Flickr Should Copy DeviantART Not YouTube

When I heard that Flickr is nearly ready to add video capabilities, I felt a bit queasy. Flickr is the leader in the photo sharing arena by a large margin. The main reason it reached critical mass was because of the community it built around the photos uploaded by users. It is also one of the harder sites to monetize since display advertising clashes with photo viewing and there isn’t enough text content for contextual advertising to work. The $24.95 Pro memberships (which can be given as gifts *wink wink*) keep Flickr from being a total money-sink.

Flickr Bleeds Money

Photos require a large chunk of bandwidth to serve up to the millions of Flickr users, but that is nothing compared to the overhead of video. This is probably a moot point considering the company is running off the pipes of it’s owner, web pioneer Yahoo.

While there are good and bad reasons for Flickr to add video, I don’t think they can compete in such a crowded video-sharing marketplace. Did Vimeo, Viddler, Revver, Daily Motion,, Veoh, and the all mighty YouTube leave anything for Flickr to improve upon? It looks like Flickr will have a long, uphill battle to even catch up to the middle of the pack.

Flickr has a huge community around photos and what they need to do is offer more photo related services. Many artists on Flickr have an account at 3rd party sites for selling prints of their work. Flickr could offer fine-art prints from members that opt-in to sell their photos with the service. This way Flickr would tie the browsing and buying experience together and could make a small profit off of each transaction. An example of another art site doing something similar is (see my prints.).

DeviantART lets users upload as many photos as they want with no file size limitations, just like Flickr. Every member is eligible to opt-in to the standard print account which allows them to sell their art work and receive a cut of the profits. A Premium print account is available for $24.95 a year and offers more print customizations and a higher share of the profits from a sale. These are not run-of-the-mill snapshot prints like at Walmart or Costco. DeviantART does high quality work. The beauty of this is DeviantART can set a base price which includes a tiny profit with every transaction as well as helping out it’s communities. When community members profit, the company profits as well.

DeviantART’s Print Management

Flickr needs something like this! How could such a megasite sit back and watch it’s users point potential customers off to make a purchase? This is money that they are letting go by under their noses. And what do they plan to do with video anyways? Nobody has figured out a successful way to monetize video.

Flickr already has an intuitive interface for uploading, tagging, and browsing photos, why can’t they add selling photos to that list? I feel offering a way for the community to profit off their work while helping Flickr earn it’s keep makes everyone happy. This is way better than adding the latest me-too feature that is already pervasive throughout the web.

eBay Updates Fees With Mixed Results

Old-fashioned auction dynamo, eBay, sent an e-mail to it’s members today detailing changes in their fee structure. Starting February 20th the fees to initially list an item regardless if it sells or not will be reduced.

Starting or Reserve Price Current Insertion Fee Insertion Fee (effective 02/20/2008)
$0.01 – $0.99 $0.20 $0.15 Lower fee!
$1.00 – $9.99 $0.40 $0.35 Lower fee!
$10.00 – $24.99 $0.60 $0.55 Lower fee!
$25.00 – $49.99 $1.20 $1.00 Lower fee!
$50.00 – $199.99 $2.40 $2.00 Lower fee!
$200.00 – $499.99 $3.60 $3.00 Lower fee!
$500.00 or more $4.80 $4.00 Lower fee!

As an added bonus the $0.35 gallery fee has now been dropped meaning eBay will include a picture of every item in the search results. The price cuts up front came with an increase of the final value fees assessed at the end of successful auctions.

Closing Price Final Value Fee Final Value Fee (effective 02/20/2008)
Item not sold No fee No change
$0.01-$25.00 5.25% of the closing value 8.75% of the closing value
$25.01 – $1,000.00 5.25% of the initial $25.00, plus 3.25% of the remaining closing value balance ($25.01 to $1,000.00) 8.75% of the initial $25.00, plus 3.50% of the remaining closing value balance ($25.01 to $1,000.00)
Over $1,000.01 5.25% of the initial $25.00, plus 3.25% of the initial $25.00 – $1,000.00 plus 1.50% of the remaining closing value balance ($1,000.01 – closing value) 8.75% of the initial $25.00, plus 3.50% of the initial $25.00 – $1,000.00 plus 1.50% of the remaining closing value balance ($1,000.01 – closing value)

To put this final value increase into perspective here is a sample of fees for a range of final auction prices.

Final Value Old Fee New Fee Difference
$4.99 $0.26 $0.44 $0.18
$9.99 $0.52 $0.87 $0.35
$19.99 $1.05 $1.75 $0.70
$49.99 $2.12 $3.06 $0.94
$99.99 $3.75 $4.81 $1.06
$199.99 $7.00 $8.31 $1.31
$499.99 $16.75 $18.81 $2.06
$999.99 $33.00 $36.31 $3.31

All calculations were done at which allows you to change fee values.

Auctions that sell for under a dollar benefit the most with these latest changes as the lower insertion fee plus the free gallery upgrade outweigh the increased final value fee. Sellers who do a high volume of business will be hit hard as more of their earnings will come out of the already slim margins and go toward more fees.

eBay has been on the decline for the past couple of years. They are already the dominant auction site with a virtual monopoly on the industry. Computers have been getting more efficient as technology advances but apparently eBay can’t lower its costs fast enough. And let’s not mention that billion dollar Skype purchase which has done absolutely nothing to eBay’s auction business.

eBay has become a victim of it’s own success. In the beginning people went to eBay to find rare collectibles or heavily discounted items. Some even considered eBay to have the perfect business model as a middle-man connecting buyers to sellers with no inventory to keep on it’s own. Now eBay is littered with suspicious listings, outrageously high shipping prices, and generally more distractions to wade through in search of the desired item. The selling process is a laborious one requiring lots of time to specify all of the necessary options to help auctions stand out from the crowd. What eBay needs to do is simplify everything as much as possible starting with the listing process. They also need to focus on helping it’s biggest asset: the buyers and sellers. Buyers want a safe, friendly environment to do business in and sellers want the least amount of obstacles to selling their goods. More fees result in less incentive for sellers to consider eBay which results in a less lucrative market for buyers to enter. eBay should take a page from the Amazon Marketplace which provides a much better experience for both buyers and sellers.

That improved experience is why when I need to sell something to a stranger I turn to the efficient book dealer rather than the decrepit auctioneer.