cloud storage has increased exponentially since 2005, roughly doubling yearly to its 2012 level of 7 million gigabytes. This is partially due to an increased customer base, but is largely due to 4 factors:

  • customer upload bandwidth,
  • camera megapixel increases,
  • increased lightroom integration convenience
  • camera frame rates (unmentioned)

The unlimited upload growth rate is exceeding the rate that storage costs are dropping. They assumed the hard-drive variant of Moore’s law would work for them, but forgot it would work against them as well.

Growth in smugmug total storage over time

Engineering and Support Costs
Smugmug seems to maintain a largely non-off-shored development and customer support staff. They need more of them, and these folks like to get raises, benefits, and promotions. They have deferred prices increases for 7 years so this is essentially a deferred 7%/annual increase. There are economies of scale with customer base growth, but phone conversations and email exchanges are still 1:1. It doesn’t take much interaction to cancel out a customer’s annual fee.

Is $300 worth it – I waste a lot more than on things I use a lot less
I immerse a lot of my free time into photography — and most of that time gets spent in front of lightroom, with smugmug capturing the output of that work. The per hour or per photo cost of $300/year is pretty small. I have expensive lenses that sit in a draw or get sold at loss for more. Nothing on my computer is as well backed up and safe as my photos with smugmug. In a fire, people grab their photo albums, I’m all set.

Is Smugmug my partner or my landlord?
As a Smugmug Pro user, I may now end up paying an annual fee of $300 to enable customers to buy photos from my site. I shoot high school and local sporting events. I would need to do a statistical analysis, but it feels like the most typical order I get is for either 1-2 digital downloads or 1-2 4×6 prints. After paying the nominal 15% of profit fee, the digital download fees, the base print prices, the shipping and handling, Smugmug and its print partners take 30-40% of the total revenue. I had to listen to the video a few times to confirm that the price increase was targeting folks who give them 30-40% of their revenues instead of those that give none? Add in the fixed cost of the service and its over 50% until you get your volume up.

Is it all my fault?
I can understand the issue. I am not a profitable customer for them and might actually be a loss-leader. If I shoot a sporting event with lots of kids in it, I’m uploading thousands of photos on the off chance they will stumble upon them and buy one. If it were just for my family/small team/friends, the stagnant file volume would be a lot less. If I were shooting weddings, my focus would be on the event fee/bride and maximum print quality and be bypassing smugmug for most of my prints/deliver. I probably also wouldn’t blink at the annual fee.

I checked my account. I have about 160gb of uploaded photos over the past year. Storing that much data in Cloud on Amazon S3 looks like it would cost about $20/month without the added accessibility and features they provide. They may be getting storage at a lower rate, but my account is on its way to being a money loser if I keep uploading in same manner over time. I’ve been wondering recently why Smugmug doesn’t provide me with any incentive to reduce this (e.g. delete old events).

The digital download fee
I know photographers who used to provide facebook-resolution downloads for $0.01. That protected their photos and probably got the customer to pull their credit card out and think about bigger purchases, but it must have been killing Smugmug with $0.30 minimum credit card fees. Smugmug solved that by adding a $0.50 minimum fee to each download image, but for those of us selling moderately priced digital downloads (say $4.99), that felt like double dipping between the download fee and the 15% profit charge, particularly for large digital orders. They changed this policy earlier in the week to a nice compromise. They get their credit card transaction covered but don’t pile it on.

Am I a problem or an opportunity? – My journey into semi-pro photography
I initially joined Smugmug in 2010 on recommendation of a friend who liked the features and appearance of photos relative to something like Picasa. As I began to get better equipment and shoot better and have these shots flow to larger circles of subjects outside my kids, I became aware of how scorned GWKs giving away their work were by professional photographers. Out of respect for them, I want to avoid totally undercutting them with free photos of events they are at.

I also saw the costs of getting good photos and wanted to see if I could channel that investment into a return that could be directed into charity efforts. So I decided to switch to a pro account and start charging nominal amounts for my work. This is a very difficult decision as its unclear where to draw the friend/teammate line. After seeing almost no sales in initial foray, I back down to a power account. A year ago I went “pro” again and netted enough to be slightly profitable after equipment depreciation and rental costs.

One thing I really like about charging is that it forces me to look at each and every photograph and think — would I buy this? The biggest challenge today in photography to aggressively delete! The other great thing about charging is that it allows me to know what people like and selectively process and improve the shots folks actually want rather than bring each and every shot to perfection. The sales process also can forge connections.

My 2010 feedback to Smugmug
When you complete a trial with Smugmug, the founders Chris & Don MacAskill ask you “If SmugMug didn’t grab you, we’d love to know why so we can get it right.” I was on fence so sent them this feedback:

  • I would like to have the ability to direct people to an unlisted category (or sub-category) of unlisted galleries (e.g. how to tie together several
    unlisted galleries from a private family vacation?)

  • Performance sometimes seems a bit slow. Perhaps this is due to large file sizes, but you probably need to stay on top of your hardware investment as you grow to compete with Google infrastructure.
  • People I show pictures to sometimes click on “next page” instead of “next photo” buttons. You might want to make these more clearly differentiated
    * The cost is very reasonable annually, but I worry a little about the long term commitment as a repository for family memories. What happens when you fall behind in payments or move on to something else?

This is interesting in retrospect with regard to the issues driving the price increase. Their engineering has addressed my first concern with sharegroups and events. Their performance has held steady or improved with the increased load on their systems with their investments. They have worked on the gallery interface. They have provided zip downloads.

Still, the cost increase is triggering fear in folks. I have used smugmug permalinks as images in our family scrapbook. Years from now when I’m gone, how can I avoid these becoming broken links? I’m somewhat of a hostage.

How will this affect SmugMug customer growth?
In the end, I understand Smugmug’s rationale for a change. What is fascinating is thinking about how they could have best done it. It will be a Harvard business school case study someday. The $90 jump from power user to pro was pretty managable as an experiment. Now its $240. Less people will make a go of it. How do they expect to get their growth in next few years and what customers do they want? Internally they clearly have some ideas. I would guess that serious pros in many lines of work seek to avoid their 15% profit cut route their work by other means.

Storage Reduction
To me, some of the hardest work in my photography today is deleting photos. My Canon 1D Mark IV can capture 10fps, and it is far too easy to accumulated 1000’s of photos. It would be interesting if smugmug promoted a little housecleaning. Perhaps offered to donate to charity something proportional to the amount of storage reduction by longtime customers. Perhaps offer marginal storage under their costs, but at least something tangible (kind of like a medical co-pay) to encourage some moderation/housekeeping.

Sales Strategy
Print sales have to be on the decline. People want images, and not necessarily of the best quality and resolution.

I’m wondering if a better strategy would be to pull out smugmug and go with digital delivery and paypal payments ($0.30 + 2.9% fee). Tell people to take their files to cvs or walmart for prints.

Relationship
Perhaps smugmug could offer a lower profit cut at this higher base rate. Do they really need 15% of your sales on top of the $300 fee? Cover transaction costs for sure but why take 15% instead of the visa 3% charge?

What’s next
My account renews at the current rate next week so I’m locked in at the current rate for another year so there is nothing to decide immediately short of bailing down to a power user account.

  • I will think more about long term/end game. Should I be handling my scrap-book permalinks from a solid long term service like google that hopefully will outlive me. I took the early step right away to decouple my domain name from photo storage, using photos.domainname.com rather than just domainname.com). That will hopefully make a future migration more feasible.
  • I’ll rethink my semi-pro business model. How much work is it worth to sell photos I could just give away in order to send smugmug $300 plus 25+% of revenue? Is the convenience of smugmug fullfillment worth $300 + 25% of revenue? Can paypal be pulled into the mix in a hybrid solution?
  • Drop down to power user? I’ve got 1 day to decide if I should just bite the bullet and drop down to power user for the next year and save $90 or stick with the $150 business account for next year.

by w4l3XzY3

by w4l3XzY3

Customizing WordPress Twenty Eleven Theme

Some useful websites for customizing the wordpress twenty eleven theme.

http://allaboutbasic.com/2011/06/15/wordpress-com-theme-twenty-eleven-css-style-sheet-modification-change-site-titledescriptionpost-titlecommentsmenussidebar-and-more/

http://codex.wordpress.org/Creating_a_Static_Front_Page

http://codex.wordpress.org/Child_Themes

http://wpti.ps/functions/replace-remove-header-image-twenty-eleven-theme/

http://wordpress.org/support/topic/how-to-change-width-of-twentyeleven-theme

http://codex.wordpress.org/Creating_a_Static_Front_Page

Prom photo tips

from boston globe:
http://www.boston.com/community/photos/raw/2010/05/prom_photos_aka_mom_hurry_up.html

others:

http://www.smilebooks.com/blog/tips-on-taking-prom-photos/

http://photography.about.com/od/photographybyoccasion/tp/promtips.htm

Dog in Snow

After the Blizzard last week, I went out to test my new Canon 70-200mm L IS USM lens and took some shots of the dog staying with us. One shot caught some flying snow which I thought looked good so sent into the Boston Globe as part of their blizzard gallery (which they later split into a “dogs in blizzard” gallery):


This was shot at ISO 100, 160mm, F/2.8 1/640sec.

There were a few other nice dog shots that day. All these were take with the 70-200 f/2.8 lens and Canon 7D:


iso 200, 73mm F/4.5 1/250sec


iso 200, 200mm, f/3.2 1/320sec


iso 200 105mm f/3.5 1/400sec

Background information on Canon T1i

My dad got a Canon T1i for Christmas so I thought it would be useful to organize links on it here. This camera is also known as Canon 500D in Europe.

* Canon website page on T1i
* Instruction Manual (pdf)

Camera Review Videos (good way to learn about features)
* Camera Labs
* Features and Controls
* First impressions video
* Hands on review

Tips:
* 14 tips for better photography with T1i Part 1
* 14 tips for better photography with T1i Part 2

Tutorial Videos:
*1: Camera body and controls
*2: Camera setup and tips
*3: Basic menus in Auto
*4: Mode Dial
*5: Creative Auto mode
*6: Portrait Mode
*7: Landscape mode

* Another mode dial tutorial
* Video on DPP photo organizing/editing software that comes with camera

Misc.
* Amazon.com Reviews
* B & H Photo info/reviews
* Blog on Canon Ti1

Welcome to PhotographyNovice.Com

Until this year I’ve always enjoyed taking photos, particularly with the advent of digital cameras, but had never done more than point and shoot.     My main focus has been on video and video editing.   After accumulating a draw full of digital video tapes (and a box or two of older analog), I decided it was time to try to go for a tapeless video camera.   While shopping at the local camera store,  the owner put a Canon 7D in my hand at one point.   The previous week I had taken a photo for someone with a Canon Rebel, and I enjoyed the feel of taking a photo with a dedicated camera rather than a feature of a video camera.   The 7D has HD movie capability (although not continuous focusing).   I spent a few evenings debating the merits of going for a nice HD camera or my first DSLR.  In the end I couldn’t decide and put both on my Father’s day wish list and hoped my family would figure it out.

The Canon 7D showed up on father’s Day Saturday (1 day early) so I could use it in a out of state soccer game that day.  After quickly charging the battery with some juice and a dash to the store for an omitted memory card and a monopod, we headed off to the game.   After firing it up at the field and taking a few shots, I switched the focus to manual and took  shot  #6 of a soccer ball through the fence:

This seemed like far too nice of a picture to take 10 minutes after putting the battery in the camera! While manual focus was probably an option on several camera’s I’d used, the SLR body made it much more accessible. What else lie in store if I read the manual and figured out what all these other dials did? Six months and 11,000 shots later, I’m still reading the manual and trying to learn more about how to take better photographs and trying to figure out the best sequence of lenses to put on my wish list for next year.

The web seems somewhat saturated in terms of photography information in various forms. I thought it might be handy to start a blog for my own use to capture links and save notes as I go.