Aren't we talking a lot about freemium models here? This thing is going to implode, there is no way it will ever break-even.
There are three requirements any freemium model needs to meet to be successful.
1.) Large addressable market
2.) Minimal marginal costs per free user
3.) Enough features in premium tier to convert sizable portion of free users
I think the only point 1 is met.
Giving 50 GB of free storage to free users is going to cost up to $5 per user per month. That's insane. The cost should be no more than a few cents.
And how many users will ever need more than 50 GB? 0.1%? therefore point 3.) is broken too. Not to mention premium tier pricing is too cheap to make it profitable even without free users.
Mega will shut the door as soon as it runs out of investor's money.
They will replicate their old business model from Megaupload.
Pay people to upload and limit user on download.
Like they did before but this time they cant be taken accountable for what a user uploads to their servers.
Last time they printet money this time they will do it again.
Megaupload was the biggest Warez Hub on this planet and Mega will become the same. They dont care about being legal like Dropbox/Google Drive etc.
It's a race to see what happens first: it runs out of money or has its assets seized by the government agencies that went after Kim Dotcom's last, similar business. The whole exercise is basically a massive middle finger directed at them.
That's the other monetisation problem: people are not going to want to store anything on Mega's servers if they're relying on stable long term access to it, which means they're not likely to pay. Good free storage for your movie downloads though.
Agreed and not to mention that most people won't use anything close to the 50GB, combine that with the deduplication plans they have and you have a very different scenario.
There was a discussion the other day on how this was possible, where a hash would be created and that would allow for both encryption and deduplication. Let me see if I can find it.
Dropbox used to say: "All files stored on Dropbox servers are encrypted (AES256) and are inaccessible without your account password." even though the files were accessible without their account password.
Mega might be doing the same thing: saying one thing to attract early adopters, and changing the marketing language once it gets broader adoption by people who don't care about that attribute. It's dishonest, but it would hardly be shocking to learn that a multiple felon was being dishonest.
Think about that one for a second. An encrypted block is essentially supposed to look like random data. I.e. if two people encrypt the same file with different keys, you shouldn't be able to tell that they're the same file (or your encryption sucks). So your block-level de-duping then depends on incidental matches between random data.
What's the probability of two 4KB (or whatever) blocks of random data being identical? Basically zero even with petabytes of data.
The issue is that you don't get the full benefits of encryption.
If you upload the map to the rayiner family treasure that only you have seen you're good. No one else will be able to read it.
But if you upload the latest episode of Modern Family and Disney gets ahold of the same rip you used they (if they can get a government to help them out) can see what you did and charge you with copyright infringement (or whatever the appropriate crime would be).
After 3-4 years of high-profile CPA-2 attacks on TLS, .NET, Java, and other systems, you'd think we'd all be a lot more skeeved out about cryptosystems that demand known-plaintexts. There's already an obvious conceptual attack (beyond file confirmation) in naive "convergent encryption", which is that you can leverage small amounts of known plaintext to learn unknown plaintext.
In practise any strong encryption (ie, not AES-ECB) is indistinguishable from random noise, and that's by design. Even trying to de-duplicate 4kb blocks of random noise would be a completely fruitless task. If it was possible, storage is probably cheaper than the CPU time to find similar blocks.
They have all the experience to know how to run this business. The monetization will be regulated with bandwidth throttling.
It's typically just human nature to want everything NOW, so they'll pay for instant high-speed downloads. The free tier bandwidth will affect user acquisition and retention. If it's too slow, they'll hate it and never convert into a paying customer. After that, the affiliate stuff will take care of marketing costs and keeps the network virally expanding.
Most bandwidth-heavy sites could use the same monetization model... I think.
I thought I heard that Mega was going to be partially funded by browser extensions that replace ads on third-party sites with Mega-affiliated ads. Is that not actually going to happen? It was the one part of the new Mega that sounded really shady.
Sure, but I think a lot of people have inconsistent opinions re: copyright law. I find it a little odd that people who oppose copyright on freedom grounds have no problem with advertising, even though advertising industry wouldn't exist at anywhere near its present scale without trademark law, which creates far more dire freedom-related concerns.
I'd go further to say that this cognitive dissonance is the product of how money is made in Silicon Valley 2.0: through advertising rather than sales of content.
For what it's worth, I don't think there's anything shady about an extension that replaces the ads in your browser. Web users can already install AdBlock. Or they can hide the ads with post-it notes on their monitor. If that means lost revenue for the ad-based websites, that's a problem with their business model. You can't blame the extension developers for that.
I wonder how much advertising depends on trademark law. I suppose that, without trademarks, companies would advertise their domain name instead of their company name.
While domains are unique, how does it help Prada, Tiffany's, etc? It makes no difference whether the copy-cats are selling rip-offs marked "tiffanys.com" out of a cart. There is also more to trademark that just protecting marks. Trademark protects many aspects of the brand (see: trade dress, dilution, tarnishment, etc).
Companies spend a lot of money advertising because brands are valuable, and trademark basically protects brands. Branding makes goods less fungible, and is really the only reason companies like Prada or Ralph Lauren can sustain such high margins in what would otherwise be total commodity markets. When brands cease to have meaning to consumers, you end up with what you see in the PC industry: a race to the bottom that eats up all your margins.
Why does advertising support so much of the internet? It's a $500 billion industry world-wide, that's why. Without branding, protected by trademark, I think it would be a fraction of the size. And I don't think it would necessarily be a bad thing.
I have a question from another angle: would society be better or worse if Prada/Tiffany's/Rolex etc. could no longer block copy-cat products? The way I see it, trademark law is being used to promote social stratification by inflating the prices of luxury goods. Artificially inflating prices via government monopoly is inherently anti-capitalist and anti-consumer.
Yeah, I understand the value of a brand. I was thinking that, without trademark, there could still be ways to ascertain the authenticity of a product. For example, tiffanys.com could list their physical stores on their website. A fake store wouldn't fool the neighborhood for long enough to be worth the effort.
Ever go to a mall and see all those little carts selling things? You think people go online to verify whether those carts are selling the real deal? What about products purchased online through Amazon, Zappo, etc?
Also, there is a whole world of non point of sale branding. When you give a gift, you pony up for a real Kate Spade bag instead of a perfect knock-off (which are probably made in the same Chinese factory!) You might get those awful D&G glasses with the obvious branding instead of a perfect replica. A lot of the value of branding is rooted in the fact that humans are basically monkeys and we buy products to show the brands off in our social circles. A lot of people would knowingly buy knock-off D&G glasses if they could get the same effect for less money.
Now, I'm not arguing that this would be a bad thing. It'd save parents a lot of money if their kids could show off their "Nike Swoosh" shoes without paying a huge markup for something made in a Chinese sweatshop. But the fact that we can't do that is certainly quite valuable to Nike (and D&G, and Ralph Lauren, etc), and the inability to protect their brands in that way would certainly reduce their incentive to invest so heavily in them through advertising.
You're right. For many branded products (especially clothes and shoes), consumers would indeed prefer to buy cheaper replicas good enough to fool their social circle. If they had the freedom to do so, then yes, Nike would lose much of their incentive to invest in advertising their logo. And yes, that would probably be a good thing for parents. And the only advertisements remaining would advertise quality instead of exclusivity. Or maybe Nike would come up with a way for someone to authenticate someone else's shoes. I don't see how they could do that though.
Am I the only one who just yawned when Megaupload was taken down?
I have no ill-will towards the people who run or use that (or those types of) site, and I don't really like how the government handled the Megaupload thing, but with the proliferation of cloud storage sites hosted by Amazon, Microsoft, Google, Dropbox, etc., it just seems stupid to subject yourself to all the security issues, fake download buttons, ads, etc. that you find on sites like this.
A few months after the takedown I went in search of a particular documentary that I knew existed. It's specific to a small subculture and a particular point in time; to the best of my knowledge it's never been released on DVD and most likely never will be. Arguably it would be no great loss to history if it were gone forever - but it was interesting to me. More than the big, famous things, it's little works like this that make up our culture.
I searched, and searched, and couldn't find it - just hundreds of dead links to Megaupload. There will be a copy in the BBC archives, but will anyone ever see it again? That experience makes me take Mega's side in all this.
(I eventually found it on an fserv that I swear was being hosted on dialup, but that's another story)
MegaUpload fulfilled a very different purpose from those other sites. There were no security issues, that's pure FUD. And you could disable all ads by paying. Or by using JDownloader (free).
The real question is will this become the ad-laden bastion of illegal movies and tv shows that MegaVideo was before it was taken down? While annoying to use, it sure was convenient when you wanted to watch a show or movie that was impossible to buy legally.
It looks like and unexciting competitor for Google Drive, and Google Drive work pretty, pretty well. Sure, it doesn't have the client-side data encryption and the price per GB is higher, but I doubt the Mega email/apps can stand a round vs Gmail/Apps.
From the mega website "Mega are looking for investors". Can someone explain why they'd do that? Kim has more than enough money to cover all of the costs of this site yet he'd rather get investors? I never understood when to use my own money or raise money for my startup.
He's doing his best to be comparable to Google and it provides a thin veil of legitimacy. The core business will still be based around copyright infringement, this is all just "plausible denyablity" in action. Interesting to see how it plays out.
There are three requirements any freemium model needs to meet to be successful.
1.) Large addressable market
2.) Minimal marginal costs per free user
3.) Enough features in premium tier to convert sizable portion of free users
I think the only point 1 is met.
Giving 50 GB of free storage to free users is going to cost up to $5 per user per month. That's insane. The cost should be no more than a few cents.
And how many users will ever need more than 50 GB? 0.1%? therefore point 3.) is broken too. Not to mention premium tier pricing is too cheap to make it profitable even without free users.
Mega will shut the door as soon as it runs out of investor's money.