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March 13th, 2008

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02:40 pm - grrr re: basic account decision

While offline this week, I learned that LJ has changed its account levels. Needless to say, Brad's pissed. I'm pissed. Not only because we both vehemently disagree with this change, but because they made such a change without consulting us. Or rather, we were both at a lunch a while back where they asked us what we thought and we both told them that this was the worst idea ever, although for different reasons. I had thought it had been tabled until I learned of this. After it had been posted.

Basically, LJ isn't killing Basic Accounts for past members, but they're not making that account level available to new users. From what I gather, this is a money-driven decision. Without ads or payments, there is no way to pay for these accounts let alone for them to generate revenue so the company can grow.

Brad's argument is that these accounts produce the majority of content on LJ that others pay to look at. I think that there's another angle to it as well because these accounts are also needed for viewers who aren't emotionally invested. For example, I pay for my account (and have for years), but most of my friends who read what I write have Basic Accounts. They produce very little but I would produce absolutely nothing if they weren't reading what I wrote. And then I wouldn't pay. And that's how it gets all entangled.

Systems like LJ are an ecology and individual-driven monetization approaches fail miserably. People have different levels of participation, engagement, and tolerance. What they want from the system differs as does the way that they relate to others. It's a networked system and pissing off users affects more than just the user-company relationship - it affects the whole network. I totally understand that it's not possible to provide a service (and engineers and support and ...) for free, as much as we would all like that to be the case. But... I'm not convinced this is the right move to balance the financial scales.

When I get my feet back on the ground, I intend to talk with the folks at LJ, but I can already predict the first question: what can we monetize? how can we grow? This is a totally fair question. I have my own ideas, but I'd like to hear others' thoughts. Given that the current monetization structure is not working, what would you say should be done?

Like Brad, I'm upset that we weren't consulted but optimistic. They're reading/listening to the feedback about the policies and involving us in the decisions of how to improve that end of things. That's great news. My hope is that they'll hear us out re: the basic accounts. Either way, I'll get back to you shortly.

(180 comments | Leave a comment)


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[User Picture]
Date:March 13th, 2008 10:00 pm (UTC)
Glad to hear that you share my position (not that I expected you to like the decision or anything). It really is the free users, in their bulk, that add a lot of value to the network, both perceived and real.

Does LJ offer a referrals program? (Googling around I can't tell, and frankly I am loathe to actually browse LJ's policy and rules pages for UI reasons.) For example, a program where every person who signs up for a paid account and lists you as their reference gets you a *permanent* 2% discount? Or maybe even permanent flat discounts, so if I am a customer who refers 30 paid members, I now have a free account for life kind of thing.
[User Picture]
Date:March 14th, 2008 03:51 am (UTC)
I'm not sure if LJ has a referal program, but when I pay for my account I pay for it through a link via mypoints.com and get points towards gift certificates.
(Deleted comment)
[User Picture]
Date:March 13th, 2008 10:57 pm (UTC)
Thank you. At least you have the decency to say it is about the money and not try to pass it off as streamlining a "confusing" process. It's not so much that the thing was done, but how it was done that annoys me. There was no announcement before, and there there was the rather silly claim of streamlining afterward. "Sneak & lie" is what it looks like. That the advisory board, even if in a preliminary form, wasn't truly consulted does not make me feel like it will be anything more than an attempted publicity stunt even when fully formed.

I'd like to be wrong about that last part. Good luck.

I suspect they are learning, perhaps too late, that this move is costing or will cost far more than having a week or two with a mad burst of basic account creation. Ad-impressions cannot buy reputation.
[User Picture]
Date:July 16th, 2010 11:23 am (UTC)
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[User Picture]
Date:March 13th, 2008 11:35 pm (UTC)
I am unsurprised this was implemented without consultation with the advisory board; as one of those who lost all faith in LJ during Strikethrough, my first thought about the advisory board is "we'll throw them a few things to talk about; anything they like, we'll claim had great user support; anything they don't like, we'll say had to be done that way for financial/legal reasons."

That said...Given that the current monetization structure is not working, what would you say should be done?

1) Bring back invite codes; stop new accounts that aren't invited or paid. This means new users are automatically invested in the site--they either gave money or have an acquaintance who said "hey, come try this out." This means slowing the growth of LJ & new accounts--but was a sustainable method (LJ was making a profit when the invite codes were abolished).

2) Offer customizable account types, rather than the basic two (plus three kinds you can't get at the moment). Offer userpics separate from the search engine; offer layout customization separately; offer storage space separately; offer edit comments separately. Doing this allows small bits of income from users who aren't willing to pay for the whole package (why pay $20/year for the ability to edit comments, which at this point is all I'd want?, although I expect that userpics & image storage are most people's feature-of-choice), and it lets LJ know which features are considered most desirable, and which paid features nobody's willing to pay for but will use if they're part of a package.

3) Be generous with freebies--while this doesn't directly bring in money, being generous with "three free days for those affected by the slowdowns in the server" or "free v-gift for everyone with a birthday this month" (spaced out over a year)--would help rebuild LJ's reputation, which it desparately needs.

4) Stop trying to compete with MySpace... stop bringing in new graphics-heavy, ad-driven features. Almost nobody *likes* them, and they convince people to not spend time on LJ. Casual browsers who look over a site full of Snap.com previews often decide not to revisit, no matter how interesting the text was.

5) Find out what users want... don't waste paid programming time designing features that drive people away! (The Explore feature? Um, I'm sure someone likes it. I don't hate it; I find it hilarious. But it doesn't convince me to spend more time on LJ, and it's too random to draw new people in.
[User Picture]
Date:March 13th, 2008 11:45 pm (UTC)
I was just talking today with a friend about Explore and how it strikes me as counterproductive to at least the corner of LJ I inhabit and those I see around me. LJ strikes me in large parts as very much focused in on itself, one's flist, fflist, and people one meets. One of the unusual and appealing early features noone else shared was the intricate flock and filtering system, and it easily provides the ability *not* to have one's content googleable. Now, I'm not saying that everyone who's on LJ wants to hide, but compared to the blogs I tend to read and engage in, the desire to limit one's audience--either directly via flock or indirectly via robot/spider block--is much more pronounced on LJ. So why in the world would users who *enjoy* the fact that they may be hiding in plain sight yet enjoy a less pronounced visibility welcome the Explore feature which basically randomly puts them in the limelight (unless they opt out yet again)?
(Deleted comment)
[User Picture]
Date:March 13th, 2008 11:36 pm (UTC)

I really hope they'll listen to you both on the complexity that is LJ generated content. I'm more on Brad's side--without content noone will want to be here. But I also agree with you insofar as pretty much all of the people I know *started* free and after they tested things out they became enthralled enough to go paid. Moreover (and this is something you, of course, have argued before) LJ isn't MySpace or Blogger--it's a collection of overlapping, often self-defined subcultural communities. And it is that sense of identity and wanting to support (because many of us bought accounts not just for the icons but also specifically to support LJ) that gets rejected by this one-fits-all business model that runs after potentially fickle new users as it's ignoring the established practices and desires of the old.

Good luck, though my slim sense of returning trust in LJ with seeing the advisory board just got gutpunched!
Date:March 14th, 2008 03:31 pm (UTC)

Here from no_lj-ads

LJ isn't MySpace or Blogger--it's a collection of overlapping, often self-defined subcultural communities

The importance of this can't be stressed enough and it worries me that it almost always gets forgotten or overlooked whenever these big, what-do-we-want-from-LJ discussions starts.
[User Picture]
Date:March 14th, 2008 12:31 am (UTC)
I'd like to second elfwreck's comment and add a few thoughts.

1. Pare down some of the inactive accounts. I get the sense that 6A encouraged a lot of new account creation but failed to turn those account holders into active users. There's some interesting info on that here that you'll probably be able to interpret better than I.

2. Not alienate the heck out of the most loyal users. OK, it's too late for this. But I really think it's an important point; I've watched many previously fiercely loyal users either leave LJ entirely or refuse to continue paying because of 6A's grievous violations of their trust. That's a problem, and SUP could at least begin to mend it, but, well, they haven't exactly succeeded considering they just screwed up massively again.

3. Invite codes. I wouldn't mind either all free accounts or Basic accounts only returning to invite-only status.

4. Allow only Paid and Permanent users to create Basic accounts. I'm a Permanent user, and if I decide I want a separate account for my photography, for example, I don't expect it to have paid features or anything, but I do expect not to be forced to display ads on it. I consider that an insult to the amount of time, energy, and money I've invested in LiveJournal over the last six years: I've spent almost $400 on LiveJournal in total, all of that out of my own pocket while I was still in high school, and I resent the implication that I'm some sort of freeloader if I want an ad-free secondary journal. (Sorry to get a bit indignant and ranty; I'm quite frustrated, as I'm sure you understand.)

5. More incentives to pay. Which is to say, more of a difference between Plus features and Paid features.

Wow, and no more news posts like the one that was posted as I was writing this. You've gotta teach them how to talk to us, and fast.
[User Picture]
Date:March 14th, 2008 12:47 am (UTC)
Basic accounts returning to invite-only status - I have to say I really like that idea. :)
[User Picture]
Date:March 14th, 2008 12:43 am (UTC)
I have my own ideas, but I'd like to hear others' thoughts. Given that the current monetization structure is not working, what would you say should be done?

You don't know me, but I hope you don't mind if I wander in here with my 2 cents.

If the current owners took some time to get to know their users, they would realize that there are vastly different levels of commitment among LJ users. Like you said, some people are deeply invested in LJ and are therefore willing to pay. I think it would benefit LJ to have a wide array of options for paying.

Allow people to purchase more icons in 50-icon increments up to 500 or so. (Icons are the #1 thing people ask for more of). Give people more paid account themes that are truly original, not just a new header slapped onto Expressive. Give people more tools for archiving. Make the Scrapbook more user-friendly. Give people more phone posts.

All these things can be monetized. Instead of one lump some for everything, people can pick and choose what they want. I think people would be more willing to spend money that way. I know I would.

Granted these are just ideas, but I think that trying to make money out of customers who are willing to pay, rather than forcing people who are not willing to pay into only one option, is a much better strategy.
Date:March 14th, 2008 03:21 pm (UTC)

Here from no_lj_ads

[User Picture]
Date:March 14th, 2008 01:15 am (UTC)
I really wouldn't mind the ads if they didn't screw with my layout. InsaneJournal has ads, but they don't show up on people's journal or friends page where they have spent time and effort making their pages represent their personalities. Instead, they show up on profile pages, comment pages, any page where the free user's layout doesn't display and you get the site default.

By getting rid of the ad-free basic account LJ has dropped the only advantage (other than inertia) that it had over free accounts at IJ. Now you have the choice of putting up with ads mucking up your layout and getting 15 icons at LJ or going to IJ where your layout is left unmolested and you get 100 icons while dealing with ads only on pages you didn't invest time in making pretty.

Yes, LJ still has the bulk of communities that people might join a journaling service for. Personally, some of the ones I maintain are already mirrored and growing on IJ. Others are supplied to IJ from LJ via RSS feeds. And with people figuring out how to use OpenID to read their LJ friends over on IJ....
[User Picture]
Date:March 14th, 2008 07:04 am (UTC)
I'm going to jump in here and second this. I actually do mind the ads. It's one of the things that made me continually recommend LJ over other clone services to friends for probably four or five years. Ironically, for someone who used to really complain that I didn't like GreatestJournal because of the ads, I now that not only does LJ have ads, but it has a more hideous implementation of ads than GJ ever had!

I'm one of those users that I would consider to be a very loyal LJ user. I've recommended the site to friends and probably brought close to two dozen people most of whom have semi-active accounts to the site. At one time I maintained up to three paid accounts two of them with extra user pics.

At this point I don't think the ads are going to go away, although I'm afraid some loyal users, may. But one thing that would help tremendously is placement of those ads. I never ever want to see ads on my journal or friends pages. I don't really want to see them other pages, which is one reason why I'm glad I bought a perm account four years ago or so, and don't have to put up with them, but if it comes to new accounts, I have no motivation to make them here. I'm growing an active flist at insaneJournal and the features for the basic level are more of what I want, more icons, and no ads on my journal pages, and that means I'll go there. I'm not going to settle for a measly fifteen icons, really obnoxious ads that I then have to stare at while I'm trying to read my flist, if I can have one hundred icons, generally less obnoxious ads, and not see them on my flist! It's no contest.

So ad placement would be one of the first things I'd have them look at. The ability to buy extra features that people actually want, i.e. userpics, would be another. Or possibly the option to use your space as you want to use it - I never use voice posting, so I've got all this "space" that I never use.
[User Picture]
Date:March 14th, 2008 01:18 am (UTC)
What can they offer?

It's mediocre as a blogging platform. Make it a better blogging platform. There should be nothing wordpress.com or blogspot.com offers that livejournal.com doesn't offer.

It already kicks their arses as a social network. Make it somewhere people would just happen to set up anyway.
[User Picture]
Date:March 14th, 2008 01:30 am (UTC)
Agreed. I am losing friends left and right to WP and have a lot of friends who are NEW to blogging who would never come here, because it's actually easier for them to host their own WP blog, and it does more.

There are ridiculous things wrong with LJ, such as limitations on tags. You can only have so many and renaming and consolidating them NEVER works right. There's not a good memories feature for bigger communities or people who want a better way to bookmark other people's entries. The layouts are pretty lame, seriously. If someone wants to write a serious column, they sure aren't going to do it with cartoon penguins on the top of the page. Even if they did, half the LJ features on work on certain layouts anyway.

Why not put in something a lot more like WP's widgets? Where I can drag/drop my goodies wherever I'd like them? I guarantee you people would pay for that.

Also, randomly: Why isn't the Help button clearly marked on the front page of the site? Hiding it in that drop down menu has to be the dumbest thing I've ever seen. Six or seven years on LJ and I still forget where it is sometimes.
[User Picture]
Date:March 14th, 2008 01:33 am (UTC)
A huge number of LJ users originally joined LJ specifically because it had no ads anywhere, no ads visible to any users. We wanted to support that economic model, and many of us were willing to pay for it. Now that this economic model is rarer than it used to be, I think many of us would be willing to pay a great deal more for it. If SUP took a drastic action like no longer forcing any users to see ads anywhere on the site, I think many users would be eager to pay more money to financially support that move. Some users obviously couldn't afford more, but if there were a wide range of prices for paid accounts with varying amounts of features, I think users would be emotionally moved to pay as much as they each could afford, not so much for the sake of the features themselves as for the sake of supporting an ad-free economic model again.

Also, if SUP makes any promises about doing anything on a permanent basis to win back users' loyalty, SUP needs to back up its promises with a legally binding contract that really guarantees that whatever it claims is a permanent policy really will be. LJ users have seen way too many promises broken at this point, both by SixApart and now by SUP, to believe those sorts of promises anymore without a formal legal contract.

Edited at 2008-03-14 01:34 am (UTC)
[User Picture]
Date:March 14th, 2008 07:56 am (UTC)
Now that this economic model is rarer than it used to be, I think many of us would be willing to pay a great deal more for it. If SUP took a drastic action like no longer forcing any users to see ads anywhere on the site, I think many users would be eager to pay more money to financially support that move.

IAWTC. I think that carving services up into a-la-carte sections could be effective, but even barring that, for no ads (and could we cut down on the WTFery? ...oh sorry, that's me blue-skying) I'd be willing to pay say 150% what I do now.
[User Picture]
Date:March 14th, 2008 01:49 am (UTC)
I hate the lj staff account
It allows them to hide as a conglomerate and not appear human
[User Picture]
Date:March 14th, 2008 02:25 am (UTC)
Whereas I like it because at least it doesn't look as if it's one person saying one thing, while another says something else (even if that actually happens).
[User Picture]
Date:March 14th, 2008 02:14 am (UTC)
Hi, random person here.

I'd love to see the tag-limit disappear. For me tags are the best thing LJ has to offer! I wouldn't mind paying for a certain amount for tags like you pay for addition icons or storage space. (Honoring of course that perm accounts always get the highest amount free).
[User Picture]
Date:March 14th, 2008 02:20 am (UTC)
"Given that the current monetization structure is not working..."

Why isn't it working? I'd love to hear more about what works, and why the current state of the universe doesn't.

Maybe the ideal solution is lower expectations. As long as enough income is being generated to pay for the servers and the bandwidth and a few engineers to keep it all working - why does LJ need to make massive amount more money? MySpace envy is not a way to run this business.

LJ's major competitive advantage is the established community, and that it is one of the few places you can go online without advertising. I fear that the current path LJ is on has been one of undermining itself. Piss off the community and eliminate the ad free culture that make LJ unique, and what do you have left?

I know I am having second thoughts about renewing as a paid member. I never paid up for the features, I did it to support the community and culture of LJ. What reasons will I have to keep paying in the future?
[User Picture]
Date:March 14th, 2008 09:20 am (UTC)
I think that it is because it is a business people will expect a return on their investment. I don't see that as necessarily a bad thing as the only way a business like this can grow is by continuing to meet its customers expectations.
[User Picture]
Date:March 14th, 2008 02:24 am (UTC)
Thanks for letting us know what it looks like from your side.

As for business issues, I don't think LJ can become MySpace or Facebook, not without really deep pockets, some kind of easily-demoed killer feature, and luck. The problem is that 6A/SUP seems to be going in that direction by cannibalizing the user base. And it's not like MySpace or Facebook are turning a profit yet.

I don't know if the opportunity's been completely lost, but building on a steady stream of income from paying customers seems like a refreshing change compared to the hot air and nonsense coming from some of the other sites. It would depend on making customers really happy though.
[User Picture]
Date:March 14th, 2008 05:37 pm (UTC)
I don't think LJ should try to become MySpace or FaceBook. We're all here for a reason. LJ does things that MySpace and FaceBook do not. I hate MySpace. It's so cluttered. LJ isn't. Well.. it didn't used to be. The way I use it (ignoring all everything that's not my friends page, my profile page and my journal) it's not. For other folks? I can't say.

LJ needs to stop trying to be MySpace/FaceBook and be LJ. It needs to sit down and delineate where it is different from MySpace/FaceBook and build on those differences. Every time something changes, the majority of users howl about how we don't want to be on MySpace, as each change LJ has made has made it more like MySpace. Quit trying to be like everyone else and be that special website that we all flocked to years ago and want to see continue.

And that means actually listening to the users, what THEY(we) want. Has SUP considered getting some anthropologists out there to do some ethnographic studies on LJ users? I think that might be an excellent start (says the Grad Student in Applied Anthropology...).

The problem is, LJ has ALWAYS had problems communicating with its userbase. Even when brad was running things, the customer/user communication was gods-awful. When 6A took over, the customer communication became press releases, and that's the same tack SUP is taking. What no one in LJ land seems to understand is how online communities work (which is why it's my thesis project). How passionate we are. How LOYAL we are. And how we are unafraid to tell the Powers That Be that we're pissed off, and then take that message to the streets. We don't just get huffy and walk away. We get huffy AND we make that huffiness public. Making money off of an online community is different than making money off of the "typical" customer base. LJ needs to understand that. I can't count how many companies I've seen (and worked for) who have taken their online communities for granted, and then gotten burned by them. LJ is well on its way to doing this, and I don't want to see that happen.

(btw, Hi danah you don't know me... but we do have a one-degree separation in a certain red-haired Australian anthropologist!)
[User Picture]
Date:March 14th, 2008 02:24 am (UTC)
I intuitively feel that a modular system providing a high level of features will be a good way for livejournal to generate revenue.

For example, as with your icons, involve an option for a highly-competent directory or long-tail (amazon) based interest/friend finder, and grant access for $2 a year.
and maybe $2 for another 10 icons, or something.
hire some real designers to make some layouts, give access to a group of 3 for $2.

Make them like shopping for crap for your cellphone.
I could have a "core basic" account with 10 icons for $2 and then the "winter" theme pack of $2 and then the 100% customizable moodthemes for $5 a year.
Total cost would be about $8 for things I use, enjoy, and reflect my personal usage.

Or hold Russia hostage for a large sum.
(Deleted comment)

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