High product usage rates combined with high switching costs equal pricing power. Google Photos – the popular photo & video management platform for Android and iOS – has pricing power to spare.
Google ran the playbook perfectly. Years ago Google promised users of its Photos service that the service would remain free for life so long as users capped the resolution at which they stored their photos. Well, Google recently changed it’s tune to where regardless of photo resolution, users of the service will have new photos and videos count against Google’s 15GB free storage limit beginning June 1st 2021. Once users cross the 15GB storage threshold, they will be charged $1.99 per month for a 100GB Google One storage plan (more on Google One pricing below). At present, Google Photos stores approximately 28 billion new photos and videos each week and 4 trillion photos in total.
- Google has more than 1 billion Photos users.
- The company estimates that approximately 7% of Photos users will cross the revenue threshold in June 2021.
- Thus, an estimate for incremental revenue to Google as of June 2021 is $140 million per month or $1.7 billion per year (7% x 1 billion users x $2 per month).
- The one caveat is that Google Pixel owners will be able to continue to upload “high” quality (not “original” quality) photos to Photos for free after the June 1st 2021 deadline.
View an estimate of when you may eclipse your Google Photos free storage limit HERE
Google One. Google One pricing is unchanged starting at $1.99 per month for 100GB. The service has tiers: 200GB for $2.99 per month, 2TB for $9.99 per month and up to 30TB for $149.99 per month.
High switching costs. I doubt many users will switch photo management services as Google’s leadership position in Artificial Intelligence, Machine Learning and Natural Language Processing provides Photos users with a level of convenience unmatched by alternative photo management services.