Chess.com has a new subscription option for chess families and tight-knit players: a friends and family plan.
The site, where players around the world can face off against live opponents, play bots, and solve chess puzzles, introduced its group tier in January, offering a players a discount on its top-tier offerings with the aim of winning the long-term loyalty game.
For $199.99 a year, Chess.com’s “Friends and Family” Diamond Premium plan offers up to four people access to feature’s like an ad-free site experience, chess lessons, game reviews, and insights into how to improve their skills that would run an individual subscriber $120 a year.
“It’s good for consumers, because it brings down the average cost of the membership,” says Erik Allebest, founder and CEO of Chess.com. “But then it’s also good for the business and for retention, because people tend to stick together and stay members together. Who wants to cancel a membership and then have all their friends lose their benefits?”
Squaring the economics
Chess.com’s subscriptions are more easily compared to music streamers that video platforms—with companies like Netflix and Max taking action to curb password sharing. Like an avid music fan who doesn’t want a friend or family member’s taste throwing off their recommendations, Chess.com users guard their rating—and passwords—fiercely.
“Nobody wants to share their chess login—[someone could] play a game and mess up their rating,” Allebest says. “It becomes more important to have a friends and family plan, because you don’t just get to share your password and do it that way.”
Music streamers also offer an example of how the group subscription economics could play out. In 2016, Spotify delighted customers by dropping their family plan’s price to just $14.99 per month.
The move kept them competitive with Apple, but over time, the price has crept up—it now sits at $19.99 per month. That hasn’t had a negative affect on the number of people signing up for it, though. On its most recent quarterly earnings call, Spotify co-president and chief business officer Alex Nordstrom noted that its family plan is “making up a big proportion of [our] subscriber base.”
Allebest estimates that with its current “all-time high” of approximately 1.5 million paying subscribers, Chess.com’s premium accounts make up about 80% of the site’s revenue. The new friends and family plan could eat into that bottom line in the short term, but sees long-term loyalty as something worth an early revenue hit.
“If it’s $199 for up to four people, maybe six people in the future, you’re getting fewer dollars per person,” Allebest says. “The bet is that you’ll get lower dollars-per-user, but you’ll get a longer lifetime subscription.”
Seeing what works
Allebest says the site is no stranger to experimenting with different ways to attract and retain players. The company offers gift subscriptions—an effort he calls “moderately successful”—and micro-tests a variety of new features among Chess.com’s “Beta Club” of power users.
“We’re not innovating dramatically here,” Allebest says. “But we are testing it. We tried a lower price. We’re going to try adding more seats to it.”
Their metric of success will be subscriber turnover, or “churn” rates. Allebest says that he’s “constantly monitoring” the company’s churn, though he declined to share a specific churn rate. It’ll take a year, he estimates, until they know just how successful the program is.
But Allebest is confident that the program will work out, as they continue to fine-tune it to be the best value. “I feel like paying a subscription for a service that provides utility in your life is fair,” he says. “[We’re] trying to find the right balance.”
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