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How well companies that offer something for "free" can do with a subscription option?
When there are so many "free" things on the web, one has to wonder how companies can keep their products up and running (or even if they can manage to get out of beta).
Some companies just don't. They close the service and tell the customers to get out of here:
Personal Media: Bluestring, Xdrive and AOL Pictures will be sunset. These consumer storage products haven't gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation. We have found that building media management applications within the context of a social experience is a more rapid and effective way to grow the business. For example, today the Bebo audience is uploading over three million photos per day. To effectively grow the XDrive online storage business we would need to focus on subscription revenues vs. monetizing through advertising revenue, and this business model is not in strategic alignment with our company's goals. We are exploring plans to migrate our users assets to ensure the best possible transition experience.
This is part of the memo AOL sent out to staff explaning the end of some of their services - including Xdrive an on-line storage service that offered 5 GB of storage free to anyone.
There's a reason why people buy external drives for home or buy Windows Home Server or NAS boxes. First broadband speed sucks around the world. Then the services don't work as expected or not as easily (Xdrive is only one that I know that could be mounted as a drive on your OS so you could just copy things from and to instead of having to open a browser window). And even so it was very unstable.
Which leads me to the next one: the on-line service businesses seem to be quite unreliable - unless they are a subscription service with a SLA, not a freebie. But even so sith happens.
When there are lots of free things, some won't last long.
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