What you are actually paying for with a VPN

A VPN is a relay. Your traffic arrives at a server, and the server sends it on to wherever you were going. The answer comes back the same way.

The provider pays for that capacity. The bill scales with how much you actually use. How many accounts exist doesn't set it.

Most consumer software enjoys the opposite economics. Say you stream video through a tunnel for six hours a day. You can cost a provider many times what you pay in subscription. Someone who connects twice a month costs almost nothing.

Averaged across enough people it works, which is why the price can be low. It also means a provider is quietly hoping most subscribers are the second kind.

That's worth knowing when you read an 'unlimited' claim. Unlimited is a bet on how people behave. It isn't a statement about capacity.

A location costs money to offer. Each exit is a machine in a data centre somewhere with a monthly bill attached. That bill arrives whether a thousand people route through it that month or nobody does.

That's why the server counts in marketing material are a poor guide to anything. A provider advertising thousands of servers is describing a cost structure. It isn't describing a benefit to you. You use one at a time, and what matters is whether a good one is near you and not overloaded.

It's also why a smaller list is a defensible choice, and nothing to be embarrassed about. A short list of properly provisioned locations will serve most people better than a long list where the capacity is spread thin.

We run a deliberately short list for this reason. It means some regions have no nearby exit at all. That's a real limitation. The location pages cover it honestly, and we don't hide it behind a headline number.

If you subscribe inside an iPhone or Android app, your payment doesn't go to the provider. It goes to Apple or Google, who keep a commission and pass on the rest.

How big is the cut? The exact share depends on the programme the developer qualifies for and how long you've been subscribed. Either way it's a substantial fraction of the headline price. It's no rounding error.

You never see this, and it changes the arithmetic considerably. Suppose you pay $3.99 for a subscription in the app. That isn't $3.99 of revenue. The provider covers bandwidth, servers, support and development out of what's left.

It's also why some providers push you to subscribe on their website and skip the app. And it's why in-app and web prices sometimes differ for the same product.

An annual subscription is a single billing event, a single customer-acquisition cost, and twelve months of certainty. A weekly subscription is the same acquisition cost spread over a week, with more billing events. And that customer may well not return.

That's the honest reason the industry is built on annual plans with heavy discounts. It's also why finding a VPN sold by the week is harder than it should be. The long plan is better for the provider, and the discount is how you're persuaded to take it.

There's nothing sinister in that. It's ordinary business. But it does mean the pricing you're shown is designed around their cash flow. It isn't designed around how long you actually need the thing.

Selling by the week, and on Android by the day, is a worse business on this axis. So why do we do it? Because most people who want a VPN want one for a trip.

Suppose you need a VPN for a one-month trip. On an annual plan, you'd be paying for eleven months you won't use.

Run the arithmetic backwards and the problem with a genuinely free, genuinely unlimited VPN becomes obvious. Bandwidth has to be paid for. If you aren't paying, someone else is.

That leaves a short list of possibilities. The free tier is bounded so the cost stays small. Or it's a loss-leader funded by paying users. Or the traffic itself is the product.

That last option is the one to watch for. A provider who can see where your traffic goes, and who isn't being paid by you, has an asset and a reason to use it.

This isn't a claim about any particular company, and it isn't an accusation. It's simply the only other way the numbers can work. It's worth asking of any free service that doesn't visibly limit what it gives away.

Our free tier takes the first route: three one-hour sessions a week, with no device limit. Each hour runs from when you connect, whether or not you stay connected. For example, connect for ten minutes on Monday, Tuesday and Wednesday, and that week's free sessions are used up. Those limits exist because hours are what cost money.

What you get is a bounded amount of the real product. It isn't a degraded version of it. That's a different thing from being generous.

Strip away the marketing and your subscription pays for a fairly short list. Here it is, in rough order of what each item costs a provider to deliver.

Which provider claims the most? That's the wrong question. The useful one is whether the price they're charging can plausibly cover what they're promising. And what would they have to do if it didn't?

Suppose a provider charges very little for unlimited bandwidth. They're subsidising you from somewhere, or limiting you in a way the pricing page doesn't state, or counting on you not using it much. Any of those can be fine.

The point is that the money has to come from somewhere. A provider who's straightforward about where is telling you something useful about how they'll behave when the numbers get tight.