Photobucket paying for decision to charge a fee
When John Corpus took over as chief executive for aging Denver internet company Photobucket in late 2015, he had one main task: Turn the online photo-sharing site into a sustainable business.
By July 6, Photobucket’s 100 million registered users found out how that was going to happen. Overnight, millions, possibly billions, of photos uploaded to hobby sites, message boards and niche forums in the past 14 years were replaced by an image of a meter running at 100 percent. To see the original image, one needed to “unlock your account” by upgrading to the new $399 plan.
The customer backlash was brutal. Users vowed to cancel accounts rather than pay a fee. Many accused Photobucket of holding their photos for ransom. A man in London even started a Change.org petition to demand that Corpus revert back.
Corpus, a Bay Area resident who travels every other week to the company’s headquarters in Denver, said Photobucket had to plow ahead. Three-fourths of its costs paid for third-party hosting for nonpaying users.
“There is no way to make 100 million global people happy,” said Corpus, in an interview with The Denver Post last week. “It wasn’t an easy decision. When we look at the community we’ve built, which is a great community, we want to make sure we have a sustained path to profitability so that we can continue to take care of this community for years to come.”
Some users understood. Enough have paid the annual fee in the past few weeks to see “our revenue double since we’ve launched this initiative,” he said. Others? Not so much. “I feel like other users and myself have been punished for supporting the site throughout the years, with this hefty fee,” said James Cann, a 10-year Photobucket user who started the Change.org petition. “It’s a shame that such a drastic measure has been taken and I wish John and Photobucket the best for the future, but unless something is done, I won’t be continuing with my account and I expect this will be mirrored by frustrated users worldwide.”
The petition had 647 users as of Thursday afternoon.
While the price was shocking, many were more upset at how Photobucket rolled out the new policy. There was no explanation. No mention of economics. And to many, it was with too little notice.
Michelle Rogers-estable said the only notification she had from Photobucket was in an email on July 7. As a director of a center that mixes technology and education at the State University of New York in Oneonta, she has often recommended the service to faculty and students. No longer.
“So charging is not what I found disconcerting. It was the shift in price that was extremely disconcerting. To go from free to $399 a year for the same level of service shows a complete and utter lack of consideration for longtime users of the service,” she said, adding that many stay-at-home moms and student bloggers can’t afford to pay. “What Photobucket did was basically strong-arm people into having to pay, at least those who had relied on it a great deal for many years. There is no excuse to treat one’s long-term clients in this manner.”
Corpus said Photobucket started notifying users in early June but admitted many emails bounced or were never opened. Discussions to address customer outrage are ongoing. What’s important, he said, is a customer’s entire photo collection is still available. They must log in and if they decide not to upgrade, they can download their images and go elsewhere. Corpus confirmed that Photobucket has no plans to impose a deadline to upgrade, and the company won’t delete any photos.
“I believe that some of the things we’re going to be doing in the future, we’re going to be addressing some of the questions and concerns and taking care of the customers in a much better way,” Corpus said. “There are a lot of really positive things you can do with sustained profitability.”
Was the customer backlash expected?
Corpus paused. For 12 seconds.
“No,” he finally said.
Struggling to survive
A visit to Photobucket’s Blake Street headquarters in downtown Denver last week showed a shell of the company it once was. The loft-like space with exposed brick walls and wood-beam ceilings looked bleak with only a halfdozen employees milling around. The company employs 20 people, including a few in the Bay Area.
Just two years ago, there were about 60 people in the same space. Its website was attracting 60 million unique visitors a month. Photobucket appeared to be in a revival, thanks to a recent $10 million investment and acquisitions including startups like social video and advertising site Milyoni, which Corpus started.
But, apparently, making money was never the priority that it is today.
“Photobucket has not had a sustained period of profitability,” Corpus said.
Since its start in 2003, Photobucket was all about sharing photos online. It became a valued free resource for bloggers unwilling to pay their own blogging company $4 a month to host their photos, according to a 2005 Wall Street Journal story that described Photobucket as “the most popular online photo destination” with more visitors than the photo sites of Kodak and Yahoo.
Other photo sites at the time focused on getting digital photos printed on paper. Photobucket wasn’t interested in prints, a market that peaked in 2010, with 16.6 billion prints, according to Keypoint Intelligence, a market research firm.
Online photo sharing was the growth industry. It went from 1.8 billion photos shared online in 2010 to 103 billion last year.
“For the most part, all the personal photo sharing between friends and family is done on social networks,’ said Alan Bullock, Keypoint’s associate director in consumer professional imaging services. “And Facebook is by far the leading site.”
Advertising was the revenue stream for Photobucket, even if the company was criticized for highly obnoxious ads that bypassed some ad blockers. But as advertising revenues dwindled — “We’re not that premium brand that warrants and gets those premium advertising dollars,” Corpus said — the company looked for new revenue sources.
Photobucket now sells prints and photo gifts so customers can get their photos printed on blankets, pillows and pet bowls. The company is also testing a new store called Photobucket Deals, which is a marketplace of random oddities such as a toilet night light or a cover for your margarita glass. Both print-on-demand markets and discount marts are very competitive industries, but Corpus said he hopes to highlight Photobucket businesses in the future.
Photobucket still offers a free, ad-supported plan that is limited to 2 gigabytes of storage and no hosting. Adfree plans are also available for $2.49 a month, but again, with no hosting. The site attracts 35 million unique users a month, down from 60 million two years ago, Corpus said.
“That’s still great for Photobucket, but it’s still in decline,” Corpus said. “People would love 35 million unique monthlies.”
Online image hosting is a different beast. None of the popular photo-sharing sites stepped up to take in wary Photobucket users. Smugmug allows it, starting at $3.99 a month. Yahoo’s Flickr also has a free plan, with ads. And while Imgur is a popular third-party hosting platform, its terms of service forbid the practice.
People who have uploaded thousands of images over the years to forums or old blogs are unlikely to pay the $399. But expecting businesses that rely on image hosting to pay up seems reasonable, Bullock said.
“While $400 is a lot more than nothing, it could be something small to pay as a business until you find something else,” Bullock said. “But when you find something else, they may start charging, too.”
Photobucket must now also improve its reputation.
“They’ve got to look at their options. I don’t blame them for that,” he said. “But now they’ve got a selfinflicted black eye that I think will be difficult to recover from.”
Tamara Chuang: firstname.lastname@example.org or visit dpo.st/tamara
Photobucket CEO John Corpus poses at company headquarters in Denver. Photobucket is struggling to balance profitability with a customer base that was accustomed to the site’s free photo hosting but is now being asked to pay.