The world’s most-beloved money-losing business needs your help
blog.flickr.net
blog.flickr.net
I've been taking photography seriously as a hobby for the past three years, and I use Flickr primarily as my portfolio, and right now I have between 100-200 photos on my account. I largely have positive feelings about what SmugMug have been doing with Flickr since their aquisition.
SmugMug presumably did their due diligence before making the acquisition, they should have had a decent idea of what it would cost them to operate Flickr even with the old unlimited-storage model. So I was surprised after they made the acquisition to see them abandon that model and delete tons of images users had uploaded to the service in good faith -- it seemed like the cost of hosting those images was something they should have factored into their planning. But if that's what it takes for them to keep the service up and running, I figured, maybe it's an acceptable sacrifice.
Now they come back a year later and say, whoops, we can't make the math work on this thing even after deleting all those photos. Which makes me wonder if the math ever really worked -- if they ever had a realistic plan for operating this service at all -- or if they just saw it was up for sale cheap one day, and bought it without really working out the business end of the equation. Statements like "[w]e didn’t buy Flickr because we thought it was a cash cow" make me suspect it was the latter.
There's also a weird dissonance in this appeal that gives me pause. If you're writing a message about how you're struggling to break even, you probably shouldn't trumpet how you've moved the whole system onto AWS, a notoriously expensive hosting option for things like static images. And statements like "Unlike platforms like Facebook, we also didn’t buy it to invade your privacy and sell your data" come across as vaguely threatening: "nice community you've got here, it'd be shame if we had to monetize it."
Second, one can’t always know “if the math works” because untested models depend on people. While Yahoo/VZ could have run tests to predict uptake, in a transition like this, there may not be the luxury of that level of market research. Entrepreneurs are regularly called on to make calls absent enough data, and have the character to course correct with candor. I think we’re seeing that character play out here.
Last, much larger revenue Internet services than SmugMug/Flickr are all in on “notoriously expensive” AWS/S3 as well, some with budgets that start with a B. What do they know that readers here might be missing about the TCO of ‘things like static images’?
For one, “notoriously expensive for things like static images” may be misunderstanding the value of a single image to its owner. To them, that image may be “priceless”.
When dealing with a set of images as an emotion archive rather than as a static image CDN, losing any single image should not be an option.
Static “image hosting” services lose images on a regular basis. S3 by and large doesn’t lose objects. If I could only have a single copy of something in a single place, I’d want it on S3. In that “you had one job” category, S3 is a game changer at a remarkably reasonable price.
Regardless of one’s opinion of S3, comparing tables of features may be missing critical differences that don’t manifest in that feature table, differences well worth the expense relative to other costs or opportunity costs.
95th billing makes this kind of stuff cheap :)
This is not a way to go for a financially troubled company.
This should be emphasised above all other concerns - AWS is absolutely the WORST choice to go for if the company is already struggling with money or not (yet) making any money. It's literally a hole for burning money.
You simply don't go for AWS until you have a superb business plan how to make significantly more money off of your service than Amazon does.
SmugMug did it primarily to improve stability and performance. They point out that Flickr hosts tens of billions of photos with 100M registered users and hundreds of thousands of paying customers across the globe. I see the need to use AWS (or any cloud provider for that matter) as a necessity to run a paid web service cost effectively at this scale.
Hope the 30% increase in performance was worth it...
SmugMug, by their own admission, bought Flickr to help keep it alive. Currently, they're not even looking to make money but reduce the operating costs. I'm sure they didn't take the decision to move to AWS lightly, at all.
> ...this kind of looks like they've thought of asking for money AFTER the move.
May be you're right that it might have been a mistake, but the fact that SmugMug are a heavy AWS user means it might have made a lot of sense to leverage not only the engineering and operational expertise but also the heavily discounted rates they must have negotiated with AWS?
My guess would be their main costs are from hosting all those high-res images, not anything they are doing with EC2 instances. So who cares if they pay a little more for their servers?
But I did a lookup - and live.staticflickr.com is using CloudFront for their CDN. That means they're paying a 5X premium just for image hosting. No need to have the CEO make a blog post acting like he's the Jimmy Wales of image hosting... just switch to a cheap CDN already.
Somehow HN experts can bypass all of that and do what I do full time with basically no information about the company in question. I really should hire a few of them.
Certainly you could make it in-obstrusive - just have a non-moving, small one in the header and a a larger in the footer.
Don't have any ads next to the photo.
Kicking the 'adult content' off the platform was the first step in that. This 'we tried to beg for money' letter is a good second step.
Hopefully your AWS infrastructure serves the upcoming ads faster as well.
I was never aware that speed was an issue with flickr. When a place has original content that is not available elsewhere, there is no competition for speed, imho, ymmv.
I can't buy a pro account, my content which was public on flickr for years, became against the TOS when smug bought it.
There were several marginalized community groups there that never transitioned as a whole either.
Sad, it could of become the social network better than fbook.
[1] https://meta.wikimedia.org/wiki/Wikimedia_Foundation_salarie...
The executives earn about 10 times what I make as a compiler engineer in a developed country. I wouldn't exactly call it modest, but it's not totally outrageous, I guess.
It seems to me that such a system should benefit from economies of scale so that a year's subscription should at least be cheaper than buying local storage.
So it's back to Google Photos for unlimited storage of reduced resolution copies and 15 GB of general storage (enough for over twenty thousand full resolution pictures from my Moto G5+).
Let's say their current revenue is R. The 25% promo reduces their revenue to 0.75R, but say they get y% more subscribers. Calculations show that if they can get an increase of more than y > 33.33% in subscriptions, then their promo works.