[nichch]

The economics make sense to me. I’ve ran a VPN for 10 (concurrent!) people on a $5 droplet. If I charged them PIA prices (monthly), that’s $95 a month in profit. The insane 3 year or 2 year deals are obviously subsidized by continuous sign ups, meaning constant in your face ad placement is necessary.

I’d even say they’re probably making direct profit from the $2.69 a month plan too. Essentially all VPN providers do is resell bandwidth, just at an insane upcharge in the name of “privacy”.

[Nextgrid]

Running a VPN for 10 people is very different from running a heavily-advertised VPN for thousands of people.

You got away with it because those 10 people are trustworthy and didn't use the VPN for malicious activities (or they managed to fly under the radar).

Now try actually advertise that VPN like the big VPN providers do and see how you fare. You'll get your droplet and entire DigitalOcean account shut down in no time, and the administrative overhead of having to deal with all the abuse reports and support queries will make it unsustainable.

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> The insane 3 year or 2 year deals are obviously subsidized by continuous sign ups, meaning constant in your face ad placement is necessary.

So essentially it's a pyramid scheme then.

[nichch]

I agree that the VPN industry is shady, I agree that the claims they make border on fraud. I was just saying cash wise, these guys have to be rolling in it.

I'm sure there are backhaul providers that will turn a blind eye to constant abuse reports. And since we agree that these companies are shady I can't imagine they have too big of a team that handles these. They probably forward them to users and call it a day. Too many in a short period of time? Close the account.

> So essentially it's a pyramid scheme then.

Of course this is speculation, but it makes logical sense to me. Imagine how many people will sign up for the 2/3 year, use it a lot for the first few months and then just drop off? PIA gets a large payment upfront, on an already high margin business, allowing them to spend insane money on advertisements or YouTube placements, netting them more customers who sign up for the year bundles. Rinse and repeat.