RapidShare Says Offering Unlimited Free Storage Was The "Wrong Decision"

Online storage provider RapidShare, which abruptly scrapped unlimited storage with short notice to customers, said its decision to offer storage without limits in the first place was a mistake that it regrets.

“It was a wrong decision to introduce the unlimited storage space without any restrictions in the first place,” RapidShare’s CEO Alexandra Zwingli said.  “Furthermore it took me too long to realize this mistake and then to make the necessary adjustments. I genuinely regret that, especially since I am aware that such short-term changes are annoying for all customers, not just those directly affected.”

RapidShare pulled the carpet out from under millions of customers who used their non-premium, free, unlimited storage package by limiting them to just 5GB of free storage.  The company said last week that those users who choose not to pay for a premium account will have all excess files over 5GB deleted forever April 3.  However, RapidShare has extended that deadline.

“In order to give users more time to adapt to the changes we have decided to not start deleting files before April 8,” Zwingli said.  “Starting on that day all affected users will receive a warning email that grants them another 24 hours to delete dispensable files on their own or to store copies of their files somewhere else in case they wish to do so.

Zwingli said that the company had to introduce limits for free users and paying customers because they realized they had a small group of users that were using the service excessively, making it difficult to maintain their service.  However, if free users want to add space by switching to a premium service, they can pay  9.99 euros for 30 days or 99.99 euros per year  for 250GB of storage space. The 500GB storage account costs 19.99 euros per 30 days or 199.99 per year.

Some paying customers that were unhappy with the change and asking for refunds were reportedly being charged a 15 euro processing fee by RapidShare.  Zwingli said that the company is no longer charging any refund-related fees.  She said that customers who object to the current changes are entitled to terminate their contract within a period of 30 days after notification of the change.

RapidShare has lost traffic over the last few months as it continues to adjust its business model.  Zwingli said most of the decline in traffic is caused by an actual traffic limitation they put in place in November in an effort to keep pirate groups away.  But she said some statistics might actually overstate the effect because an increased number of users use their service “RapidDrive,” which allows them to access files directly from Windows Explorer without visiting their website.