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There is a case to be made that charging less than $10/month for a service is not good business. People like patio11 make it constantly. The reason is that peop

There is a case to be made that charging less than $10/month for a service is not good business. People like patio11 make it constantly. The reason is that people who pay low amounts are the most demanding in terms of support, and don't actually contribute much to the bottom line. Ignore for a moment that 100 GB is more than you need. Is $10/month too much for you? Well... But you don't need to spam friends, there are regularly things like contests (Dropquest 2011, 2012) where you get free space for completing tasks. And then there's of course the competition.

venus 14y ago
> There is a case to be made that charging less than $10/month for a service is not good business. I don't think so. Just last week I signed up for unblockus.com; $5/month. Every domain name registrar on the planet - $12 a year or so. Full automated services should not be subject to a monthly minimum, and they shouldn't need support. > people who pay low amounts are the most demanding in terms of support Do you really think this would be a big factor for Dropbox? If so - just say any under-100GB account has the same support as the free account. > Is $10/month too much for you? Well no it's not, obviously, since that's what I pay. But I am the only person I know with a pro account, since it's such overkill, and even I kind of resent paying for so much more than I need. I like Dropbox, I want to use it. Just let me pay an appropriate amount for an appropriate usage! > you don't need to spam friends, there are regularly things like contests (Dropquest 2011, 2012) where you get free space for completing tasks I am guessing you are pretty young. You will be amazed at how quickly your tolerance for such things decreases with age. Free space for completing tasks? That does not even make sense, because if you have to complete some task it is obviously not free. How about I just do my job, and buy things I need (like dropbox), and everyone is happy.
- aristidb 14y ago
  > I kind of resent paying for so much more than I need. I wonder if Dropbox might make more money if they charged $10/month for 20 GB, because 20 GB is not more than most people need. (It would be a worse deal, but if the main problem is having more storage space than you need...) > I am guessing you are pretty young. You will be amazed at how quickly your tolerance for such things decreases with age. That is the point. As the value of your time goes up, so should your willingness to pay $10/month. This is price discrimination, with price points of $0 and $10.
  - DeepDuh 14y ago
    I think you might have a point. Only now it's probably too late for them to do that, you can't take away what users already have.
- davidandgoliath 14y ago
  Note, it's unblock-us.com -- and it's a vpn service, not a registration provider if I'm mistaken. Just because an entity exists selling something at $x doesn't necessarily mean it's financially viable. Companies go out of business all the time because they don't charge enough. My company used to sell services at $6 a month and we had 2x the client-base that we have now at 1/10th of the revenue. If dropbox worked on a usage-based billing model they'd never net nearly as much income as they do offering ~100 gigs to users who would barely use ~10 gigabytes of space a piece on average.
  - SafeSituation 14y ago
    Unless I'm mistaken, the previous poster wasn't calling unblock-us a registrar, just referring to two different businesses that charge less than $10/mo.
  - kjemperud 14y ago
    Not very important, but unblock-us.com is not a VPN service, it's a specialized DNS service.
    - davidandgoliath 14y ago
      Very odd in light of their homepage title being 'smarter faster VPN'.
diego 14y ago
The problem for Dropbox is that they use S3. It's really easy to bypass Dropbox entirely and save money, even if you're non-technical. I use Arq on OSX, and pay only for the amount of data I have on S3 (about $10 per month right now). Dropbox's pricing is a race to the bottom.
- flurian 14y ago
  It is cheaper to store 100GB in Dropbox than to store your own 100GB in S3. It would cost $12.50 plus transfer costs to use S3. It costs $9.99 and no transfer costs (besides your own net access) to use Dropbox. Dropbox is storing a lot more than 100GB, so they get bulk prices.
  - mayneack 14y ago
    They also take advantage of a ton of redundant data.
    - diego 14y ago
      Not for me, I only back up my original content on Arq (video and pictures, mostly).
- aristidb 14y ago
  The amount of people who are willing to set up an AWS account, generate account keys, download an external tool like Arq, and set it up to use those keys... No, I don't think that's the biggest danger for Dropbox.
- dagw 14y ago
  For me Dropbox is all about keeping files in sync between different computers and different people, the backup aspect is very much secondary. Any solution that doesn't do cross platform and cross user syncing and sharing isn't at Dropbox replacement as far as I'm concerned. For pure backup there's Backblaze, which is much cheaper than S3
patio11 14y ago
You can make a good business on $10 a month, you just need to be as good as Dropbox at customer acquisition to do it. That is not an easy bar to clear. I agree with the general point, though: coming up with something to accommodate a $23 yearly budget for 14 GB is not a good use of their time relative to, say, finding the next million people who don't think $100 is a lot relative to "all the data my life depends on."
jonknee 14y ago
> There is a case to be made that charging less than $10/month for a service is not good business. People like patio11 make it constantly. The reason is that people who pay low amounts are the most demanding in terms of support, and don't actually contribute much to the bottom line. Well right now they're charging $0 which is even less of a business for the same amount of hassle. I'm in a similar boat, I would like more than 2GB but am not interested in 100GB. Regardless of the money, it's the psychological thing of paying for something that I know I won't use.

venus 14y ago

> There is a case to be made that charging less than $10/month for a service is not good business. I don't think so. Just last week I signed up for unblockus.com; $5/month. Every domain name registrar on the planet - $12 a year or so. Full automated services should not be subject to a monthly minimum, and they shouldn't need support. > people who pay low amounts are the most demanding in terms of support Do you really think this would be a big factor for Dropbox? If so - just say any under-100GB account has the same support as the free account. > Is $10/month too much for you? Well no it's not, obviously, since that's what I pay. But I am the only person I know with a pro account, since it's such overkill, and even I kind of resent paying for so much more than I need. I like Dropbox, I want to use it. Just let me pay an appropriate amount for an appropriate usage! > you don't need to spam friends, there are regularly things like contests (Dropquest 2011, 2012) where you get free space for completing tasks I am guessing you are pretty young. You will be amazed at how quickly your tolerance for such things decreases with age. Free space for completing tasks? That does not even make sense, because if you have to complete some task it is obviously not free. How about I just do my job, and buy things I need (like dropbox), and everyone is happy.

aristidb 14y ago
> I kind of resent paying for so much more than I need. I wonder if Dropbox might make more money if they charged $10/month for 20 GB, because 20 GB is not more than most people need. (It would be a worse deal, but if the main problem is having more storage space than you need...) > I am guessing you are pretty young. You will be amazed at how quickly your tolerance for such things decreases with age. That is the point. As the value of your time goes up, so should your willingness to pay $10/month. This is price discrimination, with price points of $0 and $10.
- DeepDuh 14y ago
  I think you might have a point. Only now it's probably too late for them to do that, you can't take away what users already have.
davidandgoliath 14y ago
Note, it's unblock-us.com -- and it's a vpn service, not a registration provider if I'm mistaken. Just because an entity exists selling something at $x doesn't necessarily mean it's financially viable. Companies go out of business all the time because they don't charge enough. My company used to sell services at $6 a month and we had 2x the client-base that we have now at 1/10th of the revenue. If dropbox worked on a usage-based billing model they'd never net nearly as much income as they do offering ~100 gigs to users who would barely use ~10 gigabytes of space a piece on average.
- SafeSituation 14y ago
  Unless I'm mistaken, the previous poster wasn't calling unblock-us a registrar, just referring to two different businesses that charge less than $10/mo.
- kjemperud 14y ago
  Not very important, but unblock-us.com is not a VPN service, it's a specialized DNS service.
  - davidandgoliath 14y ago
    Very odd in light of their homepage title being 'smarter faster VPN'.

diego 14y ago

The problem for Dropbox is that they use S3. It's really easy to bypass Dropbox entirely and save money, even if you're non-technical. I use Arq on OSX, and pay only for the amount of data I have on S3 (about $10 per month right now). Dropbox's pricing is a race to the bottom.

flurian 14y ago
It is cheaper to store 100GB in Dropbox than to store your own 100GB in S3. It would cost $12.50 plus transfer costs to use S3. It costs $9.99 and no transfer costs (besides your own net access) to use Dropbox. Dropbox is storing a lot more than 100GB, so they get bulk prices.
- mayneack 14y ago
  They also take advantage of a ton of redundant data.
  - diego 14y ago
    Not for me, I only back up my original content on Arq (video and pictures, mostly).
aristidb 14y ago
The amount of people who are willing to set up an AWS account, generate account keys, download an external tool like Arq, and set it up to use those keys... No, I don't think that's the biggest danger for Dropbox.
dagw 14y ago
For me Dropbox is all about keeping files in sync between different computers and different people, the backup aspect is very much secondary. Any solution that doesn't do cross platform and cross user syncing and sharing isn't at Dropbox replacement as far as I'm concerned. For pure backup there's Backblaze, which is much cheaper than S3

patio11 14y ago

You can make a good business on $10 a month, you just need to be as good as Dropbox at customer acquisition to do it. That is not an easy bar to clear. I agree with the general point, though: coming up with something to accommodate a $23 yearly budget for 14 GB is not a good use of their time relative to, say, finding the next million people who don't think $100 is a lot relative to "all the data my life depends on."

jonknee 14y ago

> There is a case to be made that charging less than $10/month for a service is not good business. People like patio11 make it constantly. The reason is that people who pay low amounts are the most demanding in terms of support, and don't actually contribute much to the bottom line. Well right now they're charging $0 which is even less of a business for the same amount of hassle. I'm in a similar boat, I would like more than 2GB but am not interested in 100GB. Regardless of the money, it's the psychological thing of paying for something that I know I won't use.