Extended licenses required for paid service websites

Envato Customers Web and Code
1

We’ve been waiting for a template (for a certain type of service) to arrive on Themeforest for years, and suddenly two have arrived at once. I’m not going to ‘call out’ the service type, but they’re both good templates and aside from a few tweaks would work perfectly for the website we have in mind.

Only problem is, after checking the license T&C’s, both would require an Extended License as the finished sites would charge end users. One template doesn’t even have the Extended License option available (despite having a built in payments system), and the other lists it as around $2500.

I couldn’t see us making more than $1000 per year from a site using this template, and when you add on the time spent setting up and customising the template, branding, hosting costs, time spent promoting and marketing the site, site management and updates, plus time spent attracting members, we’d be lucky to get our money back within 5 years.

Do authors set the Extended License cost or is this set by Envato? If so maybe we can persuade the author to lower the price as it’s about ten times more expensive than the equivalent non-Wordpress solutions available. If not, and it’s set by Envato then maybe this needs to be looked at as it’s going to be way too expensive for most small site owners and others have queried the costs in the theme’s comments sections. Maybe there should be a separate license for paid services?

I’m not in any way trying to undervalue the work that has gone into these themes, they’re both great and if that’s the cost for the license then fair enough, but it won’t work for us as for this price we wouldn’t get a return on our investment. Which is a shame as they’re great themes but the cost is going to put off a lot of customers.

2

it’s a standard multiplier set by Envato… author can only opt in or out.

3

@familychoice, you can just try custom freelance work to complete the same project. Understandably rare case utilizations can be done better through custom works within budget.

4

I can’t imagine taking the time to build, market and maintain a website service that is going to earn $1,000 a year. Let’s say you value your time at $50/hour. If you spend more than 20 hours a year working on that site you’ve already got a loss. Even if it makes ten times that but you’re saying it could profit $1,000 a year, why bother? If the slightest thing goes wrong with the site and you have to put in a full day to fix, update or maintain it you’ve blown your budget for the year.

5

Thanks for the replies :slight_smile:

MSFX said

it’s a standard multiplier set by Envato… author can only opt in or out.

Ah right. I think they need another license type then as I don’t need multiple licenses, just one to start with.

VF said

@familychoice, you can just try custom freelance work to complete the same project. Understandably rare case utilizations can be done better through custom works within budget.

We have developers available here, and I could probably knock something up myself, but it probably wouldn’t be worth the time/cost for the return we’d get. That’s why themes with extra functionality built in are sometimes cost effective options. You don’t see it very often on here, but some other theme suppliers provide (almost) turnkey themes.

Saying that I think if there isn’t an option to purchase these themes at a lower price I may have a go at putting something similar together myself using plugins, just to see if it can be done for less than $2500.

Parallelus said

I can’t imagine taking the time to build, market and maintain a website service that is going to earn $1,000 a year. Let’s say you value your time at $50/hour. If you spend more than 20 hours a year working on that site you’ve already got a loss. Even if it makes ten times that but you’re saying it could profit $1,000 a year, why bother? If the slightest thing goes wrong with the site and you have to put in a full day to fix, update or maintain it you’ve blown your budget for the year.

We don’t make that hourly rate here, but I understand your point. If the theme was say, $60 or a $100 then we could put out a site and potentially make a small profit. If it works out then we can buy another license and put out a second site quicker and make a better return.

For some online services this works well, and we might put out say, 40 sites of a similar nature and make a good return from them collectively. With the type of service these themes cover though this wouldn’t be possible, and I doubt we’d publish more than a couple of sites. The market is already flooded with established competition for this type of service so attracting members would be very time consuming. It’s a service type we wanted to test out and it may make more than $1000 per year, but $2500 plus other costs is too much to risk on a punt.

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familychoice said

Thanks for the replies :slight_smile:

MSFX said

it’s a standard multiplier set by Envato… author can only opt in or out.

Ah right. I think they need another license type then as I don’t need multiple licenses, just one to start with.

you misunderstood. The extended license cost is proportionate to the theme, it’s a multiplier of 50 or something…

7

Huh?? so you are saying if we buy a theme and start making money from the site we owe the author a cut? or need an extended lic.?? that makes no sense. If you buy 1 theme and use it on 1 site, what does the amount of revenue have to do with anyone else??

sorry if I’m missing the point here but …I’m lost

8

It’s when multiple users pay to use a site you need that license. For example you buy a theme for a single client I.e. one use that’s all good on a normal license but if multiple people are paying to join, download, benefit etc then technically that’s multiple clients so you need an extended license

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CanCars said

Huh?? so you are saying if we buy a theme and start making money from the site we owe the author a cut? or need an extended lic.?? that makes no sense. If you buy 1 theme and use it on 1 site, what does the amount of revenue have to do with anyone else??

sorry if I’m missing the point here but …I’m lost

As far as i understand that licence stuff, please correct me if i am wrong here, is that its not about if you make money from the site, its about how.

For example, if you make a lot of money from ad revenue, thats no problem at all, the regular licence is enough.
But if you make money from direct payment of your visitors, think a dating site with a monthly fee for example, you need the extended licence.
This only applies if you charge people for using your page, so online shops for example who charge for products, not the usage itself, are fine with a regular licence as well.

Like i said, please correct me if this is wrong, its how i understood it, but i am not sure myself.

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MSFX said

you misunderstood. The extended license cost is proportionate to the theme, it’s a multiplier of 50 or something…

ok thanks for the clarification, but that seems a bit steep. It means that you only need a single, standard license to buy a theme that promotes a service, such as a web design company, that could potentially make a lot of money from inquiries as a direct result of the theme. Whereas you need a multiple 50x extended license if your site sells membership subscriptions, even though you still may be using only a single copy, and making much less money from it than a standard business site.

squaredWeb said

For example, if you make a lot of money from ad revenue, thats no problem at all, the regular licence is enough.
But if you make money from direct payment of your visitors, think a dating site with a monthly fee for example, you need the extended licence. This only applies if you charge people for using your page, so online shops for example who charge for products, not the usage itself, are fine with a regular licence as well.

That seems to be the case, but I think it’s bizarre to charge a site using a theme to sell subscriptions 50x more than a business website promoting services, or a shopping cart site potentially selling thousands of products every year.

charlie4282 said

It’s when multiple users pay to use a site you need that license. For example you buy a theme for a single client I.e. one use that’s all good on a normal license but if multiple people are paying to join, download, benefit etc then technically that’s multiple clients so you need an extended license

But wouldn’t that also be the case for shopping cart sites? They also feature member accounts, can provide downloads etc. They’re both member based websites selling services/products from a single domain/website.

What happens if I buy a basic, business theme with a Standard License, but then use a plugin such as Gravity Forms to sell subscriptions for members-only content? Gravity Forms don’t impose an extra cost for this, but would this then mean the theme I purchased now requires an Extended License?

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But wouldn't that also be the case for shopping cart sites? They also feature member accounts, can provide downloads etc. They're both member based websites selling services/products from a single domain/website.

Very true - I think (and could be mistaken) that envato policy dictates the theory I put earlier about multiple clients and multiple access etc AND that it is somewhere defined about the product type and type of theme e.g. making exceptions for commerce shops as supposed to direct downloads or other that style of site (can;t think of a title to bucket them) but I get what you mean about it technically all being selling stuff. Maybe flag it for a staff reply

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charlie4282 said

Very true - I think (and could be mistaken) that envato policy dictates the theory I put earlier about multiple clients and multiple access etc AND that it is somewhere defined about the product type and type of theme e.g. making exceptions for commerce shops as supposed to direct downloads or other that style of site (can;t think of a title to bucket them) but I get what you mean about it technically all being selling stuff. Maybe flag it for a staff reply

Yeah I think I’ll do that - it’s all a bit wooly. I can’t see why you should have to pay fifty times more to sell a monthly subscription than you would pay to sell, for example, a car.

13

It’s obvious that we need more license types. Regular and Extended are not enough at all.

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codenegar said

It’s obvious that we need more license types. Regular and Extended are not enough at all.

Yes, the 50x multiplier applied for completely 2 different usage cases is absurd. One usage case is related to distribution while another one just deals about paid subscription - even if the 50x price justifies both usage cases, the suspection is inevitable. A typical buyer may wonder how exactly 50x fits for 2 usage cases and why not 40x and 50x. Indicates a lot about lazy “one license fits for all” attitude. Actually this approach is more risky than having separate license for each usage case.

There is no harm in showing various license types on the purchase button area. Currently the button area is kept simple but usage and understanding left to stay complex. Fragmentation of license is better than leaving users confused and answer their questions individually through support.

Joke time: @familychoice, as long as you keep the same avatar, there is less chance for staffs hearing your voice as buyer! :smiley:

15

@familychoice

It seems most of the confusion is due to the various other items across separate marketplaces within Envato. i.e. Photodune, Graphicriver etc. where the same licenses apply.

Even if you put up a website built around a theme/plugin/script element, just because people are visiting your website does not mean that you are making available the theme to end users to download and use. The usage of these items, requires the end user to be provided the package you purchased and then your end users installing this on their servers. Merrily interacting with your website does not constitute usage.

On a website, you visit it for a specific purpose, you pay for a specific service where service is not for end users to see the theme/plugin/script element you purchased.

The way I understand the licensing, reasons for an extended license on Themeforest and Codecanyon are if you are developing a product, that does not conflict with the item purchased, so it needs to be a larger product that does something not related to what you purchased that you are later reselling.

For instance, if you purchased a theme then your end product for sale cannot be a theme but it could be a Customer Relationship Management application, a Content Management System, an Enterprise Resource Planner and so forth.

If you purchased a mega menu script, then your end product shouldn’t be another navigational system such as a WordPress plugin of the same or yet another slightly enhanced navigational system. The end product has to be a larger piece of work, like a theme or a web application that you are later selling. In these cases the extended license is useful.

Bottom line, get the extended licenses if you want to integrate the purchased item in a larger product you will be selling. For all other purposes the regular license has you covered.

This is also why the extended license is expensive and sells very little because it covers a very niche use case where the item you purchased adds value to a product you own, wherein you are profiting repeatedly by having payed a one time fixed fee for the smaller work that makes up your product.

IANAL by the way so contact support for a better understanding.

16
Typps said

Bottom line, get the extended licenses if you want to integrate the purchased item in a larger product you will be selling. For all other purposes the regular license has you covered.

This is also why the extended license is expensive and sells very little because it covers a very niche use case where the item you purchased adds value to a product you own, wherein you are profiting repeatedly by having payed a one time fixed fee for the smaller work that makes up your product.

I see your point - if the website itself is providing a service to members, e.g a dating site or job board, then customers would be interacting with the site differently than they would with a standard shopping cart website i.e. access to the website itself would be the product, rather than a separate product itself.

It’s still bit of a grey area though - with shopping carts providing member accounts, wishlists, downloads, comparison features, sharing/recommendation options, vouchers, subscriptions (e.g. magazines), reviews etc. there’s a lot more ‘customer interaction’ than just popping on and quickly buying something.

I still don’t see why a dating website, for example, should cost 50x more. There really needs to be another license option for this as it’s not an affordable purchase for many site owners.

VF said

Joke time: @familychoice, as long as you keep the same avatar, there is less chance for staffs hearing your voice as buyer! :smiley:

I’ve just had my hair done, so I’ll be replacing that shortly…

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familychoice said

I see your point - if the website itself is providing a service to members, e.g a dating site or job board, then customers would be interacting with the site differently than they would with a standard shopping cart website i.e. access to the website itself would be the product, rather than a separate product itself.

It’s still bit of a grey area though - with shopping carts providing member accounts, wishlists, downloads, comparison features, sharing/recommendation options, vouchers, subscriptions (e.g. magazines), reviews etc. there’s a lot more ‘customer interaction’ than just popping on and quickly buying something.

I still don’t see why a dating website, for example, should cost 50x more. There really needs to be another license option for this as it’s not an affordable purchase for many site owners.

I’m not sure why you think a script that provides dating/job seeking/shopping cart functionality etc, cannot be used to create a website where you are charging your users for a service.

The product you purchased, i.e. the script enables a specific functionality. People visiting your site do not get the same benefits you acquired when you purchased the item. Your purchase allows you to create a website and make this available to the public. This is not what your enabling your visitors to do.

You are simply selling a service. The end users do not get to be able to create their own dating or job seeking website because they visited your site. Hence a regular license should be just fine unless you want to create a product that you want to later sell.

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Typps said

I’m not sure why you think a script that provides dating/job seeking/shopping cart functionality etc, cannot be used to create a website where you are charging your users for a service.

Erm…did I say that?

Typps said

You are simply selling a service. The end users do not get to be able to create their own dating or job seeking website because they visited your site. Hence a regular license should be just fine unless you want to create a product that you want to later sell.

That’s not the case, which is why I started this thread. Envato state:

“Regular License Use, by you or one client, in a single end product which end users are not charged for”

So, for example a dating website theme would have subscription payment functionality built in that restricts content for paid users only. Therefore the website content is the end product, and users are charged to view and interact with it. The author of one of the themes I’m intersted in has confirmed an Extended license for $2500 would be required if payment was taken.

If Envato say this is wrong though then that’s great, I can buy the theme for a standard license price.

19

@Typps, this thread is not about a plugin or script, its about a whole website theme from themeforest, so while what you said makes kinda sense for codecanyon, i dont think its correct for themeforest.

20

WOW! so you are saying that anyone who builds a website with a theme from here, then charges people to join that site needs an extended lic?

Someone needs to make this clear, not all customers that come here (including myself) are in the biz of doing sites for clients… I’m just another shmuck that thought he could get rich quick with niche websites…fortunatly I’m over that now :D… but impulse buys led to a folder full of themes from here which I have no use for.
Seems to me, peeps are better off sticking with standard wordpress theme and learning a bit of css, rather than be put a legal mess over design and who really owns it, potentially ruining your site.

Hopefully I didnt offend anyone with my jibber, as I do have respect for authors here, but these terms need to be more publicly visible and better explained.