Does method 1 even exist for consumers? Small businesses, sure. But apart from a few gold mines like TurboTax its hard to get consumers to spend any money on SaaS.
Dropbox, Flickr, Apple, etc-- all sell to consumers with a high ARPU. Also, cell providers, insurance companies, car companies, etc.
Good rule of thumb-- anyone who advertises heavily to consumers has a high ARPU.
Dropbox is probably the best example for an app that scaled charging consumers
Sure it exists. Have a services that is free to use but includes charges for one particular highly desirable function. One example is a game with in-app purchasing of new levels, character wardrobe, etc.
evernote, dropbox, rescuetime, pandora, spotify all beg to differ
yes, you find this quite a bit in e-commerce but agree on SaaS