Why Pay for Premium When Free is Better?

Back when Microsoft birthed MSN, it was seen as a paid subscription service designed to compete with the likes of CompuServe and AOL. As the online world evolved, the nature of online services have gradually changed from a fee-based subscription model to a free, advertiser-supported model: although CompuServe is no more, AOL has broken down its walled garden and is now offering services for free; similarly, Microsoft’s own Windows Live services freely offer the sorts of things people used to pay for every month.

Except…some people still pay for them every month, and Microsoft will still happily take that money. Windows Secrets‘ Scott Dunn points out that Microsoft still offers a $10/month service dubbed MSN Premium, but of the 21 features the service touts, only one of them—a download manager—doesn’t have a direct or near-direct equivalent available for free either via Windows Live or as part of Windows XP and/or Vista.

“It’s not all that surprising to find a software company offering a free equivalent to a competitor’s commercial product,” Dunn writes. “But Windows Live and MSN Premium are produced by the same company.”

Dunn points out that part of Microsoft’s motivation behind creating MSN Premium back in 2004 was to offer a package of services for broadband providers. And, indeed, MSN Premium is still offered by Verizon and Canada’s Bell Sympatico, although Microsoft partner Qwest has since shifted to offering Windows Live services). And Microsoft might be keeping MSN Premium going in part due to contractual obligations to those broadband providers. However, Microsoft has also made a point of saying Windows Live and MSN will continue to be developed as complimentary services, and that the distinctions between them will become more apparent as Windows Live evolves.

Right now, it basically looks like the “evolution” is that one set of services entails a monthly bill, and one doesn’t. On the other hand, Microsoft’s free services often come bearing advertising, and, in the case of tools offered separately from Windows, come with all the technical support users pay for. At least paying customers are entitled to “Free technical support”—which, for users who don’t have tech-savvy friends and family to rely on, might be worth every penny.

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