The site will simply not operate with large margins like other sites. The cost of keeping the servers and development running will be covered by a premium plan that's targeted to heavy users.

Isn't storing and serving terabytes of stuff pretty expensive? How many heavy users do you think you'll manage to win over in the first place, much less convince them to pay for the privilege of uploading their 100GB of illicit car diagnostic software to your website? Do you have an actual niche you plan to target?

I don't mean to be negative, it's just that I've seen the transition from free to freemium to ad-supported to Rapidshare to dead happen over and over again. These services don't seem to operate with large margins - from the outside, it looks more like all of them are on the brink of bankruptcy.

A few years ago bandwidth and storage was much more expensive than it is today.

Rapidshare was a service that had to swiftly and reluctantly change their business model. They were operating out of large offices with over 60 employees and due to the change they saw a sudden drstic drop in revenue.

Rapidshare's financial information isn't public since it's a private company, but one could argue whether they were actually losing money or not making the profits that they expected at the time of the shutdown.

I think Rapidshare earned tons of money. At one time RS was the go-to filehost for pirated material. They had almost anything you wanted, and they seldom removed files.

Then came the FBI raid against various filehosts. I remember few of the other hosts got taken down and charged, while others shut their site down as precaution. I remember Rapidshare starting their decline during this phase, something tells me Rapidshare did it on purpose and 'ran away' with the earned money before the feds got them.

Well thats my theory :)

This is a misnomer, as bandwidth gets cheaper, file sizes get larger due to technological advance. Think about the average size of a photo from 2006 and from 2016.

I generally see prices of 2 cents per gigabyte per month for active storage, even less, most under half a cent per gigabyte per month for long-term archival. Assuming there were willing to fork out 10 dollars a month, they would be able to get around a terabyte of storage.

Lets imagine our average citizen uploads quarter of a gigabyte, that means 4,000 visitors uploading files per $10 client. Assuming you can keep other costs really low, it's not too outrageously expensive.

You're forgetting the transfer / bandwidth costs.

But also offsetting credits from dedup.

Not with encryption