LiveJournal Is Forced to Bring Basic Accounts Back

Looks like the users still have the power to influence decisions of service providers in the web 2.0 era. I have just seen the news (on a Russian-language blog since LiveJournal is a platform mostly popular among Russian users) that LiveJournal management (the Russian company Sup) made a decision to give the users basic accounts back.

As a short summary, until March there were three levels of accounts on LiveJournal: basic (no cost, no ads, minimal features), plus (no cost, ad-supported, medium features), paid (no ads, costs involved, all the features). It seemed to be reasonable for some time for the company as they viewed the users that paid zero, watched no ads but still generated content as a necessary component of the system. I think by now everyone should have grown accustomed to freemium model and understand the necessity to watch some ads if you don't want to pay for the service directly. But the problem with Russian users is that we strongly hate all kinds of ads (I am not but I am really an exception, unfortunately). This is one of the reasons that we have only a handful of healthy profitable web companies in Russia - and those are the companies that have reached mainstream users that simply have no idea that ads can actually be blocked.

It is obvious that the basic users generated absolutely zero income for LiveJournal but still cost it money for hosting (not to mention staff salaries, office costs, etc.). And with the huge number of such users that were comfortable with only a minimum feature set but very uncomfortable about ads it has evidently become too heavy of a burden for the LiveJournal owners. And back in March they have made a decision that no new user could choose to have a basic account and no existing user could switch to a basic account any more. This was not a welcome decision - in fact, it was encountered with users' revolt (passionately described by Veronica Khokhlova at the Global Voices Online). The decision even resulted in a one-day content strike by a number of users (some of them very popular) when they published no posts and submitted no comments.

I myself can not agree with this type of reaction as I know that running a company (especially a huge one) involves costs and these costs should be covered somehow - by fees charged or by ads watched. But the Russian users think different: they believe that Livejournal (and Sup) is nothing without them, that it only exists because of their efforts and because of them taking the time to create the content for the platform. Watching the companies fail due to their inability to make any money, I have come to believe that there was nothing wrong with the decision from the business point of view but it seems that sometimes users' revolt can be too powerful to resist. So contrary to any business logic, the company has made a decision to return the basic accounts some time in August. But it looks like there will still be some changes to the previous structure anyway - the company will work closely with select users to find a compromise solution to make sure that the company still can make money and the users will be happy at the same time. Right now the users are not exactly happy about this new decision anyway as what they actually wanted to have was status quo (before the March decision) instead of some consultations intended to find a compromise. But I still feel it is a very generous move for Sup proving that they value their users very much - maybe too much for the users that don't want to realize that they use a service that needs money to survive and grow - and continue to make them happy.