LiveJournal Innovates Subscription-Based Revenue Model – Offers Subscription for Life

It looks like the world financial crisis is providing us tons of new materials to cover with companies inventing new and more promising ways to monetize their services looking for additional revenue sources. The latest examples included an interesting idea by Calgoo to monetize online calendars via the so-called in-calendar marketing and Ma.gnolia trying to charge users for the social bookmarking service. Today it is LiveJournal with an interesting new idea that will probably change the way we think about subscription-based revenue models for web companies.

The idea introduced today is dubbed “Permanent Account” which means that after paying a fixed amount of money a user will be able to enjoy all the features of a paid account for life. It is quite well known that LiveJournal’s free accounts are quite limited and people heavily blogging on LiveJournal as their main platform need to go for a paid subscription for larger storage space and ad-free browsing.

The idea of subscription for life is certainly something worth our attention. One of the benefits quoted by LiveJournal is that the user receives a peace of mind that comes with knowing that you will never ever have to pay for the service. I myself know that if I used LiveJournal, I would have gladly paid as I usually go for the longest subscription period if I can afford them exactly for this reason: I love knowing I am safe for a long time.

To create more buzz around the permanent accounts, LiveJournal came up with another interesting approach of distributing it to users as this subscription option will not be permanent itself: LiveJournal will only offer it on sale for a few days. The initial sale will begin on November 20 and will continue for 6 days when all the users willing to purchase a permanent account will be able to buy it while the next sale will only happen at least a year later. I think the words “at least” mean that if this sale does not work and only a handful of users choose to pay a nice amount of $175 for a permanent account, this experiment will be forgotten by LiveJournal. By the way, in addition to having all the benefits of a paid account (regular price of $20 per year) and never having to worry about paying for LiveJournal again, there is yet another motivation to buy it as $25 of the price paid for a permanent account will be donated to charities.

Of course such a trick of making users pay for a lifetime usage of their service could never work for a smaller company that could go out of business at any moment leaving users behind without their money and without the service they paid for. But probably LiveJournal is a company mature enough to be able to afford such an approach and hope that its loyal users (and there are obviously some very strong fans of the old-fashioned blogging platform, especially here in Russia) will choose to pay a one-time fee to never worry about paying for their accounts again.

But even for LiveJournal it looks like it will be incredibly difficult to sell many permanent accounts because of users’ revolt over the recently redesigned profile pages. Judging by users’ comments everywhere, the majority of active users find their new profile pages to be ugly and insist on LiveJournal offering them an opt-out to be able to keep the profiles as they used to be. It is well known that any redesign of a web product will always find tons of loyal users who will protest as loud as they can - we have seen it lately with Facebook and iGoogle, for example, and we’ll be sure to see it for Google News once the new design is rolled out to all the users.

So even if I do like the idea of blogging accounts for life introduced by LiveJournal, I think the timing may not be right with users protesting against the profile pages and promising not to renew even their regular 1-year subscriptions. We’ll have to wait and see how successful the experiment is for LiveJournal but I’m sure we’ll see other internet companies making similar changes to their subscription options following LiveJournal’s example.