In a recent episode of the Backstage Pricing series on Monetizely's YouTube channel, CEO Ajit Kumar analyzes MidJourney's pricing strategy, revealing several critical flaws despite the company's impressive half-billion-dollar revenue run rate. The video, titled "MidJourney Pricing: Flawed Tiers & Missed Enterprise Opportunity," provides an expert breakdown of how this popular AI image generation platform structures its pricing and where it falls short.
Breaking Down MidJourney's Pricing Framework
MidJourney's pricing model consists of three key components: tiers, pricing metrics, and price points. The platform offers four subscription tiers ranging from $10 to $120 per month, with slight discounts for annual payments. The main pricing metric is "fast GPU time," which is essential for understanding how users are charged.
"Mid Journey basically has two modes of operation. One is this relax mode and then one is this fast GPU time," Kumar explains in the video, identifying the latter as the primary pricing metric that restricts usage.
The Unusual Pricing Structure
What stands out immediately in Kumar's analysis is the lack of volume discounting across MidJourney's pricing tiers.
"If you divide 30 by 15, you get $2 per hour of fast GPU time. That's what you get. You get the same thing, $2 per hour of fast GPU time in Pro and Mega," Kumar points out. "That is non-standard. What you would expect to see in a pricing page is that you would expect to see more volume discounting happening as the plan was proceeding towards the higher tier."
This flat pricing structure actually discourages users from upgrading to higher tiers, as there's no cost advantage for purchasing more GPU time at once.
Missing Enterprise Opportunities
Perhaps the most significant oversight in MidJourney's pricing strategy is the ceiling on its plans.
"The packages are limited at $120 a month. But let's say you take a look at 11 Labs pricing. 11 Labs has a $1100 something pricing plan. So that's 10 times the monthly price. And then they have a further enterprise tier as well," Kumar observes.
For potential high-volume clients like Hollywood studios that might need extensive image or video generation capabilities, MidJourney's current plans simply don't provide enough capacity. Kumar suggests this indicates the company is prioritizing high-velocity sales over custom enterprise deals, potentially leaving significant revenue on the table.
Problematic Overage Pricing
MidJourney employs what Kumar calls a "three-part tariff model," but with implementation issues that create friction for users. Once customers exhaust their allocated GPU time, they face overage charges that are double the base rate, jumping from $2 per hour to $4 per hour.
"Not only is the overage fee double, but you have to buy as a user, you have to buy in your console somewhere separately. It doesn't automatically go into overage," Kumar explains. This creates an unnecessary cognitive burden on users and disrupts the natural upgrade path to higher plans.
"The drawback of that is the user would want their usage to continue in such a way that at some point they're incentivized to go to the Pro Plan," Kumar says. "Right now, Midjourney is probably doing themselves the disservice because the user has to enable overages."
Contrasting With Effective Three-Part Tariff Models
Kumar provides a helpful comparison to cell phone plans, which also use three-part tariff models. As users approach their data limits, they begin incurring overage charges that naturally guide them toward upgrading to a higher plan. MidJourney's implementation, however, fails to create this smooth transition path.
"They have a three-part tariff. That is my critique that it is a little bit improperly implemented. And even more importantly, I'm missing seeing like the enterprise plans here," Kumar concludes.
The Bottom Line
Despite MidJourney's tremendous success since its 2021 launch, its pricing strategy contains fundamental flaws that may be hampering both user experience and revenue potential. The lack of volume discounting, problematic overage implementation, and absence of enterprise-grade options suggest that even successful AI companies can benefit from more strategic pricing approaches.
For SaaS executives and product leaders in the generative AI space, MidJourney's case offers valuable lessons about aligning pricing structures with user growth patterns and ensuring that pricing tiers create natural upgrade paths rather than artificial barriers.