Time running out on Kitely metered regions

Kitely‘s pricing options have long been a confusing mess for customers, with people having trouble understanding their metered billing in particular.

To address this issue, Kitely first rolled out flat-rate regions back in 2012, but the various pricing options just confused customers more.

It didn’t help that Kitely was the only grid in the metaverse renting regions based on how much they were used.

Over the next couple of years, Kitely continued to experiment with pricing, with each change adding yet more complexity.

Kitely prices in June of 2014

Kitely price chart.

Metered option going away on June 1

Starting next month, new customers coming to Kitely will only be able to rent fixed-price regions, the company announced today.

“This will make it a lot easier for people to compare what they get in Kitely with what they get elsewhere and thus see the benefit of using our services,” Kitely CEO Ilan Tochner told Hypergrid Business.

Other grids are currently renting out land at prices ranging from $3 per month for 15,000 prims — on SkyLife Grid — to $300 a month for 15,000 prims — on Second Life. Full price comparisons here.

These are all fixed-price regions. Customers pay a set amount each month, no matter how much their regions are used, or even if they’re not used at all.

Kitely’s fixed-price regions, while not the least expensive in the metaverse, do fall on the lower end of the price spectrum.

Currently, the least expensive option is $15 per month for 15,000 prims and up to 10 concurrent visitors.

It goes all the way up to $100 a month for 100,000 prims and up to 100 visitors — and the $100 region can be configured as a 16-region megaregion, which works out to about $6 per 6,250-prim region per month.

Kitely has a unique on-demand region hosting system where all the regions are hosted on the Amazon cloud, and are shut down when not in use.

If a region is not running when someone wants to teleport in, it can take from a few seconds to up to a minute to load it up. But otherwise, the on-demand regions function just about the same as regions on any other grid.

The Kitely Welcome Center is the default landing region when teleporting to grid.kitely.com:8002.

The Kitely Welcome Center is the default landing region when teleporting to grid.kitely.com:8002.

Existing customers grandfathered in

Since Kitely pays Amazon by the hour, it made some sense to charge customers that way, as well. Plus, metered pricing allowed some users to have a large number of regions for a low price.

For $20 a month for a “Premium Account,” for example, users could get up to five 100,000-prim regions, where the owner would get charged 1 KC per minute for every other person, besides themselves, using the region. That works out to between $0.20 and $0.30 per user per hour.

Beyond the five regions that came with the account, additional metered regions were between $1 and $1.50 a month each, plus the usage fees.

Except that there was no usage fee charged when the visitors themselves had premium accounts.

Existing customers with premium accounts can continue to use those accounts as long as they like, Tochner said. But if they discontinue them, they won’t be able to get them back.

In addition, starting now, the five regions that came with the $20 premium account will now be 10 regions for both new and existing customers. And the $35-a-month “Gold Plan” is back, which comes with 30 regions.

Customers who want either one of these plans will need to sign up before the end of the month.

Today, more than two-thirds of Kitely customers have a premium account, said Tochner. About a third have at least one fixed-price region, and some customers have both.

“Some people who have premium accounts opt to also get fixed-price worlds for their most popular worlds,” he said.

Although Kitely is a single OpenSim grid, with a common user registration system, inventories, and map, the company insists on referring to their regions as “worlds.”

Will it work?

According to Tochner, the existing pricing structure was scaring off new customers.

It also created a two-tier system of regions, where users without premium accounts could only access the fixed-price worlds, or those metered regions where the owners opted to pay for their visits.

Despite that, Kitely quickly grew to nearly 7,000 regions in size at last count, making it the largest commercial grid and third in land size after Virtual Worlds Grid and OSgrid.

In fact, the grid was regularly among the top region gainers in our monthly statistics report.

Meanwhile, Virtual Worlds Grid actually has just 800 regular regions and 72 giant, grid-owned, mega-regions each the size of 256 standard regions, and OSgrid allows anyone to connect home-based regions for free.

So Kitely is about to mess with a very successful formula.

Will the simpler-to-understand pricing structure make up for the loss of the low-cost metered regions?

Only time will tell.

Two things might help.

One is if they are able to reduce the start-up time of dormant regions to the point that people no longer notice a delay when they teleport in. That will eliminate the constant reminder that these regions are not up all the time — which, for some users, makes them not as good as always-on regions on other grids.

The other is if they are able to lower prices.

And that might well happen.

“Our fixed-price world options will be updated after the cutoff date,” said Tochner, but declined to provide any specifics, other than to say that the prices are not going up. “We’ll announce these new options once we start allowing people to order them.”

Bottom line

If you want to rent some fixed-price regions, and are currently deciding between Kitely and other grids, you might want to wait a month and see what their new price structure will be.

But if you need a lot of virtual land at the lowest possible cost, run out and rent Kitely’s metered regions now by signing up for either a premium or gold account. With the easy backups, they make great manufacturing and warehouse space for virtual content creators.

And they’re used for other activities, as well, said Tochner.

“Most of the worlds you see in the Explore Worlds page are Premium Worlds,” he said. “Even when people decide to allow non-Premium Account visitors to those worlds they often end up paying a lot less than they would have with a fixed-price world option. Premium Worlds allow up to 100,000 prims, 100 avatars and can be up to 16 regions in size. They are great value for most common usages — most OpenSim regions don’t get a lot of traffic so paying for time winds up costing significantly less than paying a fixed price per month.”

maria@hypergridbusiness.com'

Maria Korolov

Maria Korolov is editor and publisher of Hypergrid Business. She has been a journalist for more than twenty years and has worked for the Chicago Tribune, Reuters, and Computerworld and has reported from over a dozen countries, including Russia and China.

  • Dot

    From experience, for those who take the time to understand Kitely’s offerings, they work out to be among the best-value OpenSim hosting around in terms of both quality of service and actual technical resources given to the region instances.

    The current limited time offer for Premium is worth grabbing simply to keep your options open for the future.

    Let me explain why. If you take up the Premium option, it means in the future you will be able to make further low-cost multi-region worlds at a cost of around $1-$1.50 per region per month. If you don’t do it now, you will only be able to make fixed-price worlds — whether in Kitely or with other providers.

    In effect taking out the Premium option means you pay only what you need to pay, for exactly the resources you need.

    After this month, the Premium (and Gold) options will no longer be available. So get one now, experiment and see how it works in practice, then keep it or not as you choose. But don’t lose your chance to find out how (and how well) the Kitely system really works.

  • Dot

    One further comment: One person’s “confusing mess” is another’s “flexible set of options”. Maria has expressed a particular viewpoint in this article, especially in her word choice in the title and opening paragraph.

    Others do experience Kitely’s options differently, and appreciate the power they offer individual customers to tailor a package that exactly meets their needs.

    • You’re right — and Kitely certainly has a lot of users who DO understand the current pricing system and appreciate it.

      The fact that they’re renting out more regions than any other commercial grid underscores that.

      • Dot

        In which case, is the first paragraph going to be edited to properly reflect both points of view?

    • lmpierce

      Yes, you are pointing out excellent benefits of the ‘Premium’ option. But the point of the article is that despite that, the option is going away forever – For new customers after June 1, it will become moot whether the Premium plans are a benefit to users or not. It will also create dilemmas for some current Premium users. There can be no upgrading to the Gold plan after June 1, nor can there can ‘time off’ only storing worlds during lean months or a switch to Fixed and then back to Premium plans.

      • Hi Lawrence,

        People won’t be able to retain the benefits of using Premium Worlds if they give up their Premium Account (or Gold Plan). However, the concept of reducing prices when you can’t justify paying for full hosting won’t be going away. We’ll provide a way for people to keep worlds stored in their Kitely account for a reduced price when they can’t justify paying for them to be fully hosted. We’ll provide more details about this feature once we roll out the new fixed-price world options next month.

        • lmpierce

          This whole issue seems misleading to me.

          Kitely pricing has always been more complex than fixed-price systems. And a lot of us spent a few extra minutes to understand it and find that the Premium plans were an excellent value. I know I did.

          The greatest challenge, however, was not the pricing system. After all, it has always been logical if not initially clear. The greatest challenge has always been the issue of metered-pricing leading to cost uncertainties. That’s what puts people off.

          But since fixed-pricing has been available for some time now, if people didn’t care for the uncertainly of the Premium plans, they were free to ignore them and use fixed-pricing.

          How is eliminating Premium plans now going to improve the situation?

          Rather, it seems that Kitely has used the challenges surrounding the choosing of Premium plans to soft-sell the idea that they must be removed out of necessity. It seems more likely that they are being removed because they are simply too good of a value. Kitely has earned prestige over time and is using that create a new baseline for their worlds pricing.

          Grandfathering in current Premium plans still gives a great deal to some, but it’s basically only going to be there if one maintains it forever, which is, in the long run, just as good as, if not better than, the customers who come and go at higher fixed-pricing plans. This is possible because whereas in the past people could come and go on Premium plans, they are now stay in forever or be out forever plans.

          All of this seems more strategic, than necessary due to confusion.

          But will it work?

          I pay about $23-$25 a month for my sim (that includes KC’s for visitors). If I were to become a Kitely customer next month, I would need to spend $50 a month for the same sim. For the quality of service and prim count it may be a good value in the marketplace. But it means Kitely has lost a competitive edge that only they can offer…

          When Kitely started, I hosted my world for $5 a month plus KC’s for visitors. That made a truly affordable entry point to a premium hosting company. This was possible because Kitely is unique in their on-demand system of hosting. Today I could get started at $20 a month plus KC’s for visitors. Not nearly as good as $5, but $5 really did seem too good to last. Next June, however, it would cost me $50 to get started with Kitely with the same sim. Wow, that’s $600 a year! Yes, for really high traffic worlds, a fixed-price is a better value. I would guess, however, that most Kitely worlds do not see traffic counts that high. Personally, I think the loss of low-cost entry points with variable pricing is detrimental to a business, not business building.

          • I wish it were that simple Lawrence but, as people who’ve tried to explain our options to new users can attest, the existing offering is too complicated for many people. When we get a chance to talk to new users directly we explain how the system works and sell them on the benefits of our offering. However, we get dozens of new signups each day so the thing that happens the most is that people get frustrated by not understanding what we’re offering them and just leave without ordering anything.

            As to the other matter, we already provide a lower entry point than the cost of a Premium Account. The existing Starter World costs just $14.95/month and is suitable for most worlds. The more advanced world types now cost significantly more but, as stated in the article, we’ll be offering new fixed-price world options on June 1. Those new options will significantly reduce the cost of having bigger and more complex fixed-price Kitely worlds so you won’t need to pay $49.95/month to host your prim-rich world.

          • lmpierce

            I understand about the new pricing to be announced in June. From what you’re saying here, I am guessing you will have some appealing offers.

            I’m not as convinced by the guess that most people walk away frustrated. Although it’s not a perfect analogy, I think about ordering coffee at a donut shop versus Starbucks. The Starbucks menu is very complex relative to the average donut shop, but their lines go out the door. People seem to figure out what they want and what it costs, even in the face of dense menus and multiple options.

            I still feel that the difficulty with metered-pricing is the uncertainty of costs. For one thing, some people undoubtedly overestimate their anticipated visitor counts (due to unbounded optimism) and fear the costs will spiral out of control. For other people, the mere idea of variable costs is unappealing.

            In any event, let’s say some people (most, some – will we ever really know?) do walk away from the Kitely service due to confusion. I would counter that many (the same amount, more, less? – again, will we ever really know?) signed up because of the Premium plan benefits. To only weigh the negative doesn’t make sense to me. In fact, the one consumer I’m sure of, myself, can tell you without doubt that if not for the premium plan, I would not be with Kitely. The current fixed price for the requisite prim limits is too much… or in your words, I could not ‘justify’ the cost.

            Now, so it doesn’t seem that I’m just arguing a moot point, I do understand that the pricing plan changes are decided upon. I do look forward to the new fixed price plans. And for now, I appreciate the opportunity to continue with the Premium plan I use. After all, it really is an excellent value.

            What concerns me personally is that Kitely has become increasingly more expensive over time, at a rather substantial rate, and at some point, maybe in a year or two, it may become too expensive for me to justify using the service. And it troubled me in this instance that a service plan that is, by your own words, such a great value, is being withdrawn and turned into a locked-down take it now or lose it forever system of its own – and over ‘confusion’ in those who don’t appreciate its benefits? That truly aggravates me.

          • I can understand your aggravation Lawrence but, as people who’ve taken part in Kitely Community Meetings over the last few months can attest, we brainstormed quite a few options for reducing the perceived complexity and then several options for reducing the actual complexity before we settled on this plan.

            Having talked to many hundreds of our customers over the years, I can testify that confusion was the number one reason holding people back from becoming paying customers. Some of it due to all the interactions between the various plan types and world types and some of it due to the anxiety you mentioned and having to select the best option given that anxiety. Regardless, the end result was that we were losing a lot more customers than we gained because we were offering too many options.

            Telling people that they should ignore the time-based options if they wanted to reduce their anxiety wasn’t enough, they wanted to understand how everything worked so they wouldn’t feel they were missing out on some better deal. Of course when they understood that our time-based option was the best way to get powerful worlds for super cheap, they didn’t want to go for a fixed-price option. But they also didn’t stop fearing the price uncertainty that a time-based option entails. That internal conflict caused many people to just go somewhere else where they didn’t need to think and could just select the fixed-price option that best fit their budget. I wish people would behave differently but most of our potential customers haven’t.

            As an aside, you can see Maria’s comments over the years about the complexity of our pricing model to get some idea for the type of push-back we’ve had to deal with due to all the options we provided. We tried to be innovative and educate the market, we failed. Now we’re going to follow standard business practices and adopt a market proven pricing model. Kitely offers a premium service at affordable prices. Our upcoming offering will reflect that.

          • lmpierce

            This has still left me cynical. Sorry about that. The one thing that is perfectly understandable is that after May, all available price plans will be less of a value (if you prefer, ‘price-performance’) than the Premium plans are now – that is, in fact, the basis of your current promotion for the Premium Accounts…reflected in part as you say in the Kitely blog, “…for people who understand their benefits and want to take advantage of them [Premium Accounts], there is no better choice”. But if, over the next few years, I need or decide to take time off from Kitely hosting, it’s unlikely I’d come back. No longer being eligible for a Premium Account (that others continue to enjoy) I wouldn’t feel I was getting the best deal I could have been getting, all because of a short recess. In other words, I’d know that I only had much lower value plans than I was accustomed to available upon my return. Unlike fixed-price plans, the current Premium Account promotion is basically a lifetime sign-up, or else! – which I find hard to feel comfortable about. So it seems to me that all of the arguments work for and against the plan changes if one considers all of the sensitivities that customers have expressed.

            Nonetheless, I would hope that your plans moving forward are successful for you. And in the end, if customers are happy with what they can get at the price they want to pay, and you maximize the number of customers, I too would rate that a winning formula.

            And, above all, I agree that Kitely offers a premium service.

          • If, after the cutoff date, you need or decide to take time off from your Premium Account (or Gold Plan) then once you wish to have your own virtual world again you’ll face the same options that any new Kitely user will face. Our offering will need to be attractive enough for you to want to take it considering all the other options that you’ll have with other providers.

            Our focus will be on price/performance in terms of customer support, features, technological prowess, server resources, uptime, and overall professionalism. Going with another provider will result in you getting less value per dollar than you’d get with Kitely. It may suck that you’d no longer be able to get to take advantage of the Premium Account / Gold Plan deal that you gave up; But it would suck more if you went somewhere else and got less bang for your buck than you’d be able to get with Kitely at that point in time. We’re betting that not many people in that situation will cut off their nose to spite their face. 🙂

          • lmpierce

            Okay… I’m sure people will keep that in mind, although that wasn’t my point. In your explanations, you had suggested that customers often respond emotionally, not necessarily rationally, and I agree.

            But here’s what I think is already disappointing today, not at some future date: Unless one commits to an unbroken lifetime of payments to Kitely by the end of this May, all paths moving forward offer less value than today – not by my standards, but by yours, as reflected in the way the Premium Accounts are currently being promoted. As noted, I find that disappointing.

            But yes, obviously people will make the most of what is available at each point in time.

          • The Premium Account and Gold Plan are a great deal for those that understand them. Unfortunately, most people don’t fully appreciate how valuable they are and therefore won’t really miss them after they are gone from our offering.

            As for those that do understand their value, and get them grandfathered-in now, I expect they’ll want to retain their account status until they either see no future need for our service or find a better alternative (either in what we offer or what someone else offers).

            As we intend to remain attractive to our customers, I expect that the price/performance of our fixed-price offering will improve even further over time. Eventually, it will surpass the value you get from the grandfathered account and people will gradually switch over. How long that will take is a different question, which is why getting the Premium Account or Gold Plan now is the prudent thing to do.

          • lmpierce

            Thanks for this reply. It’s very affirmative of better things to come and grounds one’s decision, with more than just caveats, in staying on board with the Premium plans now.

          • I’m happy to hear that Lawrence 🙂

          • Have you done any exit surveys or A/B testing to quantify if that is actually the case?

            Plenty of people leave a shopping process mid-way, for a number of different reasons.

          • I’ve talked to many hundreds (more than a thousand?) of our potential customers over the years using many channels: some before they sign up, some after they’ve signed up, and some after they contact me telling me that they’ve enjoyed our service but intend to leave for this or that reason. I’ve also talked to our active community members, who’ve tried to convince others to use our services, and have heard the feedback they’ve received. Our actions now are based on all that customer feedback.

  • Hi Carlos,

    The new fixed-price world options will offer you a way to have a 16-region Kitely world for significantly less than the current price of an Advanced World. We’ll provide the full details on June 1 when we launch the new offering.

  • Thank you Carlos 🙂