The future of the premium theme business

24 Comments

The WordPress community has many times been divided by the legitimacy or ethical purpose behind the premium theme business. There are the camps that believe all things created for WordPress should be free in line with the open source value WordPress was built on. Then there are the camps who have fought to show that there is a need for paid themes in the marketplace and that there is nothing wrong with earning a nice profit for their work. Regardless of which camp you stand in, there is no argument that premium products have made WordPress better as a whole and that the ultimate client, the end user, has benefited greatly from these tools. But where is the premium theme market heading and will these ʻethicalʼ concerns be a thing of the past?

More and more developers and designers are entering the market and creating their own themes or child theme. Theme provider sites such as ThemeGarden, ThemeForest, and Mojo Themes are quickly growing and bringing great competition to the “Big Four” theme companies. Then there are a plethora of theme frameworks such as Genesis, Startbox, Carrington, Thematic, and Xtreme One that are beneficial but may further complicate – or dilute – the premium market place. Finally, it also appears that many of the WordPress purists are finally coming to grip with the reality and value of paid products as long as they adhere to the WordPress GPL.

What does the mean for the premium theme business?

  • Premium is going away. How do you even define that term now in a community that is producing excellent products that are both paid and free? I think the lines have become blurred and that it will be more about “whatʼs best for me” in the future, over what is paid or fee.
  • Premium has become outdated. If you look at some of the first theme companies that started creating premium themes for WordPress, they are quickly (or already are) becoming outdated and are no longer “premium-looking” compared to what the new designers and developers are producing. Who wants to purchase a design that worked for 2007?

There are other situations that I believe are also changing the landscape and good oleʼ days of premium theme companies.

  • Product and brand dilution. Several companies are now diving into different markets such as plugins, services, training, and other interests in order to diversify. While it is a great strategy, this overextension may cause their customers to be concerned that the products they have come to love and rely on are not getting the proper attention they deserve. Not to mention people become overwhelmed by the smattering of options constantly being made available.
  • Specialists and niches. As bigger theme companies lose focus and market share, entrepreneurs, designers, and developers will have a great advantage to exploit this situation. There is a huge opportunity for the people who will focus on a particular niche or who chose to specialize on a specific target or product. Plus, they will be able to do a better job of meeting the customerʼs needs.
  • More talent being known. Because of the explosion of sites like ThemeGarden, we have had the opportunity to see extremely talented designers and developers who are launching excellent products – and some for a better price! Tie these people in with the point above and things will change more rapidly.

There will always be a great appreciation for the pioneers of premium theme products, but I believe that what they experienced the last three years is coming to an end. They will not only have to convince people why their stuff is “premium” – a word that will be highly ambiguous – but they will also have to adapt to the rapid deployment of amazing products into the WordPress community by hundreds of talented people. It will be interesting to see what transpires over 2011.

And if I was a betting man… my prediction is that StudioPress will be the current company to best survive and thrive in the changing landscape. Iʼll also place my wager on some of the upcoming developers to be the leaders of the future.

24 thoughts on “The future of the premium theme business

  1. I guess that the premium market is a product of the popularity of WordPress, particularly in it’s ever growing commercial and ‘as a CMS’ use. If publishers and companies are going to profit as a result of using WordPress (e.g. for publishing or hosting their commercial websites), then they will be prepared to pay for premium items if they will provide a return on their investment.

  2. Disagree. This post reads like a personal wish list.

    The commercial/premium WordPress community will continue its growth and success directly in tandem to that of the overall WordPress community.

    Good to see diverse offerings. Great to see new talent emerging. Nothing but positive steps. I personally think the premium/commercial community has merely scratched the surface and has a long and bright future. Looking forward to what the premium community brings in 2011.

    • I agree 100% with Lisa. Plus, I will add that in my opinion StudioPress is nothing compared to some of the latest WP work coming out (not to mention that their support isn’t great and they have a very small conversion rate). You can see better and more complex frameworks on individual themes on TF.

      If talking about sales/popularity the big 4 should actually be:

      Themeforest, Elegant Themes, Thesis & Templatic (maybe WooThemes but I haven’t had such a great experience with them, although the themes are good – yet overpriced)

      IMO.

      • I think the article is addressing the evolution of the commercial theme market, not how much money their adverts generate for theme directory website such as yours.

        I am sure that Themeforest sell a lot of themes (and, therefore, generate a lot of affiliate commissions for your website) because they LOOK wonderful but you only have to read the comment threads for individual themes to realize that the underlying code is shoddy and that the individual designers rarely have the time, ability or motivation to fix the problems.

        That is why I suggest, further down in the comment thread, that standardising upon one framework, that handles everything under the hook, is going to be important, especially for large, sprawling marketplaces such as Themeforest.

  3. I think there’s still some confusion in the terms being thrown around – ethics, premium, etc – even in this article.

    1. Premium is a marketing term – we’re really talking about commercial themes and the market for them.

    2. It’s been said a thousand times before but – the GPL and making money are not mutually exclusive. This year that has become better understood, but I think it’s important to remain clear on that. Commercial theme designers are using the freedoms the GPL allows (as long as they follow the terms of the license in turn).

    3. The “ethical” question isn’t about making money selling themes – it’s about following the terms of the license. This makes sure that innovation isn’t walled off by attempting to change the license to a traditional copyright. In this way, commercial themes are great because they help everyone progress.

    There may be a few people who think that everything around WordPress should be free-of-charge, but that’s not consistent with the freedoms the GPL allow.

  4. Interesting perspective – but I’m not sure I would agree with your view.

    Yes, the quality of free themes has sky rocketed.
    Yes, users now have much more choice.
    Yes, WordPress users now expect more for less.

    But there’s a really big big difference between 2010 and 2007 – the size of the market. WordPress has grown exponentially in that timeframe. The percentage of users who buy themes in miniscule but as WordPress usages explodes (as it did in 2010) that tiny percentage starts to become a pretty big number in itself.

    You also have to remember that a lot of businesses now use WordPress extensively and will actually prefer to pay for a theme. Why? Well yes the theme might look pretty/have nice theme options etc. etc. but what they are really paying for is the comfort factor of support/updates etc.

    Also. the design/development community (agencies, freelancers etc.) are probably the biggest purchasers of premium themes and as more and more agencies use WordPress I see a very healthy future for premium theme shops – well the big boys anyway. I think it will be really hard for new entrants to build their ‘brand’ as customers are looking for reliability and reputation now more than just the merits of an individual theme.

    Ed

      • I would consider iThemes to fall into this group –
        “companies that started creating premium themes for WordPress, they
        are quickly (or already are) becoming outdated and are no longer
        “premium-looking” compared to what the new designers and developers
        are producing.”

        • I agree that iThemes is losing ground in the premium theme market.

          So there is no dispute that Studiopress and Woothemes are two of the “Big Four”. In my opinion, the other two are Elegantthemes and Press75.

      • I don’t think Templatic is good enough as their themes are quite buggy and many of their existing customers complain about their bad support. You can find the user comments about Templatic here.

  5. Got to agree with Lisa and others on this. The Premium
    (commercial) theme market will continue to thrive and grow and
    there is still a lot of room for more than one company to do so.
    Diversification is going to be key to their continued growth. The
    fact that they started in one niche and are slowly branching out is
    logical, not detrimental. The growth of any market peaks at some
    point but I still deal with completely static sites on a daily
    basis. CMS’s are still in demand.

  6. I don’t think commercial themes will go away anytime soon.
    There’s some pretty powerfull themes coming out and with a lot of
    startup companies with such small development budgets it only makes
    sense to start with a premium theme and tweak it to suit. I don’t
    really think it’s all about the “big four” or who’s going to be at
    the top of the theme pyramid either. I feel much better about using
    a theme from a less known company then to use something that’s
    being used by hundreds, if not thousands of other people.

  7. I agree that as the market grows, you’ll start to see more diversification and more niches, but I don’t think that means the end of Premium.

    What it does mean, and this was certainly true before this year, is that simply naming yourself premium isnt enough. To stand out and make money in the market, you have to either target your niche really well or do some serious marketing for more “mainstream” recognition.

    If there is any end to premium, I think it’s simply a change in semantics. It’s all about theme frameworks and “starter themes” base themes or “child themes” regardless of whether or not having a “framework” really matters with your product.

    For companies like WooThemes and Genesis (StudioPress), having a framework makes sense (Woo might not take the same approach but they have a singular framework), for a lot of upstarts, I often think it’s just an attempt to get buzz word happy.

    Still, I dont see the premium market getting smaller, it as it grows it does make entering said market more difficult.

  8. Pingback: A Word On Commercial Themes « Weblog Tools Collection

  9. The explosive growth of WordPress overall has meant that the early movers in the commercial themes market were almost guaranteed success no matter what they did or how they priced their products. This created an illusory situation in which some companies have become “high on their own supply” – they have come to believe that their success is entirely due to their own marketing prowess and pricing strategies, rather than just being in the right place at the right time.

    WordPress is going to continue growing at break-neck speed and, as such, all the established companies will continue to do well, well enough to obscure the fact that they are failing to lock-in the lead they need to be a real contender in the next phase of this market.

    Smart companies are focused on establishing themselves as standards that others can build upon – a good example of this is StudioPress, because any designer can sell child themes for their reasonably-priced Genesis framework and anyone can setup a marketplace to sell Genesis child themes without having to get permission from StudioPress. As themes generally become more advanced and complicated, independent designers will appreciate being able to build upon a framework that handles all the basic, underlying technical details.

    More importantly, designers will be attracted to frameworks that are sold on the basis that the buyer, having paid once, is entitled to all updates for life for free. This is absolutely key because, if a framework is sold on a subscription basis, a third-party developer cannot be sure that his customers will always have the latest version.

    The very biggest consideration for any third-party designer, however, will be how many users already own the framework. Simple market size and market viability is going to attract the best designers, just as we have seen with the iPhone, Android and Palm app battle.

    Ego-driven companies are focused on upon making as much money as possible now and upon tying their customers into subscriptions. This seems smart – after all, most customers don’t really calculate how much that subscription will add up to over the years – and gives them plenty of money to pump into marketing, to artificially inflate their presence and create a false perception of their importance in the market, but I believe it also throws away any chance a company has of truly entrenching itself in the WordPress eco-system. Their healthy profits and apparent growth hide the fact that they are falling behind the more clearly focused companies, who are earning less per customer but selling to far more customers and establishing themselves as standards that others can build upon. Rockstar tactics are just an illusion, on par with TV infomercials, all that glitz and noise masks a genuine lack of vision.

    The money that any of these companies are making today is nothing, absolute peanuts, compared to what will be on the table in the coming years. I am frankly astonished that the main players in this game, despite growing up with an awareness of how software standards and monopolies arise, seem to be oblivious to what is happening right in front of their eyes. Again, they will continue to make plenty of money but at some point they will be gutted to realize the once-in-a-lifetime opportunity they blew.

  10. I think the future of Commercial themes is BRIGHT only for those that have a framework option. Any company or designer that is building commercial themes from scratch (just to make it look good) will not be able to keep up with the updates. After 1, 2, 4, 10, 20 themes, they will realize that they have screwed themselves over.

    The smarter ones that have a legit Framework like StudioPress will flourish and reap the coming benefits. WordPress is GROWING and more people are now looking for a reliable source.

    While Themeforest and other marketplaces have “Good-Looking” themes, they might not be the best coded themes. Furthermore the individual can disappear at anytime (we have seen this in the past). Whereas companies like StudioPress, or iThemes have been around for quite some time now, and I don’t see them going anywhere. I do have to agree with Donnacha that some themes that are just focusing on HIGH QUALITY GRAPHICS and Subscription models to survive will lose the battles because they are really inflating their real value. In the long run, only the company with the best support will win. From my experience, StudioPress has AWESOME support and Genesis is a very powerful framework.

    Looking forward to an exciting year… we will see a lot more Child Themes Development.

  11. Seems like the Thesis Theme never existed. I have always
    viewed them as the market leader, talking in the sense of the “Big
    Four” and the publicity they have in the market. Thesis is then
    followed by Genesis, which is fast catching up, then Headway which
    is also making good progress and finally the “new but not so new”
    kid on the block, The Catalyst, a mutation of the Frugal Theme. I
    believe the Catalyst is the Theme to watch in the coming months.
    Woo Themes, Elegant Themes and some others in the same genre, I
    consider them to be just “premium themes factories” which mass
    produce Themes for download. Anyway, I don’t think premium themes
    will be going anywhere soon. WordPress users are expanding so fast
    that there will be enough room for many more players. No doubt the
    quality of Free WordPress Themes have improved by leaps and bounds
    over the years and I do admit that some free themes are of premium
    quality, but the usage of Premium Themes is sometimes not limited
    to quality alone. When someone who has achieved a certain status,
    they will have to live up to the standard of that hard earned
    status. Thus, when a blogger has achieved some degree of success,
    we or certainly me, will be expecting them to be using Themes that
    are “premium”, unique and done by professionals, not ones that are
    downloaded used freely by thousands of others. Might sound
    capitalistic, materialistic or even obnoxious, but that’s the way
    humans are. I think.

  12. To me some of these comments talking about which companies fit in to the ‘big four’ read more like people have only had experience with one or two, then comment on others they haven’t tried before …

    To me, Woothemes is the big ONE and not many else. They employ nearly 15 staff and make themes for 6 different platforms as well as plugins and were generating +$2 million annual income from it as early as last year. Not aware other companies are in that league (although could be wrong as I haven’t had experience with “every” single company; just most)??

    Premium themes are not going away anytime soon – or ever, I believe.

  13. I started using wordpress last year and I think that without custom themes or plugins wordpress would not be that powerfull. Im not a developper nor designer but wordpress lets me setup sites in no time, and thanks to the great community i met really interesting people with whom i work together everyday.

    Without premium plugs & themes wordpress wouldnt be that powerful, and i think the developpers and designers should get al the credits for their contributions, even if they are not free.

    Be honest, who can make a theme for 1 time use? Better to put it in the market and let other people enjoy it as well for affordable prices.

  14. First I would like to say thanks to everyone for their comments. This is what makes any community vibrant – a difference of values, opinions, and insight! Second, I would like to apologize for some of the misinterpretations that have been “read into” by this post. I should have done a better job articulating my thoughts based on the constructive feedback by others and the emotional responses on Twitter.

    I believe that Donnacha and Steve Lambert captured some of what I meant to say and the difference of one’s terminology.

    The idea I state about “premium themes” going away is not that the commercial market is going to die, but rather the “premium theme business” of the past will. in 2010, free and paid theme are now equally great – there is not as a distinguishable line as there used to be, and the companies who were fortunate to be at the right place at the right time in the beginning, can no longer rest on their laurels and use the word premium as a way to sell their products. So the terminology of “premium theme” is somewhat a misnomer, especially with new individuals launching exceptional products (paid and free) that are better than those produced two years ago.

    With that out of the way …

    The commercial theme market will change (it already has been) and it is being stretched by the amount of people producing theme frameworks, stand alone themes, and child themes. There is going to be a bigger fight for market share and the larger theme companies (Woo, StudioPress, iThemes, and Thesis – my “Big Four”) will have to be prepared for the amazing talent competing against them. Sure, there is PLENTY of opportunity in the commercial market with WordPress exploding in popularity and the amount of people who need great products for their businesses, but I believe the “new breed” of developers and designers who focus their energies in a single product or niche will be the deadliest to compete against and will win. So here I apologize in that I meant to say “the premium market” is dead and not the overall commercial market – a misinterpretation that is my fault.

    There are a few more things I want to address here (sorry for the long response) and clarify.

    Diversification: My viewpoint on product and brand dilution is not meant to say that companies should not diversify, but to do so with extreme caution. I have weekly conversations with consumers who buy and use a variety of WP products, and there are many who are losing confidence and trust in those who offer too much. They feel that certain services and products are not receiving the attention they deserve and that promises are not being delivered upon. This is THEIR – the consumer’s words – not mine. It pays to listen to your customers in any market.

    Subscription Models and Eye Candy: I agree with what others have said about the subscription model and feel that consumers at some point will determine this is no longer a viable option. Those who offer a great product with life-time updates and excellent customer service will have a competitive edge. I also agree that the themes created as ‘eye-candy’ are not enough. I’ve bought several from Theme Garden that don’t work and suck to work with. There has to be a balance between design and function.

    Lastly, I want people to know despite some of the comments in WP communities and Twitter, that this was NOT a malicious attack on the company I used to work for and invested two years of my life in. I would consider this highly immature and unprofessional. Those who truly know me would know this is not how I operate and I SINCERELY APOLOGIZE to the entire iThemes team and the WP community if this motive was assumed. My post was in reference to the theme business as a whole and are my opinions based on previous business experience, seeing future trends, and being involved in WP for several years. I do accept all responsibility however in this situation and thank you for the time to explain.

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