In contrast, the case of subscribers is one in which people are paying for membership privileges, and benefits are expected to flow from the payee to the payer. Thus, a different relationship is established from the very beginning. It's true that many AOL members and Wall Street Journal readers are very loyal, but that loyalty doesn't extend to any sense of obligation. GeoCities, Hotmail, and LinkExchange use their membership bases strategically in their efforts to capture other members and other services. All three of these companies are service-based.
Basic services are essentially free to members.
To be a LinkExchange member, for example, I swap ads from my site in order to buy ads from other sites. GeoCities will host a site for free. Hotmail provides free e-mail. At the same time, these companies also provide premium services for which members must pay. The primary function of these premium services, in the short term, is to raise switching costs.