Wi-Fi Networking News: MetroFi Switches to All Free
MetroFi offers Wi-Fi-based service across Cupertino, Sunnyvale, and Santa Clara. Its Cupertino and Santa Clara services originally required a monthly fee for mobile or fixed access. When they launched in Sunnyvale, they decided to try whether an advertising-supported model, in which a strip of advertising appears while connected, would provide enough revenue to create a profit on their fixed and per user costs. It did.Works for radio and broadcast television (although there are spectrum scarcity and regionality distortions at work there, too). So, I wonder how I would do with an advertising-based music service? Probably pretty well, margin-wise. That would leave more money (at a lower break-even point) to split with the partners).CEO Chuck Haas said last week, “Most communications business—and MetroFi is no different—is a high fixed cost, low incremental cost business. Your denominator, how many subscribers you have to amortize that cost, is one of the big drivers of that business.” Haas said that his top three per-user costs were customer acquisition, support (mostly to do with billing), and Internet bandwidth. By removing the first two major factors, it’s cheaper for him to offer free service.
Not that any of the labels would consent to their content being given away "for free."
