💡 Move to the subscription model for Themeforest.

Hi everyone. As you may have noticed Themeforest market is really saturated these days, it is good news for customers as a result of competition is a significant increase in the variety and quality of items. But there is also a backside for authors, they need to spend more time and resources on development and marketing & support but incomes mostly do not grow but fall. And a lot of top authors left the Themeforest market, and move to more profitable platforms where the price of a theme costs $200-350 or change a sphere of business, you can easily find such examples. This is a lose-win situation for authors/customers and neutral for Themeforest, but the trend is not good for all 3 parties.

But fortunately, no need to reinvent the wheel — the answer is a subscription model for Themeforest. Maybe you remember the old days when you could purchase Adobe Photoshop for a one-time payment but since 2013 it is available only with a subscription. Like pretty much every soft in our day, this model works and gives resources and motivation for authors to improve and update new versions. In the themes market, we also can notice such a tendency. Some examples of the subscription model of famous players of the themes market:

You may say about the Envato Elements, but it does not work for Themes. It is not the photos on photo stock. Support and updates are an important part of the themes business and you can’t motivate good authors to do that for a couple of dollars.

The most interesting part. Let’s look at the numbers.
For example, now you sell the themes for $59 and have 1000 sales a year. You will get $41.13 from each sale and $41130 yearly. Envato will get $17870.

And what we would have with a subscription (billed annually) in the next year.
Let’s imagine that we have the same number of 1000 new sales, the churn rate was 30% and we have 700 customers from the previous year: $41130 + $28791 = $69921. Envato will get $30379. I think you get the idea, it is a huge increase in earnings for authors and Envato.

But what about customers? Yes, they will pay more, but in fact, it is $4,9 per month for top themes which quality you can’t find on platforms like Wix or Squarespace (and if you add a domain and hosting, Wix and Squarespace are still much more expensive).

As a result, we have a win-win situation for authors/customers and Envato. Authors increase earnings and motivation, customers get better quality, more motivated authors for still a great price and Envato gets more income and resources for competition with other marketplaces and products.

What do you think? Is 2023 the time to move to subscription model?

:wave: Write +1 if you agree.

2 Likes

+1

Anyway, Envato will ignore it like they do in most cases. Marketplace does not develop in any way and does not react to what is currently happening on the global market.

1 Like

Elements IS the subscription model.

Thanks for support :+1:

A long time ago when TemplateMonster was the first and only marketplace for themes on the market, they created themes in-house because didn’t want to share the profit. As I know Collis was one of their small partners but he understood that authors and their motivation are key to quality and success. And he created his own marketplace, open for independent authors. Other is history, Themeforest chooses the right economic model and outruns TemplateMonster 10x. TemplateMonster later also opened a marketplace for authors but it was late because a huge part of the market was taken by TF.

I think it is possible that someone from the TF will show it to the top management or Collis and the option will be on the table because it is not less important for a company than for authors.

Anyway as authors, we need to push it. For example in the Community Health survey.

In the post I explained why Elements is not an option for themes.

+1

It is smart to move to a subscription model as explained in the post. I wonder why it wasn’t done earlier. We will suggest it in the Community Health survey.

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This would be a complete disaster for the marketplace and you authors as well, everybody will leave Envato, all good products or at least 80% will be sold in another place.

99% of authors here do not like Elements at all me included but we can’t do anything about it!

Developing a theme a keeping it up to date takes a lot of time.

As a client you will probably want support and me as an author will not be able to provide it since it is not included in this type of subscription, and now you will say ok but add support as well, this will not work, I will get 2$ for the rest…

If this will happen the marketplace will become a joke… but I don’t think this will happen good themes takes a lot of time to build and no author in the right mind will accept a subscription model.

If you don’t know how this works for an author, Envato takes 50%, and the author takes a small fraction because of the way this system work, it is impossible to survive.

It will never work with a theme or code-based subscription, it is impossible for the author to survive and you will not get the stuff that you expect.

I now for a buyer this is haven but you can’t buy a new BMW with 20$… you have to pay the right price.

Did you read the text carefully? I write that Elements wouldn’t work for themes. The idea is to sell a $59 theme with an annual subscription.

Ah…

SOrry foggy brain that would work.

1 Like

+1

Is there an example of another marketplace that uses envato’s model where they don’t own/develop items, but which also has the subscription model?

This has been discussed previously and there is are challenges e.g.

  • Because envato do not own or create items is the reason why currently terms and conditions state that there is no guarantee of item lifespan

  • If a buyer purchases a one year subscription then there is an obligation for support and updates to be available for that period.

  • If for any reason the author does not provide this then envato are going to face potentially constant refunding and chaos.

I’d be really interested to see another marketplace that makes a combination of this model and annual subscriptions work

The argument is straightforward:

When a client purchases an item, they can download and use the item normally. If they desire to receive updates and new features after a specific amount of time (for example one year), they must pay for an additional year of updates. This means that clients who wish to receive updates are effectively paying the author for another year of work. On the other hand, if they do not require updates, they may simply continue using the latest version they have.

As an illustration of this logic, consider the item support offered on Envato Market. If a client desires to extend their item support, they may renew it. If not, they won’t. Nobody works for free indefinitely (FYI before 2015, support on Envato Market was offered indefinitely, but this mistake was changed to a six-month period to better align with industry standards and pay authors corresponding to their work time).

It is also worth noting that this business model is the most common in the software industry.

BTW currently the promesses of Envato marketplace are more chaotic as it’s promising “forever” updates (there are literally clients who purchased items 5 years ago for $15 and ask for new updates and features). The purpose of this discussion is to manage the buyers expectations, and to make it clear that Authors are obligated to provide updates for one year (this is less obligation for Authors and Envato and not more as you are mentioning).

Could you share another marketplace, ideally for themes? I know there are several sites that sell 3rd-party-author items under subscription, but not ones which offer support or updates within that.

I do understand the model suggested but this is exactly where the problem is.

  • For the subscription to work, support and updates need to be provided

  • Currently envato are clear that there is no guarantee of item shelf-life, updates etc. because they do not own items or have legal right to enforce it.

If the model suggested existed and a buyer subscribes for a year then what happens if an author just stopped providing support and/or updates during that period?

Envato cannot force authors to uphold updates etc. At the same time they cannot have buyers paying for a year’s support/updates and then that not materialise?

There are items which sell thousands of copies every year. If an author stopped providing the basis and value of having a subscription, envato could face having to refund all of those buyers, creating chaos and huge costs.

Again, I understand the suggested model and I am not suggesting that how things work now is perfect or that anyone should work for free. It’s simply that for envato it may not be that straight forward.

If there was a profitable solution to make things better then envato would have considered or implemented it. Please do share examples as mentioned above so we can see how they provide it.

Yes.

For example Shopify App Store https://apps.shopify.com. Same situation, the marketplace takes a commission but doesn’t own apps, independent developers with 8000+ apps in the store with their own support and updates, and any type of subscription you can imagine: monthly, annual, fixed price. Developers can choose any type of plan they want and it works.

Apologies I missed this reply - is that the same as Envato? For example:

  • With elements the subscription/payment is direct with envato

  • With Shopify app store and similar, is the subscription/payment you get not direct with the author/developer of the app?

Not to say things could not be changed to accommodate it, but that’s still a different marketplace model which altering may have wide business implications.

Is that the same as Envato?

The same, I am on Themeforest for 8 years and 1 year on Shopidy app store.

  • Yes, subscription/payment is direct with marketplace.
  • You pay for marketplace first, and then authors get their earnings (same as on Themeforest)

Not to say things could not be changed to accommodate it, but that’s still a different marketplace model which altering may have wide business implications.

A long time ago when TemplateMonster was the first and only marketplace for themes on the market, they created themes in-house because didn’t want to share the profit. As I know Collis was one of their small partners but he understood that authors and their motivation are key to quality and success. And he created his own marketplace, open for independent authors. Other is history, Themeforest chooses the right economic model and outruns TemplateMonster 10x. TemplateMonster later also opened a marketplace for authors but it was late because a huge part of the market was taken by TF.