Essentially all the article states is that a profitable business needs to have profits per user that scale according the cost per user acquisition. Viral is cheap acquisition, so profits can be less. Non-viral costs more per user and typically has a smaller market, so profits per user need to scale accordingly.
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.
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.
Essentially all the article states is that a profitable business needs to have profits per user that scale according the cost per user acquisition. Viral is cheap acquisition, so profits can be less. Non-viral costs more per user and typically has a smaller market, so profits per user need to scale accordingly.