Ever since Yahoo decided to
give away a terabyte of photo storage for Flickr, we’ve been bothered by a nagging question: If Yahoo can afford to give us a terabyte for photos, why not a terabyte for other stuff, too?
Web-based storage has blossomed into a big business.
Dropbox is the leading independent consumer cloud storage company. It grabbed a $US4 billion valuation from investors. It offers 100 gigabytes per year for ~$100. Apple, Microsoft, Google, Box, Hightail, and many others also offer cloud-based document storage at similar prices.
Watching these companies grow while charging $US100 per year for 100 gigabytes seems weird considering Yahoo is offering 10X the storage for free. And, to be fair, Yahoo’s 1 terabyte is mostly just marketing. Google+ has unlimited storage for photos. So does Facebook.
What is it about photo sharing that gives users so much storage for free while documents are so much more expensive to hold onto? And why wouldn’t Yahoo just make everything free to stuff in Flickr?
We recently spoke with someone working in the consumer cloud storage industry. Our source said the economics of Flickr’s 1 terabyte of data are “insane” because Yahoo is going to have to pay for servers, and other stuff to maintain Flickr as usage grows.
We asked this person about the incongruity of Flickr offering lots of photo storage for free versus Dropbox charging for storage.
This person explained to us that it’s a business model issue. Photo sharing can be monetized through ads (in theory) because they generate lots of pageviews as people share and flip through the photos. Storage of documents, and other files that aren’t going to be seen over and over don’t generate the same amount of page volume so advertising won’t work.
Plus, for documents, there’s something psychologically reassuring about paying for the storage instead of relying on advertisers targeting you based on your files.
So, if you were expecting (or in our case hoping) that Yahoo would eventually just extend its free storage of photos on Flickr to all documents, it seems unlikely to happen.
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