In your scenario they need ten times the free users to get the same revenue as one paying customer yields. Presumably, for most services we’re talking about her

In your scenario they need ten times the free users to get the same revenue as one paying customer yields. Presumably, for most services we’re talking about here the marginal cost of having one user versus ten is probably negligable. It doesn’t seem unlikely to me that if a sevice starts charging, 90% of the users drop off, and thus the revenue per user needs to increase commensurately in order to have the same profits. Of course this is totally made up, so it’s impossible to argue about, but my point is that what you described didn’t necessarily seem out of line to me.