In Google's case, though, it probably doesn't pay to waste time setting up systems to properly deal with small fry customers. And since the free users are being advertised to anyway, they don't miss out on much.
You're right though. Someone ran the numbers on Spotify (the music streaming service). They charge $15 a month for ad-free listening or you can just use it free. Based on average listener profiles, it worked out at something as small as 1-2% of the userbase needing to pay to cover all the streaming costs involved (from what I recall).
Heh, except Spotify is good enough that most people should be paying for it.. g Barely touch iTunes anymore and don't buy any music as it's nearly all on Spotify :-)
You're right though. Someone ran the numbers on Spotify (the music streaming service). They charge $15 a month for ad-free listening or you can just use it free. Based on average listener profiles, it worked out at something as small as 1-2% of the userbase needing to pay to cover all the streaming costs involved (from what I recall).