Author-Driven Pricing Coming to VideoHive

Each time Envato announces new changes and they write we are closely watch the market and everything is under consideration it means they know nothing and they are experiment something new and the only persons that will face to problems are AUTHORS!!!

Each time they make new changes it means they are making bad and wrong decisions!!!

Sorry but It seems a team of blind persons are making these decisions for Envato.

Now they are going to run Author-Driven Pricing to Videohive because this is the only market that they couldn’t destroy it successfully before 2018.

I hope in future we can see better and wiser moderators and clever marketing experts in Envato company!

This is my BIGGEST AMBITION for Year 2018 :thinking:

Why?

If you ask them nicely, I’m sure they’ll gladly reverse their decisions to increase the author cut to 50% and up, just for you. That was obviously a bad and wrong decision.

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The fact that you have to go back several years, to 2011 (was it 2011?) to come up with an example of a change in author’s favor* to use in your typical cynical response just proves digiphic’s point actually, that all changes lately were not really what authors have asked for.

Digiphics wasn’t even an author back then, neither was I and I’d guess the majority of authors on videohive joined in the last 6 years.

I’ve seen you done better than that, SSS, much better.

*edit/ let me rephrase that: a change authors have actually asked for. Maybe if it wasn’t for some changes, life as an author would be worse, but nobody can actually tell if sales would be higher or not for everyone if things would have gone different.

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Well if somebody says that every single decision Envato has made is bad and wrong (which is inaccurate), the easiest way to disprove that, is by using author commission rate increases. If he had said every change lately has been bad or wrong, then I may have responded differently… but the absence or addition of one word can make quite a difference on a sentence.

Now you are nit-picking. If an author that is around for 2 years says all decision envato has made were bad then I would not assume him going back another 4 years in time to check if before he ended up here envato has made right decisions at some time. Clearly they have done right decisions in the past, else they wouldn’t have ended up with such a large authorbase.

Digiphics states all changes were bad. Does he have to add “All changes that he has witnessed in all time being an author here plus even twice that time before that”? If you think so, fair enough. But then you’ll have to accept that people will take that as nit-picking and maybe even accusing you of twisting someones words just to win an argument which is something I have seen you being accused of more than once tbh and I can understand where they are coming from.

However, my main point was - if even you, a clear envato supporter, has to go back 6 years in time to find an obvious “good” decision from authors point of view, then this says more than enough.

edit/ again, for clearance: the marketplaces today work for me just as good as they worked 5 years ago sales-wise, and maybe things would be worse if envato hasn’t made decisions like moving to US etc, we will never know. The recent decisions were just nothing the majority of authors did really “like” or asked for.

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Surely you’re joking and can see the irony in that? I responded to his comment by not twisting his words in the slightest, and taking them 100% at face value. You ‘twisted his words’ by altering his statement to make his argument more valid, and mine less. Case in point…

just proves digiphic’s point actually, that all changes lately were not really what authors have asked for.

Surely that is twisting his words? He didn’t say lately, and he didn’t say that the changes were not what authors have asked for either. Sure, that could easily be inferred from the majority of authors not wanting anything that’s bad or wrong, but it’s still padding what he originally said.

But fair enough, we’ll go for a more recent decision… Author-Driven Pricing on VideoHive. That’s neither a bad or a wrong decision, as it will be beneficial for all authors.

And surely you can’t agree that, lately or not, all decisions made by Envato are bad and wrong, all decisions only affect authors and Envato know nothing? That’s a bit extreme!

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Here we have the point where people tend to have a different opinion. If you take a look at the majority of opinions expressed in this thread, authors don’t see it as beneficial but as great danger.

Let’s just assume that people who are against something are more willing to post here than the ones in favor, so it may be wrong to say the “majority” is against it.
But for some, this is (another) bad decision from envato.

There are people who like this decision, yes, they are expressed here as well. They are just as correct as the ones disliking it.

It would be just great to see you accept that some authors feel that envato’s decisions were all bad without the urge to prove them all wrong. Cause quite frankly, I don’t believe you will convince anyone to convert from a statement of “all decision were wrong” to “all decisions were great” or even “okay”.

It’s a subjective matter and I guess it is just tedious to see you posting so much to prove people wrong and by going (in my opinion) out of your way (going back to 2011) just to make it look like those opinions authors expressed here, about envato not making the right decisions - and yes, that is an opinion - are “inaccurate”, because there is not really such a thing as inaccurate if you ask someone if he thinks something is better or worse. It’ s just his opinion.

For me, I’d prefer to not have ADP, for the same reasons authors have already expressed here. But it is envato’s decision and I can (or have to) accept that. It would just be nice to accept that there are people here who will express their feelings of envato not making any “right” decisions, because I think it is understandable where these feelings are coming from.

I can accept that people may feel so. I can even to some extend understand why people feel so. There were decisions that loaded more work or greater tax burden on many authors, and that makes it easy to feel like decisions are not made with author’s needs in mind.

Let’s see if there is some agreement we can come to. Raising author’s cut was good for authors, I do agree with you here :slight_smile: (Maybe we can do that again sometime soon?)

But most decisions after that are not as easy to declare as “good” or “bad” for authors, and there will be differing opinions.

What do you say SSS, could we agree on that statement?

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I agree with most authors here, with their fears and thoughts and so on! I share them with you.

However I have tried those author driven prices while I still had my portfolio on PhotoDune (to delete it - that was shocking for me!) More than those author set prices, coming to Envato Video Hive. Much more!

So I try, while still had a portfolio on PD lower my prices to files never sold: it was a bad outcome. You can not sell a bad item; a photo or footage or whatever for a few $, or cents-$. On the other hand good items will, I am sure, sell here for much better prices than they do now.

We are all unique. Each work, each author is unique. No one can copy us. Period.

I will try to balance my work; put lower prices, but not a piece of pennies or cents to items I did not sell so far. And I will raise prices for my work that sells well. If I can sell (my other series, other clips I produce, all here are exclusive!) elsewhere for 10x or 20x better price than here - why would I not try to do this here?

If i will sell 2, 3, 4 clips per month on much higher price it will be like sell 30, 40 clips on lower prices.

Let’s wait what time will bring. Hope I am not wrong, however. :wink:

Best wishes and best of luck in 2018!

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@jamesgiroux, what is the date to start Author-Driven Pricing in Videohive ? Thank you !

Thank you for letting us know with nice explanations beautiful words James, but we know this is the way Envato devised to lower the Item prices substantially while keeping her revenue intact. In other words we authors loose and you win.

one of the reasons that Videohive is great, is because the Items are NOT priced by authors so authors know going cheap is not an option here, and that allowed us to concentrate on quality knowing that it is rewarding in the long run. At the same time, reviewers did a great job raising the quality bar while keeping the price competitive. just compare the items now and then and anyone can see.

I am sorry to say that this “Giving the lever back to the authors” talk is bull***t … We already have the lever of “Creative freedom” with us and you are doing the great job of setting the price and defining the quality standards. That is why you have a great market place with wide variety of high quality content for a very cheap price. But now … You about to make this another Fiverr, which is full of cheap frauds, stealing everyone’s work 24x7.

I remember this happened in the telecommunication industry in my country. Every service provider went cheaper over the other to win the competition until they bankrupt, until finally the government intervened and set a lowest price threshold and saved everyone.

I have been here for 5 years and Videohive was a game changer for me. I am so gratefully thanking Envato for giving me a stable income with an amazing creative freedom … but I knew this wont last for long, because I have been watching for last five years. So I actually prepared myself by investing massively on education, so I do not think finding a job will be hard for me, but this ADP came in as a shock. I never expected it. Maybe you are trying to compete with Fiverr.

Let me say, please at least define a lowest price threshold, and let the reviewer decide it, but I know you wont listen because you plan to go as cheap as you can. And please don’t forget great authors made you this far, and you are about to substitute them cheap ones, but the Quality is what matters at the end. ADP will NEVER raise quality, because you cannot make quality for 4.99$.

I personally wish that you will postpone this idea of ADP for at least another 2 years so that I can complete my Masters Degree without a hassle :slight_smile:

Finally I hope … I really desperately hope, that I am wrong about ADP … or Envato roll back this bad idea !

Has anyone actually ‘done the math’, or are they just making things up as they go along?

Here’s the data I’ll use for my example, some of it just estimates…

Total revenue of VH per year: $10,000,000
Median price of all VH sales: $19 ($3.80 buyers fee)
Average commission to authors on sold items: 60% (25% authors fee)
Annual income for VH: $4,000,000

Let’s say that’s how it is now. When they implement ADP, the buyers fee always gets rounded up slightly, so Envato make slightly more if you keep your prices the same, but not by much. On Themeforest for example, Envato’s buyer’s fee was $11.80 on a $59 item. It’s now $12. So if we translate that data over to the VH sample data above, with ADP being implemented…

Total revenue of VH per year: $10,000,000
Median price of all VH sales: $19 ($4.00 buyers fee)
Average commission to authors on sold items: 60% (25% authors fee)
Annual income for VH: $4,105,263

So if everyone keeps their prices exactly as they are, then Envato earn an extra 2.56% a year. Now, if everyone reduces their prices considerably, like you are predicting, lets say even just down to an average of $17 rather than $19… then the numbers look like this:

Total revenue of VH per year: $8,947,368
Median price of all VH sales: $17 ($4.00 buyers fee)
Average commission to authors on sold items: 60% (25% authors fee)
Annual income for VH: $3,815,789

In this case, Envato have lost 7.5% a year. It could be said that total revenue will remain at $10m, as if prices are lower then people will just buy more stuff for the same amount, but even then, they still make a loss. So the question is, what self-respecting business would implement a new system that would lose them money. The answer is that some might, if they were under the impression that it might make them more money. And that’s why it was probably trialled one marketplace at a time. If it made them more money or the same money keep it. If it made them more money (and possibly the same money) then implement it on the other marketplaces.

If everybody has been dropping their prices left right and centre, Envato would be losing money, so there’s no way they would roll it out site-wide. So it makes sense that they’re not losing money. And for that to happen, prices must have been staying around the same, or some have gone up and some have gone down. Yes, they’ve covered their backs slightly by implementing the fixed buyers fee (a wise move), but they’re still going to take a hit if the average prices go down. I mean, not only does the fixed buyers fee cover Envato’s behind somewhat, but it also works as a deterrent when it comes to reducing prices.

I’m not saying it’s going to usher in a golden era of prosperity for all, but unless everyone at Envato is clinically insane, then from a revenue standpoint… they wouldn’t be implementing ADP on additional marketplaces if it has so far resulted in anything more than a negligible average drop when it comes to prices.

It’s not just about authors putting prices down, it’s also about the ability of authors to put prices up… and the type of content that might result in.

An example I’ve just though of… take Trapcode or VideoCopilot… with a tweak to the license terms they could now sell their content through VideoHive. $125 for Optical Flares on VC. Sell it for $125 here as well, $4 buyers fee (might be a bit more than that but not too much), $15 authors fee (12.5% - they’ll be Elite in no time!)… income $104. They currently sell through CGRiver and they must give them a cut, so I’m sure they’d be happy with that. “This item requires Optical Flares… click here to add it to your order” etc etc

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The one that figured out that they need to get the prices down in order to get more customers without risking to much of a share drop. Keep in mind with the old system (no fixed fee) they would get a massive hit, the hit authors get if dropping the price now.

How did you figure that out?

For example, each discount campaign drives tons of sales on which envato loses minimally on each sale because of the fixed fee but gains quite a bit on the volume.

And the prices went down quite a bit, (luckily not the drop I was afraid) on TF for example.

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Would that happen though? They’re probably the cheapest in the market, so it;s not like they need to go any lower. Maybe a $4 video will convince somebody to buy who’s not willing to pay $8 for a video… but is that kind of customer going to make any kind of impact? If you can’t afford to pay $8 at least once, but you can at $4… are they going to be repeat buyers?

The best you can hope for if something is $4 rather than $8, is that people will buy twice as much so there’s not much difference at the end of the day. Discounts do drive massive sales, but there’s no urgency if the normal price is $4 rather than $8. If it’s five minutes to the end of 50% off happy hour down the pub, then you might be tempted to squeeze in one last drink before it ends. And you may have been inspired to go to that bar in the first place for happy hour.

But if the bar has always been the cheapest place in town… and happy hour is on all day, you’re just going to go whenever you want. And you’ll either drink what you would have done anyway… or you’ll drink somewhere between that and twice as much.

My point is, if you’ve got $100 to spend on videos at $8 each, and you’d normally spend $100 on videos at $8 each… are you going to spend any more than $100 if everything is now $6, or $4, or even $2? It’s unlikely.

Did they though? There’s two way to look at it… what is the average list price now compared to before ADP. And the second, which is far more important as far as I’m concerned (and probably as far as Envato is concerned)… what is the average sale price now compared to before ADP?

Hi SpaceStock … No I have not done any extensive Math, simply because I have no data.

You are true that Envato is going to loose money from author fee, if we down-price the items, but I think they are planning to earn more by attracting more customers for a cheap price, but because of the fixed buyer fee, they are not in as much danger as we are.

The biggest issue is that we authors who has to go through hell to put up a good quality template and get it approved, now have to make available to a very cheap price tag. This demotivating, and might not be viable. It might open up paths to frauds. Best example is Fiverr … which is a pirate den. Of course they have steal to sell it for just 5$, Because you have to minimize the production cost to make it cheap … Best way is to steal something,… so no production cost !

It is great that if we can do a very detailed analysis … which I am sure Envato has done already, because they have all the data, but from what I have seen … every time you go cheap, the life of the workforce go down but you win even with some difficulty.

Anyway … I am getting prepared for the hard time ahead, means I have to work even harder on my other Ideas of business … But as I said … I just hope I am wrong on this !

Hey SapceStockFootage. Your math is wrong. On many levels.

First, I don’t know why you still have 60% commission for authors in all of your examples. There is no such a thing as commission here for years now, and of course with a fixed dollar amount for a buyer fee there is not a fixed percentage either.

It is much more simple than you make it look in your post, so I will put it out very simple for everyone to understand.

  • Envato changes from a fixed percentage to a mix of percentage and fixed dollar amount.
  • Because of this fixed dollar amount, envato’s share (in %) raises with authors lowering their price.
  • Likewise, it would shrink with authors raising their price.

If these three statements cannot be accepted at this point, just imagine a 5 dollar item with a fixed buyer fee of $4. envato’s cut is obviously higher than ever before, because the fixed buyer fee alone makes up 80% of the list price.

If authors lower their prices, but the average money spend on the market stays the same, envato earns more, authors earn less. Simple.

You said:

That is wrong. They earn more. And that is what authors here are talking about.

Just for anyone still in doubt with this fact, I will take your numbers and do the correct math:

Money spent on videohive: $ 10,000,000
List Price of an item: $17
Fixed Buyer Fee: $4
Remaining Item Price = $17-$4 = $13
Envato’s Author Fee Cut (we assume 25% author fee) = 25% of $13 = $3.25

Envato is earning per Item: $7.25
Author is earning per item: $9.75

Envato’s percentage share of the $17 item: $7.25 / $17 = 42.65% (rounded)
Envato’s share of $10,000,000 = 0,4265 * $10,000,000 = $4,265,000
Envato’s winning because of ADP = $4,265,000 - $4,000,000 = $265,000

We see, Envato is earning more. (Obviously because their percentage share is going up).

I think a lot of authors have done the math and they do not come up with things as they go along. However, this statement of yours:

Is literally just made up along the way as it is clear to see that if envato’s percentage share is raising (as it happens with lower prices), they make a win, not a loss. This statement is not backed by a calculation as well, that may be the reason why you have come to this wrong conclusion.

I see you are a moderator here and a very respected member, so I would be really happy to see you correct this wrong statement in your post to not spread more false information about this than there already is.

Thank you.

PS:

I do come to another result than you in another calculation in your post as well. Your result is not even in the favor of the point you are trying to make, so I’m not accusing you of any bad intentions, I just think you’ve done the wrong math. So just to clarify:

The last two lines are wrong.

The average commission of 60% is of course wrong here, as we got a fixed buyer fee. The 25% author’s fee is the one percentage that is important. Let’s calculate what envato is earning of a 19 dollar item:

Fixed buyer fee = $4
remaining item price = $19 - $4 = $15
Envato’s author Fee cut: 25% of $15 = $3.75
Envato’s total earnings of the $19 item = $4 + $3.75 = $7.75
Envato’s percentage of the $19 item = $7.75 / $19 = 40.79% (rounded)

Envato’s share of $10,000,000 = 40.79% * $10,000,000 = $4,079,000

They do actually earn just a tad bit more due to the slight buyers fee increase due to rounding to whole dollar amounts. On other marketplaces they have lowered their buyers fee in some categories actually so I would say they have been pretty much fair with this.

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Yeah, I know there’s no commissions any more. That’s the whole reason I put the 25% authors fee in the brackets, and mentioned how the fixed buyers fee covers them somewhat. Everyone knows (or should know) about list prices, items prices and the associated fees… I purely mentioned the 60% as most people still refer to it as that for ease of calculation.

However, all of the calculations I’ve done in my examples take into account a 20% buyers fee (before ADP) and a fixed buyers fee (after ADP)… plus a authors fee of 25% (from a variable rate between 12.5% and 50%).

The whole reason I even replied was because a lot of people are incorrectly stating that it doesn’t matter whether people lower their prices or not, as Envato will still earn the same… which is incorrect.

I figured it would be something along those lines, I just think it is misleading when it is written inside your calculations.

As I have shown in my post, your calculations, and especially your statement of envato making a loss when the same dollar amount is spent, were wrong.

You are correct, envato is not earning the same overall. However, percentage wise, they earn more when authors lower their price, and less when authors raise their prices.

The assumption that the amount of money spent on the marketplaces stay the same if the prices are lowered is reasonable, in my opinion. And in that case, authors are earning less while envato earns more, and that is what people here are trying to say, I think.

Of course, the author fee share does shrink with the list price, but as the buyer fee is fixed, they do raise their overall percentage cut and that is in my opinion what people are refferring to when they state something like “envato got their share covered”.

If lower prices would mean lower amounts of money spent, then this would mean less money for envato. Just another reason why it is safe to assume that lower prices mean same money spent on more sales, right? Envato wouldn’t do anything that gives them a loss, that were your words, right?

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Is there any update about when exactly we can expect ADP to be enabled?

Will we be told the exact date the changes will occur beforehand so that we can prepare for the change or will it be something like “Hey guys as of this morning ADP is in effect.” ?

Thanks

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Yeah… could we actually have some update? The change is pretty important. We need to know

But what if they decided to abandon ADP?

Never mind, just it seemed for a second. :slight_smile:

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