Back in July of 2011, Netflix announced that it would be separating its movie streaming and DVD rental services into two separate subscriptions, increasing the cost for customers who wanted both by about 60%. The news was met with a massive customer backlash online, and over the next three months, more than 800,000 customers canceled their subscriptions and the stock price took a huge hit. The story became a lesson for corporate executives on how not to do price increases. Apparently SmugMug didn’t get the memo.
The subscription-based photo sharing service sent out an email to “Pro” customers tonight informing them of a major service change and price increase. The details are eerily similar to the Netflix case.
If you swooned at the Fujifilm X-Pro1′s retro design and fantastic image quality when it was announced at the beginning of this year, but then balked when you saw the $1,700 price tag, you might want to keep a close eye on the upcoming Fujifilm X-E1. Photo Rumors has published the specs of the camera, revealing that the camera will hit shelves at a price somewhere south of $1,000.
Have you ever wondered how Leica chooses its pricing for its high-end cameras? J Shin has written up a great post over at Leica Rumors that offers a geeky and lengthy explanation of the economics behind the company’s pricing decisions:
Every time there is any kind of a product-related announcement here and elsewhere, there are a number of invariable comments complaining about and/or defending Leica’s price strategy. In making these comments, people make references to various economic and noneconomic reasons why Leicas are priced the way they are. This essay is an attempt to show that, basically, almost everybody is right, at least when it comes to Leica’s profit motives. Rather than nefarious greed, devious psychological warfare, and, as some often mention, Dr. Kaufmann’s ignorance of Leica fandom, Leica prices are basically a function of mathematical inevitability.
The Mystery of Leica Pricing Explained [Leica Rumors]
On Monday Adobe officially announced its upcoming Creative Cloud subscription service, which will allow users to “rent” CS6 for $50 a month or Photoshop by itself for $20 a month. Whitson Gordon over at Lifehacker did some calculations on whether subscribing is actually worth it. Here’s his conclusion:
If you’re upgrading from a previous version of the program, it’s quite a bit cheaper to just grab the upgrade from Adobe instead of subscribing. And, if you can get a student discount (which nearly anyone can do), that’ll be cheaper too—at least in the case of Photoshop, which doesn’t seem to offer a subscription for students. In the case of the Master Collection, the student subscription is cheaper than the regular student version, but still not cheaper than upgrading from a previous version. However, once you get past the two year mark, all bets are off—the subscription is more expensive than buying, even if you plan on upgrading every two years.
[...] our official recommendation is to stick with the retail versions unless you only plan on using your Adobe product for under two years. The subscription is great for the short run [...], but it’ll cost you quite a bit more in the long run.
Adobe’s John Nack also writes that one of the huge benefits of the new model is that it drastically reduces the barrier to entry. Previously you had to pay $700 to get started with using Photoshop. Now the cost is $20.
Is Adobe’s Creative Cloud Subscription Cheaper than Buying Photoshop? [Lifehacker]
Bad news if you’re a film shooter and Fujifilm is your brand of choice: the company has announced that it will be increasing the worldwide price of its entire line of photographic films starting in May 2012. In the announcement, the company blames demand and economics for the decision:
The demand for film products is continuously decreasing, yen’s appreciation and the cost of production, such as raw materials, oil and energy, continues to rise or stay at high level. Under such circumstances, despite our effort to maintain the production cost, Fujifilm is unable to absorb these costs during the production process and is forced to pass on price increases. To sustain its photo imaging business, Fujifilm has decided to increase the price of photographic films.
Fujifilm remains committed to photographic products and asserts that even with the new price. Its photographic products remain exceptionally good value compared with other system products.
While the announcement doesn’t mention how much prices will increase by — they state that it will vary depending on market — Fuji Rumors reports that it will be an increase of over 10%.
(via Fujifilm via Fuji Rumors via Mirrorless Rumors)
Image credit: Roll On by Looking Glass
When it was announced that Facebook would be acquiring Instagram back on Monday, the web balked at the $1 billion price tag and started shouting “bubble”. Is it really indicative of another tech bubble, or was it a smart move on Zuckerberg’s part? Andy Baio — the founder of Upcoming.org, which was purchased by Yahoo — has written up an interesting article over at Wired that takes a look at the numbers. For a billion bucks, Facebook snagged a startup with a whopping 35 million users and just 13 employees. This means that Instagram had a relatively cheap cost-per-user price and a ridiculously high cost-per-employee price.
Instagram’s Buyout: No Bubble to See Here [Wired]
Kodak’s film business just can’t seem to catch a break. One week the company announced the death of its entire slide film lineup, Kodak announced today that it is increasing the price of all the surviving films by 15%, stating,
We have to contend with further increases in energy and raw material costs, and higher costs associated with lower volumes.
Therefore, to remain a sustainable, viable business, the company is implementing a price increase for consumer and professional films.
(via Amateur Photographer via Photo Rumors)
Image credit: film by ka_tate
We’re unclear on whether this is a permanent price drop or a temporary sale, but Adorama is current selling Lightroom 3 for just $80. That’s $59 cheaper than Amazon’s price and cheaper than the student and teacher edition.
Adobe Photoshop Lightroom 3 [Adorama]
Update: Apparently the deal is for today (Valentine’s Day) only.
When Sigma released its SD1 DSLR with its fancy Foveon sensor last year, many photographers balked at the camera’s $9,700 price tag. Now, perhaps due to the launch of a new generation of Canon and Nikon DSLRs, Sigma is rethinking the camera’s price. In a press release put out today, the company announced that the camera will be re-launched the Sigma SD1 Merrill — named in honor of Foveon co-creator Richard “Dick” Merrill.
However, even with this revolutionary image sensor, we could not solve issues related to some of the manufacturing methods before the start of mass production, and the production cost ended up substantially exceeding our originally expected price. As a result, we had no choice but to set the price of the Sigma SD1 high. This caused great discouragement to all of you who looked forward to its release, and wished to experience the very unique image quality of the Sigma SD1 in person; this has become our biggest disappointment and pain.
Since then, overcoming this situation has become the first priority for us and Foveon, and we have together made improvements to reduce production cost substantially. Even though this effort took nearly a year, at last, we achieved a reduction target close to the price we originally planned. Therefore, we decided to release Sigma SD1 as a new product
The company has decided to lop off a whopping $6,400 from the MSRP, meaning the camera is now priced at $3,300. It was selling in stores for $6,899 before, so the new “street price” will likely be around $2,300.
(via BusinessWire via Photo Rumors)
Image credit: SIGMA SD1 front 01 by HAMACHI!
Adobe’s cloud-based subscription program, called Creative Cloud, now has a price tag: $50/month with a minimum one-year agreement. Subscribing will get you access to the latest version of Adobe’s popular programs (e.g. CS6 and Lightroom 4) without the pain of shelling out big bucks for buying the boxed version and subsequent upgrades. In addition to receiving updates to the programs as soon as they’re released, you’ll also be given 20GB of cloud storage that can be used for syncing your work.