The actual org is small, but it's caused thousands to pull their license fee, which is no small sum of money for the Beeb. It's not like they're rolling in profit.
I think this was the original plan, but they dropped the membership fee and have since raised several hundreds of millions to continue operating. Hence all of the head scratching about their financial prospects.
In other words: Because they think they can get 500% the revenue by abusing their users even more, they're unwilling to accept the 450% revenue they could get by making a reasonable compromise.
And now they're running the risk of getting 5% the revenue.
* No actual numbers were harmed in the making of this post.
OT but their aggressive pursuing of revenue gets my back up. They have cash assets somewhere in the region of £1b and yet they continue to squeeze every last drop out of those visiting the properties they were gifted to look after on behalf of the nation.
They have recently installed ticket machines at a isolated beach car park near me, the car park and beach has no facilities, not even a dog poo bin!
I let my membership lapse several years ago and have no intention of renewing it.
How do they not address the actual financials? (saying "Numbers aside" and then digging into the strategy shift).
I'm more curious - out of the $200mm they are projecting this year, or the $100mm they made last year - what did they spend? Their business model seems even more insane than Groupons to me.
They apparently have to pay out $12-15 per class to the studios. Had heard that on a $99 membership, with about $50 going to normal expenses (staff, marketing, etc), if a member takes 4 classes in a month they're already underwater - and they'll lose money on every additional class that user takes.
It'd be nice to hear their version of this before I bother to get my butt off the couch and pick my pitchfork. The fact that fee increases weren't communicated because the OP was't subed to promo emails just doesn't smell right. As is the fact that it wasn't obvious from the actual billing statements.
Ps. I remember their CEO (David Barrett) back from the p2p-hackers mailing list days. He ain't one of them Zuckerbergs. The exact opposite in fact.
This is fair, but paying for their expenses this way is not the way to do it. It's going to kill them in the end, and at best, is going to produce at best, some short term profit while it's community bleeds away. I seriously think if they jusut said, 'Hey, we have bills to pay. Would you be willing to donate?', they might have seen some success. But that is now not a solution, since they basically burned all their goodwill in one fell swoop with this model.
With currently only 3400 paying users it's only 80K pr. year of revenues (and the profits are probably much lower). It's still far from a good business and this kind of money does not have any kind of guarantees.
Their problem is also that "all time peak revenue" is not enough to cover even just the server costs, let alone salaries. They're bleeding 30 million USD per year with no path to profitability ever.
Even though they aren't making money customers did pay to use the service. You can't just change the terms after you get the money - they've just defaulted on their obligations.
The officers are opening themselves up to liability issues by continuing to run a known insolvent business and losing more investor money.
I'm guessing they're NOT unbundling their charges. They're just pocketing a massive fee increase levied on all the patrons of multiple creators by making it per pledge.
I guess they're keeping the subscription fees for those who subscribed, not sure what percent of their revenue that would have been. All in all the total sales are probably paltry relative to the investment they've made in it (though surely they'll find other uses for the servers and tech), so it's not a big sacrifice to give that back to avoid anger and lawsuits
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