A Business-Related Suggestion for LiveJournal

[raventhon]

LiveJournal is currently letting a massive source of revenue go untapped -- the sale of permanent accounts. I've heard that bradfitz doesn't like selling permanent accounts, for some reason, and while it may seem to (eventually) start sapping money from the paid userbase, it seems that not exploiting this resource isn't the wisest of ideas

Comments

[1justin]

My understanding is that they only sell Permanent Accounts when they need a big pile of cash right away.

[unfurled]

I think it'd be awesome to have a permenant account - although I'm fairly certain I won't win an auction.

[vanbeast]

At $300, that's 12 years of service. I can't think of anything that let's you pay 12 years ahead of time as a standard practice.

Tivo's lifetime service is somewhere around ther.e.. $250 or $300. For them, it's about 2 years of service, which I've got to assume is what they expect for the lifetime of their units.

For LiveJournal, it's different. They don't sell a product that goes in your home and has an expected lifetime. Which was pretty much your point, I think :)

[spug]

50 user pics, that costs another $120 for twelve years ;)

[vanbeast]

In the past, they've been sold for $100. That's 20 months at worst, and 4 years at best before LiveJournal starts losing money. Sure, you can crank up the price, but there is still a point at which LiveJournal will be losing income. Permanent accounts also get 50 userpics by default, which is an additional feature that won't be paid for anymore.

To be clear: I'm not saying that selling permanent accounts is a horrible idea that should never be considered, I'm only trying to point out the downsides.

$50k to $100k isn't that much money (based on the old prices). Sure, it'd buy a few servers, and that'd be good, but that's all. Just a few. Is the long-term loss of revenue worth getting some new servers? I don't really know, but I doubt it.

Providing your users a way to make it so they never have to pay for your service again is always a losing proposition from the financial side. Is the customer satisfaction and appreciation gained worth the loss of revenue down the road? Again, I don't really know.

[raventhon]

The thing is, there's a certain point at which you can invest that money and make $shitloads.

Providing your users a way to make it so they never have to pay for your service again is always a losing proposition from the financial side.

It's not, really it's not. Would you rather have $25 / yr for 10 years or $250 now? Even if you have 5 years in the future, you can invest that $250 in such a way as to make it much more in 15 years.

[1justin]

I doubt LJ is about to get into investing their assets in the stock market or whatever it is you're implying.

[vanbeast]

For LiveJournal's model? I'd rather have $25 a year for 10 years. There aren't any startup costs for a new account... it's not like LiveJournal sells a piece of harware to users that costs money to build. All of the costs are continuous and recurring. If everyone bought a permanent account right now, there'd be a lot of cash-on-hand, and when it ran out, LJ'd be screwed.

[erebrandir]

What about the people who worked hard and gave countless hours of their time to LiveJournal, and were rewarded with the distinction of having a Permanent Account? Will they be satisfied to have that distinction go away?

[skittl1321]

How will the distinction go away.

Right now there are already a lot of people who bought their permanent accounts, rather than worked for them. Why would this be different.

-My opinion though is from a business standpoint, unless the price is extremely high, permanent accounts don't make sense.-

[vanbeast]

What about all the people who have worked hard and given countless hours of their time to LiveJournal since and still pay for their accounts?

There are plenty of people with permanent accounts who bought them... in fact, I'd be willing to bet that more people purchased permanent accounts than were given them.

There's nothing special about a permanent account except that you don't have to pay for it anymore.

[erebrandir]

If there wasn't something special about them, then why is everybody so interested in having one? Why are people willing to fork over $300 or more for one, when they no doubt would be throwing money away, over the cost of continuing to pay for a Paid Account? Obviously, there is some value to them beyond the monetary.