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Data and bandwidth are going to be free

The price per megabyte of storage and data transfer is going to approach a per user cost that is less then the value of one advertisement per year. Assume that a typical user generates 5mb of content per day. I may generate more from photos while most of my relatives will generate far less. Over a year that's that's under 2GB of new data.

If we use Amazon S3 as a pricing guide the current cost of storing and uploading 2GB is conservatively about $16/year.

That's not terrible but now consider that while the speed of transistors has been following Moore's law of doubling every 18 months the storage density of drives has been doubling about every 12 months.

This means that 12 months from now the cost will drop to $8... $4... $2... $1 and so on. In 5-10 years we can expect storage costs to be well under a penny for a 1GB of storage. At that price it's essentially free since any add on services or products sold will be far more significant to the bottom line then the actual cost of the storage.

Since content is personal and sticky the companies that will succeed in this space are the ones that can provide such a service today at a loss in order to aquire the customers of tomorrow.

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