denise: Image: Me, facing away from camera, on top of the Castel Sant'Angelo in Rome (Default)
Denise ([staff profile] denise) wrote in [site community profile] dw_news 2024-09-17 03:15 pm (UTC)

The problem with unbundling features or having different account tiers with different features (not just different quotas for existing features) is that's not how we set our prices -- we basically spread out the usage across all paid accounts, because each person uses a different subset of the paid features that cost us extra to offer and nobody uses the maximum amount of all of them all at once. The pricing isn't set by how much everything costs us to offer so much as we tallied up the costs we predicted at various usage levels, guessed at how many people would pay us, and divided the one by the other and did a little bit of handwaving and applied some magic to the results. (I used to have an email message from the old pre-launch mailing list where I got into all the predictions and how much weight I put on each of them, but alas, it has been lost to time and "oh shit that archive was on the one machine that accidentally wasn't being backed up".) It's actually really interesting how well my predictions worked: the cost per user wound up a little higher than I'd predicted, but the percentage of users who paid us was correspondingly higher, so it all evened out! Basically, it's not that you're paying for the cost of the extra services, it's that every paid user is subsidizing about ten or so free users' use of the site, and we throw in the extra features as a thank you and as a way to make paying us attractive, if that makes sense?

Post a comment in response:

This account has disabled anonymous posting.
If you don't have an account you can create one now.
HTML doesn't work in the subject.
More info about formatting

If you are unable to use this captcha for any reason, please contact us by email at support@dreamwidth.org