If you want to talk inclusion, you have to talk price point.
We started to notice something recently at Seed&Spark. More and more, people are cancelling their subscriptions because they can’t afford it. So we wrote to them, and asked what would make it affordable. They all said they’d love to be paying full price but…and then a host of reasons that didn’t surprise us. This is the world we’re in right now: wages are flat, the cost of living is going up, student debt is at an all time high. It’s hard out there. (You don’t have to tell a bunch of folks who’ve been living on early stage startup wages for the last six years this…)
The demand of the current content marketplace on audiences is getting crazier. Here we all thought we were cutting the cord from expensive cable bundles, but once you start adding up Netflix, Hulu, Amazon, Spotify, PLUS the cost to connect to the internet, the monthly bill is as high as it always was. So as a new entrant to the marketplace, and thousands of others trying to enter also, we knew we’d have to do some things really differently at Seed&Spark — both for creators and audiences.
We’re ultimately trying to build a business that levels the playing field for who gets to tell stories — so that everyone has a chance to see themselves represented on screen. In order to make sure that all different kinds of creators from all different kinds of backgrounds are able to tell stories, we have to help filmmakers make a sustainable living from what they make. So, if we’re going to bring thousands more creators to the table each year, we have to bring their audiences to the table also. Their audiences may come from under-resourced communities or be much younger or much older and on much tighter budgets. The socioeconomic landscape doesn’t just disappear when you start talking about movies. The same rules apply. Creators who have been left out often come from communities that have been left out. There are so many companies out there talking about diverse audiences but charging high prices for their services. When we talk about inclusion, we’re also talking about all income brackets. Everyone deserves to participate in getting representative work made and seen.
And we have to balance this with the goal of filmmakers making a living, so we can’t show their work for free. There are way too many platforms out there profiting from showing filmmakers’ work for free, and every chance they get, it seems they change the rules so it’s harder for filmmakers to monetize even against the ads shown on their content. (COUGH *YOUTUBE* COUGH) There are also still so many powerful messages saying: just distribute this one free for the exposure. And, you know, artists die of exposure.
So we decided to introduce Pay What You Can subscription streaming: a range of pricing plans for the same service, starting at $2 a month. And we split every subscription fee 50/50 with our creators, no matter the plan — so if you can pay more, more goes into the creators’ pockets. But the most important thing to us is that anyone who wants it should have access to a library of truly diverse content from creators who are trying to build sustainable livings wherever they are.
We’re in a crazy time where doors once open between nations, communities, friends, even family are being slammed shut. Culture is the last open door in many of these cases. Entertainment — movies and shows — can help us see the world differently, to share experiences with people who don’t look like us or think like us. It can build bridges, or create a safe space to connect. We don’t want anyone to close a door because of a few dollars a month.
I want to hear from you: are you building an inclusive product? How are you thinking about pricing? How do you weigh the business model risks? Let’s build some best practices we can share — leave your experience, questions, ideas in the comments.
UPDATE: WE LEARNED THINGS.
1. First and foremost, “I can’t afford it” has dropped from the #1 spot as why people cancel subscriptions. Churn has gone down by FOUR PERCENT.
2. Our initial offering was 5 choices: $2, $4, $6, $8 and 10. We sort of knew that would be too many, and we were right. We quickly discovered that the average base subscription price was just under $4, and for whatever reason, nobody chose to pay $8, but about 15% of people chose to pay $10. Also, we interviewed users who said, in effect, I’ll just pick the lowest price but $2 is, like, really low. So we’ve reduced the options in line with these learnings to $3, $6, and $9.
What’s awesome is that’s it will have a substantial impact on our creator payout almost immediately. On the back of the napkin I have in the restaurant where I am currently updating this post, it could mean as much as a 30% increase in our per-minute payout to creators. So it’s a dollar to you, but DOLLARS to our filmmakers.
We’ll report back as we learn more!
More where this came from
This story is published in Noteworthy, where thousands come every day to learn about the people & ideas shaping the products we love.
Follow our publication to see more product & design stories featured by the Journal team.
