The Price of Freeware Rises
Strapped sites charge developers for placement, sometimes zing downloaders for access.Tom Spring, PCWorld.com
We all know the Internet free ride is over. But one of the holdouts, freeware, also looks like it's headed for the endangered species list.
Small software publishers complain that as the online software distribution business matures, freeware--free downloadable software--is getting squeezed out. And that loss means fewer choices for the millions of end users who download and use free utilities, games, and novelties like screen savers. It also may leave only more expensive alternatives.
Caught in a Crunch
"It's getting to the point no one can afford to be a nice guy when it comes to freeware," says Kathy Salisbury, president of Pharos Games. The costs associated with distributing free software are becoming prohibitively high, say Salisbury and others like her.
Download sites say they're just passing on their costs. Free download sites are buckling to the same economic reality as search engines and portals. With Web advertising down, download sites look to recoup lost revenue through new fees.
Two of the largest sources of downloads, Tucows and CNet's Download.com, now charge software authors like Salisbury to post files in their libraries. Late in 2002, download behemoth CNet began charging $79 annually for a listing. Smaller sites have followed suit. For example, WebAttack.com now charges for premier listings and SimplytheBest.net charges submission fees for some software category titles.
Tucows lists files for free, but charges publishers $500 weekly for premium placement. WebAttack charges between $20 and $30 for priority listings.
"The download winds are shifting for small developers like me," says Richard Joseph, of RJ Software. Joseph is the author of a number of PC time and scheduling utilities. "Most small-time developers are not going to pay to have their software listed at sites," he says.
PCWorld.com's own Downloads library does not charge for software submissions or to host files.
Net Effects
At the same time, freeware download sites are being shuttered at a quickening pace, says Eric Peckham, publisher of the software title Shareware Tracker. Last year, 60 sites dropped from the ranks, he says.
Some of the estimated 250 freeware and shareware sites are even charging patrons. In January, Completely Free Software defied its name, instituting a $5 monthly fee to download free files. A one-year membership costs $15. Download site NoNags.com has introduced a $22 yearly membership fee for full access to its library of downloads. WebAttack.com now charges a $19.95 yearly fee for premium site access.
Even as the costs of submitting, promoting, and distributing files rise, freeware authors can no longer count on advertising revenue to help pay the sites' costs.
"Online advertising used to subsidize the market for free downloads," says Darrell Allen, Tucows' manager of site relations. "But now online advertising is in the dumps and authors cannot afford to give it away anymore."
Allen says economic pressures are forcing some freeware authors to switch to a shareware approach. A shareware application is not free but lets users try a demonstration version of the software for a specified period of time.
Software Superstores
Software developers remember fondly the days of numerous thriving sites that hosted files and invited everyone. But once-popular download sites like Topfiles.com, Softseek.com, and DaveCentral.com have been shuttered, have stopped offering free downloads, or were purchased by competitors.
It's generally accepted that CNet's Download.com and Tucows are the 800-pound gorillas of Internet downloads.
"CNet and Tucows have become the Wal-Marts of the download world," says Mark Koch, president of small application distributor DEK Software International. Koch and others fear that superstores will quash smaller players online, just as in the brick-and-mortar retail world.
"If you don't pay to be listed, you aren't prominent," Joseph says. "And if you aren't prominent, people aren't going to download and pay for your software."
Other developers are loath to pay listing fees. "They are tainting the well that they drink from," said one developer critical of his colleagues.
Some companies are trying other means of promotion. Serif Software gives away older versions of its Web authoring and desktop publishing software, inviting people to upgrade to a fee version.
"We will never pay to have our software given away for free," says Joe Ossai, Serif vice president of sales.
Changing Motives
In the past decade, free software has shifted from a labor of love to big business for software authors. Some used to post a free download for altruistic motives, or to raise a company's visibility in hope that people who liked the freebie would become paying customers.
"People used to develop software and would throw it up on the Web because it was cool and hoped people would use it," says Scott Arpajian, senior vice president of Download.com. "Now it costs you money to be a good guy."
Arpajian says a maturing market for electronic distribution is a huge boon to software developers who now have a low-cost way to reach customers.
Indeed, 90 percent of DEK Software's downloads are from Download.com, Koch says. That makes it worth the fee his small company pays, he adds.
Download.com and Tucows are among the download sites beginning to focus on the blossoming market for electronic software distribution. Arpajian points to an IDC research study forecasting $76 billion in electronic software distribution by 2005.
From Free to Fee
In many ways, the download business mirrors the trend of search engine and Web directory businesses. Web directories like Yahoo have begun accepting fees from site owners to quickly join the index and premier listings. Search engines are promoting premier listings that show up first in search results.
Free downloads aren't likely to disappear anytime soon, say even struggling small software developers. But finding a free downloads will get harder as altruism finds it harder to compete with necessity.