Bookmarked at Del.icio.us for 2007-02-26
Inflation Expectations Are Now Nearly Static

Adverse Selection! What Does "Unlimited" Mean?

Bandwagon of http://ridethebandwagon.com/ estimated that the average iTunes user had some 30 to 60GB of stuff:

What does unlimited mean? - bandwagongroupie | Google Groups: Terence Pua: Based on survey data (months before launch), our research showed that most iTunes users have about 30 to 60GB...

Bandwagon of http://ridethebandwagon.com/ thought that if their average customer had some 39 to 60GB of stuff to back up, they could make money selling dynamic backup services for $99 a year.

But if you have 5GB of stuff, will you pay $100 a year to back it up when $100 will buy you two Western Digital 80GB hard drives? No.

What kind of people will spend $99 a year for dynamic backup services? Terence Pua found out:

However, in a little more than 24 hours after we opened the doors, unlimited means people have as much as 2TB of iTunes stuff! That is an outlier for sure but many people have over 100GB. As you know, we are currently using Amazon S3*, who charges $0.15/GB/month. We charge $99/year for Bandwagon. At that price, people who have over 55GB become a loss to us (and that's not including the bandwidth costs at $0.20/GB).

It's simple arithmetic that if we don't cover costs, we can't stay in business to serve your needs.... We'd like to have a fruitful community-based discussion to help us come up with a more long term pricing/model...

But they are getting some nice publicity out of this.

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