There are lots of free services that are sustainable, because the cost of delivering them is less than the amount they earn through advertising or premium users

There are lots of free services that are sustainable, because the cost of delivering them is less than the amount they earn through advertising or premium users. There's no ponzi scheme aspect to that. (Google Search, Twitter, Facebook, etc.) Even if you're paying for something, it can still go away. There have been lots of paid services that failed, both online and offline. (Kozmo.com, Saab, Webvan, Hostess, etc) There are sustainable free services, and there are unsustainable paid services, and often companies don't know what category a product falls into until years after it's been released.