March 13, 2008, Thu 11:17 PM Internet
LifeJournal is becoming an entirely commercial service: now one can launch a blog free of charge only if he agrees upon advertising to be posted in it. Experts have various opinions regarding the given step of the Sup Company. Some regret that the company is unable to find other ways of funding, others on the contrary advise Sup to abandon paid accounts in favor of those with advertisements.
One of the most popular subjects discussed by LiveJournal’s subscribers is closing the option to register new basic accounts. That is the first type of accounts at LiveJournal, whose owners do not pay for the services and no advertising is posted in their blogs. An alternative to such blogs are paid accounts (for $25 a year a user is provided with a full range of additional services, no advertising posted in his blog) and improved accounts that were launched two year ago (some additional services are available to subscribers for context advertising posted in their blogs). Now it is impossible to register a basic account, no official announcement being made. Only corresponding amendments have been made to the list of Frequently asked questions.
The press service of the Sup Company, which acquired the rights for LiveJournal last year, confirms the mentioned changes. ‘Life is never the same’, - explains the press service. At the same time Sup adds that those users, who are currently the owners of basic accounts, will be serviced as before. Brad Fitzpatrick, who is the founder and member of the supervisory board at LiveJournal, wrote in his blog that he was against such a decision. ‘They are evident to have partially followed my advise and not abandoned basic accounts for the already existing subscribers’, - supposes Mr. Fitzpatrick. Judging from statistics, about 860 thousand of the Russian language subscribers are using improved accounts, 630 thousand – basic accounts, and 76 thousand – paid accounts (the total number of blogs currently registered at LiveJournal is 15).
There is nothing unusual in closing of basic account registration, says Anton Nosik, head of the blog service at Sup: ‘There are no other commercial services in the internet with similar accounts. There are non-profitable blog resources (for example, Lj.Rossia.org, Diary.ru, - CNews’s note) with no advertising, disputes committees, technical support services, additional services. So one can hardly predict what might happen to such blog resources in case of sharp increase in the number of subscribers’. Mr. Nosik adds that there is also nothing illogical in LiveJournal to have made no announcement: ‘We do not consider it necessary to inform those, who have not opened a basic account during 9 years of LiveJournal’s existence, that there is no such an opportunity any longer’.
Meanwhile, the existing LiveJournal’s subscribers do not approve of basic accounts cancellation, while several experts relate the given fact to Sup’s poor commercial strategy. ‘Sup’s seeking commercial efficiency is praiseworthy. However, LiveJournal’s model based on free accounts have been formed long before its acquisition by Sup, - says Aleksey Chernyaev, representative of the E-commerce Committee at the National Association of E-commerce Participants. – It was the given model that attracted most of subscribers to LiveJournal and made it the leading Russian blog system, and attractive investment tool. So LiveJournal’s strategy is based on increasing the number of users, while cancellation of basic accounts creates an artificial obstacle to LiveJournal’s development and contradicts the blog development trend’. According to the expert, monetization of the service is necessary, but the solution should not be so strait forward. ‘Optimal monetization is when users pay for interesting additional options (like sms-payments on dating sites), but they should not be forced to pay for a basic account, - says Mr. Chernyaev. – Unfortunately, Sup has failed to develop such a model that might encourage LJ’s subscribers to pay voluntarily’.
Brad Fitzpatrick, LiveJournal’s owner was against basic accounts to be abandoned
Competitors consider the step undertaken by LiveJournal long-awaited. ‘Brad Fitzpatrick initiated LifeJournal as an entertainment service for programmers, so no advertising was planned to be published there, - says German Klimenko, Liveinternet.ru’s owner. – However, with time LiveJournal has become widely popular, so there has been no other way of development but the commercial one’. According to Mr. Klimenko, cancellation of basic accounts does not affect the number of new registrations: ‘Subscribers usually draw their friends to social networks. Besides, most new subscribers will simply pay no attention to advertisements posted in their blogs’.
Furthermore, head of one of rival projects believes that in the near future the service might also abandon paid accounts. ‘Owners of paid accounts are of certain interest to advertisers. However, under the existing scheme such subscribers see not advertising, which reduces revenue from advertising’, - thinks CNews’s source. But Sup assures that it does not intend to undertake any steps in the given direction. ‘To take such steps, the average revenue per user should exceed $25 a year (the cost of one account), which is unlikely to happen soon’, - says Anton Nosik.