API pricing requires striking a tricky balance between the needs of developers and the cost/profitability of the provider. I am on the boards of several companies that provide APIs as their primary business model, including Twilio, Dwolla and Sift Science and have been in long discussions about the relative merits of pure usage-based pay versus some type of bundle pricing (sometimes also referred to as t-shirt pricing).

This morning Ziggeo which provides video recording, storage and playback as an API has announced their new pricing. It strikes a novel balance by using bundles but also applying the cost of the bundle against actual usage. The bigger bundles immediately give subscribers access to better usage pricing. At every pricing tier developers can also set a maximum to guard against runaway cost should a project suddenly grow beyond expectations. Ziggeo also provides a calculator right on the pricing page so developers can figure out what to expect.

While this was just announced and there will likely be revisions in the future, such as maybe a pure pay as you go at much higher usage prices or a larger free tier, I am excited about this experiment with innovative API pricing. For full disclosure, Ziggeo was founded by my wife Susan Danziger and our friend Oliver Friedmann.