Why do people think software should be free?

When I was at Apple yesterday, I was describing Posterous and our upcoming iPhone app to many people. Everyone asked me, “How much does Posterous cost?” It’s free. I think people at Apple don’t have an expectation for free software like people on the web do. At a traditional software company, you build something, then you charge for it.

 But people have a hard time paying for software these days. Google has definitely led the way in providing great free alternatives to desktop software, that have become the de facto tools for most users. That’s great, but makes it harder for new companies to charge money. Users aren’t willing to pull out their credit cards on the web (unless it’s at Amazon.com).

 And I never hear about people purchasing traditional desktop software, other than creatives who need Photoshop, Final Cut Pro, or other professional tools. This is partially because most machines these days come with great software (iLife, iWork).

 The exception to all this is the iPhone. The distribution model is magnificent. Every iPhone owner has an iTunes account, and every iTunes account has a credit card on file. Most iPhone owners probably already had one for buying music at the iTunes music store. So now these same people have an iPhone and can buy $0.99 applications with one click. Zero friction, it just appears on your iTunes statement. Even my mom does it. (This, btw, is the same on the Apple TV and it’s brilliant)

 I wonder how many people are buying software for the first time ever, now that Apple has made it so easy.

23 comments

  1. I think your thoughts are generally applicable to almost any sort of online content these days. In a way, I think the internet got started off on the wrong foot where people have this Pavlovian expectation that anything on the net ought to be free to the end user. Hence the predicament for many companies trying to make it on the Internet — they feel like they can’t charge which leaves advertising as the only alternative. Hence the troubles faced by great news services like the New York Times, services which cost tons but are delivered "free" to the end-user.But why should this be the case? If something is useful to me, I ought to pay for it. Simple. It’s the way it worked for grandpa. I’m practically begging the NYTimes to start charging me — I’d happily pay because I can’t live without it, and if they eventually go under, my world would be less happy.

  2. Software is free because competition forces it to. There is still quality software that charges you money out there. Macs are the same case. Apple has protected their products from competition with a different philosophy- I am cool and I give quality so you pay me what I want you to pay. Compared to the NYtimes, which I like to read ofcourse, is being tear down by competition of several things- other newspapers, blogging (personal publishing) and TV News channels. I want to pay only for the quality content. But nowadays, it comes free. So why pay?

  3. The idea that apps should be free of charge online is just an ingrained notion from the early days of the WWW. I’m all for developers being compensated for their work but I’ll pay if something is of value to my needs and usage. Unless there is a free app that does the same thing or better then I’ll try it first and if is no good or missing features then I’ll pay for the comparable app. I just bought the iLife ’09 since there are no free apps that compare. Since there is competition for Twitter apps, I can’t see any reason to pay 14.95 for Twitterrific for an ad free Twitter app since I can use TweetDeck or the website free of charge for the same services. BTW, Sachin and Garry, do you guys have plans to write a Posterous app for Palm’s WebOS? I’m considering getting one.

  4. Hey Brad. We’re definitely working on an iPhone. The Palm WebOS is my second favorite platform, but it’s too early to say if we would write an app for it. Depends on if it’s good or not. And if it ships šŸ™‚

  5. Sachin, yea I understand that. It’s very early but the hype is killing me, lol. I would definitely use the iPhone app but I’m just not a 100% sold on an iPhone so far even though I love Apple. Keep up the great work.

  6. When Mummy buys me an iPhone, I’ll definitely blog with Posterous, okay Mister Posterous? I asked for one some weeks ago but she keeps saying the iPhone’s too big for my hands. Hogwash, I say! Please get my old lady to buy me one, Mister Posterous?

  7. People Do purchasing traditional desktop software. I have successfully run a small software company the last 8 years. If no one bought traditional desktop software, we would have closed our doors years ago. The sheer fact where like anyone else with a job. I can not put food on my families table giving away products for free. It really comes down to marketing. All business have to market well to sell and make a profit. It does not matter if your selling software or toasters. No marketing plan equals no or low sales. Bad marketing also equals low sales. The iPhone model shows bad or no marketing everyday. If you follow the store close, you see this; guy publishes app, sets price point lets say 4.99 sits for a week see minor sales of maybe 25 units sold. Waits another week sees another 15 units sell. Guy gets frustrated, drops price point to 2.99. Now that guy dropped price his product got top listing on BarginBin, there some exposure. Guy now sells 50 units. Guy thinks hey this is it, drop the price. The free listing on barginBin is now gone. Week four guy sells 15 units, guys frustrated again. Now guys drops price again. This happens over and over until guy gives away the app for free.The sheer fact, Guy never marketed his product at all. If a product is marketed correctly It sells and makes a profit. The other fact is selling software is like investing into stock like energy. It will not make millions overnight. You need to stay in for the long haul. Over time an product will sell, and keep selling. There no get rich quick model that works. The oversight of not marketing your product is the downfall of successfully making money off the product and all your hard work.

  8. Really great to hear that people are still paying for traditional software. I hear about it less and less. What kind of software do you build?

  9. We focus on productivity. Saving people time and money by making solutions for time consuming complex operations. We find many people like to turn there work from days into seconds. We feel good that we can make products that help other be more productive in there daily life.I think you do not hear about what people buy, more so than what they found free. It like they can not belive this product they found was free. The message FREE hits the airwaves in masses. Free does that, the word gets out fast. A paid solution takes marketing on behave of the bussiness selling it. You may get lucky every once in a while with word of mouth or a review from one of the trade rags. Free will always overshadow paid. Anyone will take free if it is avaiable, even if they do not need it.I just do not get how anyone can survive life with no income. How many people go to college thinking hey, I will work for free when I join the workforce.

  10. I totally hear you on the marketing required for paid software. You really need to get the word out and convince people it’s worth the money. You can’t rely on word of mouth not only for the reason you mentioned ("Free" hits the airwaves harder) but because something that is free simply will have a larger user base, so you have more people talking about it.<div><br></div><div>But that’s fine, if you are charging for your product, you don’t need a huge user base to be successful. 100k paid customers is better than 10 million non paying ones, even though the 10 million will get you more buzz on twitter and other media.</div><div><br></div><div>There are so many products and services out there that save you time. But sadly I think many people don’t put a monetary value on time and would rather do something inefficiently than spend money to make their lives easier.</div><div><br></div><div>I know i might be overly liberal in being willing to pay for services that save me time (major things like accounting, minor things like laundry). But I think there should be a middle ground where people realize paying for services is a good thing, and worth it to them in the long run. You say people are paying for software, and I hope you’re right.<br><div><br><div><div></div></div></div></div>

  11. I let you in on a little secret. Cross platform development. Do not skip over the mac market. We found the Mac user base buys way more, and will pay more than the windows user base for software. Witch seems odd because there more windows users in the world than mac users. Apple already did all the hard work here for developers to succeed. Apple marketed the mac to people that spend money in the 1st place. Look at the Apple product line. Apple makes throw away products. Laptops, iMacs, iPods etc. These products are not really upgradeable. Want to upgrade an apple product? You throw it away (or sell it on ebay) and buy a new one (every 2 to 4 years).People willing to do that are willing to pay for software more. Our customer base is 100 to 1 mac users over windows users. That is pure amazing, when macs market share is much smaller than the windows market share.

  12. yep, i’m a mac user and have read many times that mac users are more likely to pay for software. It makes perfect sense. Windows users are willing to put up with crap to save money (Dell + Windows + malware) and Mac users are willing to pay more for a better experience.

  13. I’m a PC. PC users think of themselves as buying software I think. When you order a PC from Dell or wherever, the amount extra you pay for MS Office means it’s about the single priciest component of the whole machine."Google has definitely led the way in providing great free alternatives to desktop software, that have become the de facto tools for most users."This might be true in the Valley, but when I talk to my parents, my friends at church, and other less techy people, I hear a different story. For them, Google is a search engine and that’s about all. They’ve heard of Gmail and Google Maps, but for creating documents Microsoft Office is still the standard. Google’s free alternatives to desktop software are still seriously niche. Most people who have to write letters or track their expenses have never heard of them.

  14. Gaining mass market traction seems to be one of the most obvious motivations behind free. Ad-based revenue models like google would be the most obvious.I think those are the types of businesses that initially launched free, and now its something that people expect.Hopefully this little credit crunch will force a change in thinking šŸ™‚ ads can’t pay for everything, and frankly I don’t like seeing ads everywhere.

  15. google and FB pretty much killed charging for webapps model. Apple’s software is super cheap compared to what you get, even iphone apps are cheap. Apple is a hardware/media/telecommunications/software distributor company these days rather than a true software company..one can argue they were never were. You can still charge for IP; movies, music, video, and online services but webapps…unless it’s for enterprise forget about it. Colleges kids are all about free apps. $5 for a drink, no prob, $5 a month for FB….no way.

  16. <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"> <meta content="text/html; charset=UTF-8" http-equiv="Content-Type"> <title></title> "google and FB pretty much killed charging for webapps model."<br> <br> Oh dear, somebody better tell 37Signals.

  17. I guess you’re right. Anyway, the day you’ll decide to ask me some money for posterous services, I’ll pay for them, but if you’re not going to, for me it’s ok

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