Moves to Wean Users Off Its Free Service has experienced tremendous growth over the past year, increasing its customer base by 270 percent in 2009. Now it’s looking to cash in on that growth, as it is taking steps to move the users of its free offering to a low-cost pro version of the service.

Magnify, which offers a platform for video distribution and curation, believes that now is the time for it to ramp up its business as a paid offering. To do so, it will upgrade all non-paying users to a “Pro” version of its service for 30 days for free. If they plan to continue with the Pro version, they can sign up for just $24.95 per month. But here’s the catch: if they choose not to upgrade at the end of those 30 days, Magnify will wind down the account.

In addition to nudging its free users to adopt a paid service, the Magnify will also be raising its paid rates by about 12 percent. Existing customers that are under contract for Pro or Enterprise services need not worry; the prices that they are paying will stay the same until the end of their contract term.

The move to extract more revenues from its users comes at exactly the same time that some other companies in the online video space are chopping prices to compete on the lower end of the market. Brightcove, for instance, announced a new self-serve pricing model in November that was designed to attract more small and medium-sized customers. But Magnify CEO Steve Rosenbaum said in a phone interview that his company is trying to show that its services have more value than some of the competition.

“This is a way to signal that we’re not in a race to the bottom,” Rosenbaum said. “This is us telling the market that the value proposition we provide should not be free or close to free.”

Besides, Rosenbaum says Magnify goes above and beyond just distributing videos. The company’s key differentiator is being able to also curate videos from various outlets around the web, allowing customers to mix and match content from multiple sources with their own. That increases the overall volume of video that is available to the end user, while driving deeper engagement.

It’s a service that not many other companies offer — Vodpod might be its closest comparable — and it’s also a service that’s pretty sticky, for customers and end users alike. However, it’s not clear how many of its free accounts will be willing to upgrade, or for how much. Magnify counts around 65,000 different user sites powered by its platform, but it will be interesting to see how many of those it is able to convert to a paid model. After all, $24.95 is a pretty low barrier to entry, but it’s nothing like free.