Why is Photobucket holding the internet to ransom?

It must have been a slow day at the office when they came up with this genius idea.

“I know, let’s completely change our terms of service and stop anyone from posting their pictures anywhere else on the internet unless they pay us $399 a year”. Brilliant!

Quite how this got past anyone with any commercial sense is beyond me but then the execution of this stupid policy has been breathtakingly bad.

Photobucket P500 errorOver the past five days, people have been waking up to find images that were previously showing on blogs, bulletin boards, auction sites and so on, had disappeared to be replaced with the Photobucket ‘P500’ error image.

One of the biggest issues, however, was that it came out of the blue. No one knew about it. There were no announcements, no emails warning people that it was about to happen and more importantly, no explanation.

Given that their mission statement appears to be “Your photos are our number one priority. It’s our mission to help you share, store, edit and enjoy them — all in one place” it’s a very strange move.

Naturally, the internet is up in arms about it; just search Facebook, Twitter or Reddit to see for yourself. Bulletin boards across the globe are being crippled as previously vibrant threads with detailed images are disappearing. People who have used Photobucket for hosting these images successfully for over ten years are finding that they will have to literally start again with what for some, amounts to a lifetime’s work.

Taking a step back and looking at it from a commercial point of view, there must have been a growing imperative to step away from a model primarily reliant on advertising. With a growth in customer numbers and an increase in bandwidth usage, their cost base must have been spiralling. It’s a by-product of their success.

The solution however surely was not what they have come up with?

Firstly, why make the change with no notice? Why simply change overnight and then dump on your customers?

Secondly, how on earth did they arrive at their pricing point? When so many people use their service specifically for third party hosting and nothing else, why provide this service only at the highest price point you have?

Finally, unless they have deliberately set out to rid themselves forever of customers using ‘free’ accounts then how will they survive the fall out from this?

One commentator on Reddit summed the problem up nicely;

“you cant even begin to imagine what this will mean to internet forums and blogs. older internet users remember what a dumpster fire the internet was when angelfire, geocities, and tripod stopped offering free hosting, broken links everywhere and it was the exact same cause, they started out to give everyone free hosting, but they reached critical mass as more people signed up for the free than the paid.”

The backlash from this decision has only just started but the fallout will be significant. Many people have already closed their accounts and more are planning to do so. When there are so many other alternatives out there it seems that Photobucket are relying on inertia from their customer base to survive.

I doubt they will be allowed to.

From a Marketing Communications point of view, this is rapidly descending into a case study on how not to do it.

Not only did they dump this on their users with zero notice but they are compounding the issue with their communications, or lack of them.

Five days on from the start of this process their Facebook and Twitter ‘Customer Services’ teams are blithely carrying on as if nothing has happened and people are being ignored or stuck into pre-defined responses. People complaining on the Photobucket forum are being asked to email them, at which point they get a ‘canned’ email which amounts to nothing more than FAQ’s. None of which answers any of the questions their customers have.

And to put a tin lid on it when, as a customer, you do get an email warning you that you need to upgrade to continue to use 3rd Party hosting, it comes from an email account called special@special.pbdeals.com. Trust me, there’s nothing special about this deal.

Even the email they sent is designed to look like a warning.

Photobucket P500 3rd Party Hosting emaill

This is nothing short of a P.R disaster and will leave a very bad taste in the mouth for many people. Given that Photobucket was set up as a photo storage and sharing website, removing the sharing option unless you pay $399 seems bizarre. People are feeling that they are being held to ransom.

Which led to this comment on Twitter which seems to sum up the mood of their customers.

Photobucket P500 on twitter

It will be interesting to chart this story as it unfolds but unless Photobucket rethinks this policy then I doubt it will have a happy ending.