At a time when users and app developers were furious at Facebook and Twitter for placing advertisers' interests ahead of theirs, Dalton Caldwell–one of the most articulate critics of the ad-based revenue model–launched App.net as an alternative. I wrote at the time that App.net was like a social network from a parallel universe in which Google's business model flopped and everyone realized that you couldn't make money with a free product.
In our own universe, it appears the opposite is true. After dropping its initial $50-a-year subscription rate to $36 in October, App.net announced today that it's going "freemium." That means the platform will allow people to join for free, while retaining meatier features for those who pay up. For now, you'll need an invitation from a paid App.net subscriber if you want in, but it's clear that Caldwell's goal in the long run is to bring in a lot more users. Not because he wants to sell them ads, but because a larger user base would make the site more worthwhile for everyone involved (especially the developers).
When I spoke with Caldwell about App.net's future last month, he told me the switch to freemium doesn't mean he's compromising his principles or trying to vie with Facebook or Twitter for mainstream supremacy. Rather, he has in mind a business model more like that of Dropbox or Github–services that have large user bases but make their money mostly from a core group of power users. In App.net's case, the power users are app developers and others who care enough about the privacy and portability of their social-media content to host it on a site that explicitly prioiritizes users over advertisers.
It remains to be seen how many people will still pay for App.net now that you can get it for free. But Caldwell said the fact that more than 30,000 people have already subscribed, sight unseen, indicates there's genuine demand. Now that people can try it out first, he's hoping more will sign on.
If nothing else, App.net's continued existence should serve as a reminder to Facebook and Twitter that their model of asking users to pay with their data rather than their wallets is not the only one conceivable. And if they keep forcing users to choose between them for access to services like Vine and Instagram, there might be some who ultimately choose neither.