Why we stop selling WordPress themes on WordPress.com

Why it sometimes makes sense to dump $36k of yearly revenue

For those of you who don’t know, WordPress.com is a WordPress hosting company operated by Automattic, the company of WordPress co-founder Matt Mullenweg. WordPress.com is the entry level for many users who start building their websites with WordPress, as it doesn’t involve hosting your own website. In the past our flagship theme, MH Magazine, was available on WordPress.com as well, but we decided to stop selling themes on WordPress.com. Why? Let’s start at the beginning…

How it all started with WordPress.com

Growth
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As you may know, MH Themes was founded in 2012 and we launched our MH Magazine theme in February 2013. The theme quickly became popular and our business started to grow rapidly. In January 2014 Philip Authur Moore (a very nice guy who worked at Automattic) reached out to us and asked if we would like to become a premium theme partner of Automattic and launch WordPress themes on WordPress.com. As you probably can imagine, that was very exciting news for us.

Since this was an interesting business opportunity, opening up a whole new market for us, we were thrilled to sign the contract with Automattic. A few days later the theme review process started and it quickly became clear that WordPress.com is something completely different than running a self-hosted site. We basically needed to remove most of the features of our theme because many of it was covered by WordPress.com upsells, Jetpack or simply not allowed on WordPress.com.

That means from that time on we needed to maintain a second codebase, which of course wasn’t ideal. However, since the potential business opportunites outweight that, it wasn’t much of an issue for us. We were more than thrilled and very excited to get started on WordPress.com.

Launching more WordPress themes on WordPress.com

Trying hard
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Since MH Magazine was selling quite well on WordPress.com and quickly became one of the most popular premium themes there (based on sales) we of course were interested in launching more themes. Well, it turned out that was too optimistic. Unfortunately the review process turned out to be not very effective. We tried to launch new themes 2-3 times, but they always have been rejected based on subjective criteria. The feedback from the review team wasn’t very helful, for example:

  • The design is too boxy (whatever that means…)
  • Theme has too many options (although it were only minimal options)
  • or, my favorite, we’re going to pass on this one (ok, why?).

It quickly turned out that launching themes on WordPress.com was quite a lottery. I don’t know how they select themes, but it seems pretty much is based on the subjective opinion of the reviewer. So probably you can have luck with a reviewer or not. The most annoying thing is when themes get rejected and a few days later similar themes from other developers or even from Automattic itself start popping up on WordPress.com. It’s very frustrating, intransparent and hard to understand.

Launching WordPress themes on .org is already quite a hassle, but there at least you’re dealing with objective requirements so you can prepare a theme that will pass. On WordPress.com on the other hand you never know if they will like the theme or not. Since you need to code .com specific themes based on their special requirements, you basically spend weeks of work without being sure if it will pay off or not. This can be very frustrating, and it seems more developers feel that way.

The never ending WordPress.com / .org confusion

Mistake
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Ok, so far I covered the issues related to launching a WordPress theme on WordPress.com. But once you finally have launched the theme, you quickly run into the WordPress.com / .org confusion. Especially if you also run a theme shop with WordPress themes for self-hosted sites, you’re dealing with confused customers all the time who don’t understand the difference between WordPress.com and WordPress.org. Naming these two similar probably was the worst business decision ever.

We’ve been dealing with WordPress.com customers all the time who purchased the MH Magazine theme on our website, thinking they can upload it to their WordPress.com site. On the other hand we’ve been dealing with users of self-hosted sites, purchasing the theme on WordPress.com and then asking where they can download the files (which isn’t possible on WordPress.com). You can’t blame the users, it’s simply a complete mess, leading to much unnecessary confusion.

Another annoying thing is that the user experience on WordPress.com is quite different in comparison to a regular self-hosted WordPress site. They have a redesigned customizer, different backend, Calypso and also access to /wp-admin is quite hidden and hard to find. This leads to a situation where you’re dealing with more confused users, for example if they check the theme documentation on our site, which of course doesn’t apply to what they see on WordPress.com.

Automattic moving more and more into the .org ecosystem

WordPress
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Luckily Automattic recently opened up WordPress.com a bit, which at least partially helps to avoid this WordPress.com / .org confusion. You can now upload custom themes to WordPress.com if you have subscribed to a business plan. There still are the issues with the completely different backend, customizer and Calypso, but at least people can upload their WordPress theme if they’ve purchased a non-WordPress.com theme. This seems redundant, but wasn’t possible before.

Automattic recently seems to shift their focus more and more on the WordPress.org ecosystem. I don’t know what exactly they have planned, but we’ll see. Jetpack always has been a WordPress.com marketing tool since you need a WordPress.com account to use many of the features. In March Automattic announced that they will make the WordPress.com free themes available via Jetpack.

I already raised my concerns about this approach on WP Tavern as it seems this is the first step of a completely different strategy, directly affecting .org businesses. What worries me is how this may affect the business of small business owners who have built their business over the years. Automattic moving more and more into the .org sphere seems to be a fight small theme or plugin developers and business owners can’t win on the long run. It’s basically like David vs. Goliath.

Yesterday we received an email from WordPress.com that premium themes will be freely available soon for all Jetpack users who have a Professional plan. That means Automattic now starts putting .com premium themes in front of millions of WordPress users. Sounds good right, or maybe not?

WordPress.com makes premium themes available via Jetpack

Jetpack Plugin Banner

While this may seem like a great idea, at least for Automattic, it also leads to a few issues for theme developers who were previously selling themes on WordPress.com. One of the issues is that these premium themes are available for free. This also affects WordPress.com themes which were previously sold for $79 or even $175. Instead theme developers will get paid by Automattic based on the use of the theme per day, concrete that means up to $50 per year (approximately $.137 per day).

That means theme developers who had previously priced their theme differently are now being forced to sell their WordPress themes for that fixed rate. You can either accept that offer or your themes will be removed from WordPress.com. In the past there always was a 50/50 revenue share model, but recently WordPress.com introduced the new unlimited pricing for their premium and business plans as well. This immediately resulted in a noticeable drop of revenue on .com for us.

But that’s not the only issue with the Jetpack approach. The MH Magazine theme on WordPress.com is running a 3 year old codebase and has an outdated design. We completely recoded and redesigned MH Magazine for self-hosted sites in 2015. Unfortunately we haven’t been allowed to update the WordPress.com theme as well (even since users were asking for it) because it would automatically affect user sites. It also wasn’t allowed to release the up to date theme as a separate version.

This now leads to a situation where two completely different versions of the same theme would be available for .org users. This isn’t an acceptable situation as it opens the door for lots of confusion. We also wouldn’t want that people make their buying decision based on a three year old theme which hasn’t been updated, while at the same time an up to date version is available. It’s just a mess and leads to the same kind of confusion like this whole annoying WordPress.com / .org thing.

Decision of moving away from WordPress.com and business impact

Pull the plug
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With that being said, we’ve decided to pull the plug and stop selling WordPress themes on WordPress.com for now. That whole hassle and confusion amongst users just isn’t worth it. We were thinking of pulling the plug before, but since WordPress.com was an isolated marketplace which didn’t affect the .org business, we just kept going. But now since the Jetpack approach would directly affect .org users, which is our main business, the situation is different.

You may think that it isn’t a good business decision to stop selling themes on WordPress.com for now. Luckily, WordPress.com only is a small fraction of our revenue. Since the launch of MH Magazine on WordPress.com in February 2014, the theme made $117,182 in sales (approx. $3k per month).

WordPress.com Revenue

Of course $3k per month on WordPress.com still is a lot of money, but we rather dump $36k of yearly revenue than making it hard and confusing for users to figure things out. There simply is too much confusion involved here, while the WordPress.com / .org thing is already hard to understand for users, the new Jetpack approach doesn’t make it better.

We’re not interested in making a 3 year old outdated WordPress theme available to millions of users while we’re selling an up to date and well maintained version at the same time. Luckily our theme business for self-hosted WordPress sites is very healthy with more than $370k of yearly revenue which makes the decision not that hard. But still it’s not great to see all these business related changes on WordPress.com and I know that other theme developers feel the same way.

Recently WordPress.com informed theme developers that they won’t accept new themes for an undefined period of time. This was a huge shock for some theme developers on .com who were working for weeks on new themes for WordPress.com which they now can’t release (while relying on the revenue). It would be good to see more transparency on WordPress.com as there have been some unexpected surpises recently which directly affects the business of premium theme partners.

Now a few days after closing WordPress.com for new theme submissions, the Jetpack announcement comes out. There also seems to be an issue with credibility. In the WP Tavern post that was linked before, Richard Muscat from the Jetpack team said:

WordPress.com has no immediate plans to sell themes at this time. Jetpack users have access to free themes but will not, in the foreseeable future, be invited to purchase WordPress.com’s commercial themes.

That statement was from March, we now have June. Seems a lot has happened in three months.

Conclusions for businesses selling WordPress themes

Be careful
Image Source: RyanMcGuire – Pixabay.com / License: CC0 Public Domain

As you can see, life is full of surprises. One important advice I would give other theme shops definitely is don’t make yourself dependent on other companies or marketplaces. It’s crucial to keep your business as much under your own control as possible. For a WordPress theme shop that means invest in your own website instead of relying on revenue from 3rd party venues.

Luckily, we did this since the start in 2012 and we’ve completely removed our commercial themes from 3rd party marketplaces some time ago (with one exception). While this may involve more work, investments in marketing and taking care of running your own website, you at least have control over your own business and the related business decisions.

What is your opinion on the WordPress.com and Jetpack changes? Is your business affected as well? If you’re a seller on WordPress.com, how has your revenue changed since the new pricing has been introduced? It would be great to read your experience in the comments below.

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17 Comments

  1. Thanks for sharing your story.

    I am also noticing that Jetpack is becoming more and more of a solution for everything. For me as a publisher, it is simply too large and their integrations make me a bit worried about my data.

    As a plugin developer I of course think about what happens when they integrate a solution like mine. Not that competition is bad, but being listed as a recommended plugin everywhere without objective reason seems like an unfair advantage.

    And I definitely agree with your access of WordPress.com vs. .org being a very bad business decision and that hosting your solution yourself has a lot of advantages.

    Thomas

    • Hi Thomas, thanks a lot for your feedback and especially for your comment. It seems when it comes to WordPress.com / Automattic most people rather prefer sharing their thoughts via email than doing this publicly in a comment. 🙂

      While I fully understand that developers who are relying on the revenue from WordPress.com prefer to share criticism privately, I still think it’s important to share thoughts publicly in a constructive discussion as this more likely results in changes.

  2. Hi. Thank you for writing this post and for being so honest and open about your numbers and your thought processes.

    I also genuinely congratulate you on being so bold with your business decisions and thinking about things not only in terms of short-term revenue but in terms of long-term user confusion (or lack thereof).

    I wanted to respond to a couple of your points, not to change your mind, but in the interests of transparency.

    Regarding my comments to WPTavern earlier this year:

    WordPress.com has no immediate plans to sell themes at this time. Jetpack users have access to free themes but will not, in the foreseeable future, be invited to purchase WordPress.com’s commercial themes.

    That was true at the time. We had of course discussed it but we had no immediate plans. We had such great user feedback from our inclusion of free themes and repeated requests about premium themes that we decided to change our approach and speed up the process.

    About revenue from themes:

    This immediately resulted in a noticeable drop of revenue on .com for us.

    We believe, based on our research and data, that although in the short-term some theme shops may see smaller immediate revenues, in the long-term this will be much made up for by ongoing recurring revenue over months and years. I understand that this is a step change for many theme developers and I understand also that change is often uncomfortable.

    About Jetpack being a marketing tool:

    Jetpack always has been a WordPress.com marketing tool since you need a WordPress.com account to use many of the features.

    To an extent, yes Jetpack is a “marketing tool” but its a bit disingenuous to think it is just that. Irrespective of whether you like Jetpack or not, it is a full-featured, standalone product that provides a large number of services to self-hosted sites. We don’t use Jetpack to try to convince users to switch to WordPress.com — we use Jetpack to convince users to stick with their self-hosted WordPress sites rather than switch to a non-WordPress option. An approach that we think benefits the entire WordPress ecosystem in the long-term.

    About user confusion:

    You can’t blame the users, it’s simply a complete mess, leading to much unnecessary confusion.

    The confusion between .org/.com is something we are constantly addressing and improving. In fact, *one* of the reasons for making themes available in Jetpack is precisely to reduce that confusion so that users are not paying for things on one platform that they then can’t use elsewhere and then have to go through painful refund processes etc. While you might disagree that this is the best approach, I assure you that the underlying intention is precisely that as we derive no benefit from confused users.

    Please feel free to reach out to me directly at [email removed to avoid spam] should you wish to.

    • Hi Richard,

      thanks a lot for taking the time to respond to the article and for being open about sharing details on the Jetpack decisions.

      How do you feel about that while Jetpack will make .com themes available to .org users, the .com version will directly compete with the .org version of the theme? Isn’t that disadvantageous for theme developers? Especially since most of the time the .com and .org versions of the theme will be different.

      If I understand correctly, Jetpack users also will be able to access the code of .com themes. Will they be able to download these themes? What if users download the theme and install somewhere else (e.g. a site without Jetpack). How do you want to track that to ensure that theme developers get paid for the usage of their theme?

      • How do you feel about that while Jetpack will make .com themes available to .org users, the .com version will directly compete with the .org version of the theme? Isn’t that disadvantageous for theme developers?

        Our hope and objective is that by generating recurring revenue and by making these themes available to a much larger audience, theme developers will be better off in the medium- to long-term. There is the added benefit to themers that we undertake a lot of the marketing effort and spend allowing you to focus on creating new themes.

        Especially since most of the time the .com and .org versions of the theme will be different.

        I can’t speak to the theme review and submission processes. As you know submissions of new themes to our directory is currently paused and I don’t know enough about that to be able to comment.

        If I understand correctly, Jetpack users also will be able to access the code of .com themes. Will they be able to download these themes? What if users download the theme and install somewhere else (e.g. a site without Jetpack).

        You understand correctly. We actually debated this at length and my personal opinion, and the approach we’re taking, is to fully respect the GPL, community, and .org guidelines. In other words, we will operate the process of selling themes just like everybody else does, including yourself as stated on your pricing page:

        “All WordPress themes can be used for lifetime. To receive updates and support after the license has expired, you can renew at any time with 25% discount.”

        (For clarity, the 25% discount is referring to MH Themes’s policy not Jetpack’s but the principle is the same: user owns the code, support and updates require renewal.)

        • Thanks again for the clarification. In regards to selling themes through Jetpack, in the email from WordPress.com it says that the revenue share is based on the daily usage of a theme, approximately $.137 USD per day.

          From my understanding this is something different in comparison to the regular business model where the customer pays the full price upfront and then he can use the theme as preferred.

          So my question rather was related to how you’re going to track the usage of a theme when people just download premium themes through their Jetpack plan and then install on other sites. Does that mean in these cases the theme developer won’t get paid for these sites?

          • So my question rather was related to how you’re going to track the usage of a theme when people just download premium themes through their Jetpack plan and then install on other sites. Does that mean in these cases the theme developer won’t get paid for these sites?

            Our approach is (I believe) similar to what is standard best practice in the WP ecosystem: the theme files and code are downloadable and do not require a connection to any third party server to function.

            How do you handle such situations? If I purchase one of your themes, how do you prevent me from using it on a different site? Or on more sites than the license purchased officially allows?

            • I think there is a misunderstanding. As far as I can see you don’t pay the theme developer upfront, but you’ll pay based on site usage (at least that’s what the WordPress.com email says). Just as an example, a customer with the Jetpack Professional plan activates a theme for a day – so according to your revenue share model the theme developer will get paid $.137 USD.

              But at the same time the customer downloads the theme files and installs the theme on 10 other sites. How are you going to track the usage of the theme (e.g. if Jetpack isn’t installed on these sites) to ensure that the theme developer gets paid? Or does it mean in this example the developer just will earn $.137 USD?

              • I did not misunderstand your question 🙂

                The question of whether a provider is paid upfront or in arrears is immaterial. The core issue is whether one can track usage of a theme on a self-hosted WordPress site for which the user is not licensed.

                AFAIK, there is no way of tracking such a thing *without invading the user’s privacy*. My earlier question stands: How do you handle such situations? If I purchase one of your themes, how do you prevent me from using it on a different site? Or on more sites than the license purchased officially allows?

                • Hey Richard, we don’t handle it differently of course (like anyone else in the WP ecosystem) as there is no ethical way to track it (as you already said).

                  However, I think there is a huge difference if theme developers get paid $50-100 upfront for access to theme files or if a user can theoretically access the theme files for 14 ct. Anyway, I think you’ve answered my question. Thanks for that. 🙂

  3. It does feel like Automattic started monetizing more and more aggressively across multiple channels, sometimes destroying a few bridges here and there. All is good and acceptable in business I guess.

    • Hi Dumitru, yes – it definitely feels that way. I think part of the reason (and these are only assumptions) is that since Automattic is heavily venture-capital backed, probably the VCs are pushing to see ROI. And they may not like the previous strategy of Automattic.

      Especially since the market for hosted solutions is getting very competitive, it’s not so certain that Automattic will succeed with their product on the long run. This could make VCs nervous. There are interesting articles about that, for example: Automattic needs to justify valuation.

      It’s obvious that Automattic tries to monetize whatever possible (which of course is their right to do). It explains the recent price change for renewals of WooCommerce, the way they are now trying to improve (or establish) the monetization of .org users, closing of their SF office (official reason was that nobody is going there) and it could even explain why Matt Mullenweg has taken lead again for core development.

      It seems they are trying to heavily push to keep up with the competition, while this of course also comes at a price for the community (especially for small developers who don’t have the marketing budget of Automattic and who are not able to put their themes or plugins in front of millions of users), it may be good for WordPress on the long run. We’ll see…

  4. Well done! and thank you for this post. For the record, I am an avid fan of MH Pro Themes – and perhaps more importantly of the support from MH Themes which is both excellent and prompt (my most recent ticket was submitted late one night and I received a response the next morning, on a weekend – I think it was Fathers Day).

    As much as I love WordPress, I would not be at all unhappy if WordPress.com disappeared entirely. And you really don’t need the aggravation of dealing with such nonsense.

  5. Hi Michael,

    Been a long time user of the MH Magazine theme first on WordPress.com then on a self-hosted platform. It’s so strange to see how rules can drastically change the course of things. And eventually destroy systems. Such as what’s been happening on the music market with the free downloading process added to the streaming platforms.

    Therefore you need to protect yourself as much as possible to keep your business alive. And I think you took the best decision. In a world where everybody or so thinks he or she can get everything from a single click this might feel weird to some. But what makes something valuable has to be paid to sustain those who spend time and energy to make it work.

    Full support,
    Frederic

  6. Great post, you said it all. Business is a win-win game. And as WordPress.com can’t meet up to your plans, the best is to leave them until they change their ways.

    I can also see from another perspective that the guy from Jetpack is trying to make it easier for all users thereby affecting theme developers in their revenue. All is well, I love and use MH Themes, things will be brighter. Have a nice day.

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