???E-mail is a good analogy to the video business. So, if you look at the e-mail industry, the consumer e-mail business has always been one where the core products are given away for free. So, you look at Hotmail and its competitors like Yahoo and Gmail, and then you look at the business side of e-mail. You look at Outlook and you look at its competitors. That???s always been a very good and very profitable business for Microsoft."
An alternate way to look at things, is to ask the question, "Why is it that telecoms can extract $50, $60, and greater from consumers every month, yet MS has not figured out how to do make consumers pay for its services." I believe MS should apply tier pricing to Skype, leaving the current level of service free. MS should then enhance the base Skype service and bundle other services with for fee. I still think MS should have an 'all you can eat' bundle of consumer services which would appeal to a large swath of consumers. Everything from emagazines, to enhanced VOIP and other Skype services, to music / TV subscription, etc.
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