The network effects would have not worked, because there are many people that can not afford $10 a year. These people would have used an alternative and at the end everyone would have used that alternative (because network effects).
> The network effects would have not worked, because there are many people that can not afford $10 a year. These people would have used an alternative and at the end everyone would have used that alternative (because network effects).
There must be techniques to get around that. Maybe grant free or discounted accounts if you're connected with enough subscribers? Allow subscribers to gift free memberships to their friends? Maybe have a long "initial trial" (e.g. totally free for 1 year)?
Simply because there's no one objective way to calculate that number. How do you define the total labor force? Do you count seasonal workers? Part-time workers? People who are unemployed but otherwise working age?
I pay for Spotify and Google Play. If either one of them starts showing me ads, they're gone. It's not me I'm worried about at this point. It's my kids.
But it doesn't matter if you lose money on those people. The $10/month easily carries all costs even if 0.1% of users pay and the rest gains them zero. (At least, back when I did the math in ~2015, when they were probably a bit smaller than they are now.)
I believe that was one of the questions Zuck got asked in Congress - why not make paying for FB (and it's subsidiaries) optional in exchange for an ad free, non-data harvesting experience. I get it that many people want the service free and that expense needs to be recouped, but it would be nice to have the option. Perhaps it should even be a legal requirement to have the option.
I think YouTube has something like this (in the US) where you can pay monthly for an ad-free experience?
That makes no sense. People who can't afford $10 a year are not randomly distributed through the world. You can have a North America network just fine.
They used to charge €1/year. It seemed extremely little, but I did the math once and it worked out (around 2015, when they already had about as much market share as they do now in the Netherlands), including things like wages. There was even money left for a Ferrari for every employee. This is assuming that they actually charge everyone by the way, which they weren't (I don't understand why -- it seems cheap enough that even people in a developing countries could afford it).
I too would gladly pay (anything reasonable) if it meant they'd split off from Facebook and become in dependent again.
Because people gravitate to things that are free, especially in third world countries. And not just because they can't afford it - it can be issues such as not having a credit card.
The reason whatsapp got traction in the first place was it was free (for a year+) when SMS was not. If Whatsapp cost $1 then people would use whatever was free.
$10 a month for a messenger? $120/year? How many people do you know who'd pay that?
Back then unlimited SMS cost $10 a month. So why would people pay the same for something which only purpose (back then) was to save cost on SMS?
What's really interesting about this observation is that the problem with the subscription model is exactly that it prohibits perfect price discrimination whereas advertising does not.
BlackBerry was the combo of the handset + the backend services hosted by RIM including BBM and people did pay a monthly fee for access to the latter (over and above regular carrier charges)
