Based on Dropbox’s S-1 [1], they received $1.107 billion in revenue (2017) and the “cost of goods sold” (COGS) just to deliver those purchased services - excluding software development, sales, marketing, and general corporate expenses - was $0.369 billion, or about 33%. That 33% is basically hosting, support, and devops/SRE (see S-1 page 68 for a detailed description of Dropbox’s COGS).
Stated another way, very roughly, at most 33% of your money went to storage. The real number is probably lower than 33% because the 33% includes support, but let’s use 33% for simplicity.
That means of $100 per year for the 1 TB plan, very roughly[2] $33 is spent on storage. If one wanted to ask “How much less would it cost Dropbox to provide me with 250 GB than 1 TB?” the answer is probably at most 75% of $33 [3], or about $24.
So, if your argument is that Dropbox should offer a 250 GB plan that incorporates their decrease in cost, that 250 GB plan would be priced at about $76/year, not $25.
(These numbers may be a little off because the S-1 doesn’t have per-plan COGS, but they probably aren’t far enough off to change the conclusion. Maybe it’s $70 or $80, but it’s not $25.)
I wouldn’t be surprised to see Dropbox add a less expensive plan, but I’m guessing it would be 10 or 25 GB, not 250, and thatthe plan would be significantly less profitable than their current consumer plan (that is, they’d intentionally ignore the conclusion above). IMO, they’d do so because they thought enough subscribers to this new plan would (a) upgrade to the bigger plan (or business service) eventually, and (b) stay on the free plan forever otherwise. This plan’s entire purpose would be to get users used to paying for something.
Stated another way, very roughly, at most 33% of your money went to storage. The real number is probably lower than 33% because the 33% includes support, but let’s use 33% for simplicity.
That means of $100 per year for the 1 TB plan, very roughly[2] $33 is spent on storage. If one wanted to ask “How much less would it cost Dropbox to provide me with 250 GB than 1 TB?” the answer is probably at most 75% of $33 [3], or about $24.
So, if your argument is that Dropbox should offer a 250 GB plan that incorporates their decrease in cost, that 250 GB plan would be priced at about $76/year, not $25.
(These numbers may be a little off because the S-1 doesn’t have per-plan COGS, but they probably aren’t far enough off to change the conclusion. Maybe it’s $70 or $80, but it’s not $25.)
I wouldn’t be surprised to see Dropbox add a less expensive plan, but I’m guessing it would be 10 or 25 GB, not 250, and thatthe plan would be significantly less profitable than their current consumer plan (that is, they’d intentionally ignore the conclusion above). IMO, they’d do so because they thought enough subscribers to this new plan would (a) upgrade to the bigger plan (or business service) eventually, and (b) stay on the free plan forever otherwise. This plan’s entire purpose would be to get users used to paying for something.
1: https://www.sec.gov/Archives/edgar/data/1467623/000119312518... page F-4
2: This is inferring based on company-wide COGS and revenue, even though COGS almost certainly varies by plan.
3: In practice, the decrease in COGS is probably less because the average usage on a 1 TB plan will be much less than 1 TB.