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This is not necessarily a bad business strategy.

At the beginning it can be better to focus on the people willing to pay up front. It allows you to test the market and to focus on the feedback of paying customers.

You can add free trials and optimize for revenue later.

Sure that can't be free - maybe allow free accounts with restricted uploads in size/number? Or even a free trail without the subscription signup that locks the account instead. I'm pretty leery of trails that autoconvert to subscriptions, though using an iPhone makes this less awful.

There are plenty of ways to incrementally provide features to paying users on something like this while still making the base model free.

I think it can work as a subscription, but offering a free trial seems important