When I was in the process of creating a similar service specially for students I did a lot of research into their freemium model....The findings were pretty clear: the most reliable source puts their conversion at around 4% and and with approximations on growth and a heavily reduced s3 cost there is a point where it stops working - they need to boost their revenue sources.

I have all the projections on my pc, feel free to contact me if you would like to see them.