With all the questions about Market and Elements, and how we are investing and growing our business, I thought I’d re emphasise a few points from previous times I’ve posted here on the forums (and add a bit more colour and new info!)
First and foremost, as you all realise, Elements is no longer an experimental product and it continues to grow customers and revenue (even over the last two weeks). While it may be tempting to think that the Elements product is driving changes on Market, from all our analysis the bigger forces on Market are primarily the industry shifts. The long term trends started before Elements was launched and have continued since. The biggest single driver here being a growing pool of customers moving away from purchasing single items, to purchasing bundles and packs, then to choosing limited and unlimited subscriptions, and supplementing with free content libraries.
This trend is driven by a steady growth in content creators licensing digitally, married with customers interested to pay less, and startups persistently pushing at new and cheaper business models. Back in December I posted on this topic and a commenter cited Shutterstock’s Music subscription pricing as a great example of where pricing should be. It was about $149 p/month at the time. Just four weeks later, responding to a very competitive market of better priced music offerings, they dropped their price by almost 90%! I raise this, because customer interest in lower prices is not just a trend that Envato is subject to.
The good news is that our market analysis suggests that while prices are generally moving downwards in the competitive landscape, the volume of people interested in licensing digital goods is steadily climbing. What we’re working on at Envato is finding the maximal point where we can attract the most people at a price point that matches their wallet and interest, and keeps us competitive against new and existing players. The reason we’re doing this is because that will create the most revenue for both Envato and authors.
Having said all that, there will always be people who want to buy things as one-off purchases, especially in the template part of the market. This year alone, authors will make over $100,000,000 just on Envato Market. That number means there are also a wealth of opportunities - there is still a lot of money to be made on Envato Market! It is however a competitive market and one that needs innovation and ingenuity to break into as a new author, and to stay on top of as an existing one. We do have some new products like Template Kits, and other opportunities coming soon, such as tools for authors to merchandise and promote their content better and continual improvement of discovery. And as always, I encourage authors to watch for trends, and try to innovate their content approaches to match.
I thought it was worth calling out that in the last two weeks we’ve also seen some customers starting to relook at single purchases as a lower commitment way of licensing items (than a subscription) because of their uncertainty about the future. In fact, we’re currently reweighting our paid growth spend to lean into that trend and help customers find those purchases on Envato Market.
I think the overarching message here is that we do try to drive customers to the place where we see the best overall conversion and maximal lifetime spend. And we are completely committed to sharing that spend with our author community in a fair and equitable way.