Subject: Economics of software distribution
From: nick@NSIS.CL.NEC.CO.JP (Gavin Thomas Nicol)
Date: Wed, 17 Mar 93 11:54:09 JST

>> Sooner or later though,
>> someone *will* make applications with mass-market appeal (I know,
>> because I have plans to do exactly that), and rather than make money
>> from the software per-se, they will make it from selling manuals,
>Copylefted?  If not, why not?  If so, I guess they will have to compete on
>production quality with copies made from them?

  I hope so, though I imagine PDS and shareware will be there too.
  As you state, they will have to compete on the quaility of copies
  made from them.

  Actually, when I last visited New Zealand, I was *amazed* at the
  penetration of PC-SIG shareware... at $25 a pop for a disk in a
  vinyl bag. No printed manual etc. 

>> or teaching people how to use it (in-company training courses such as
>> those for Excel). 
>That's exactly the kind of labor-intensive activity that I don't see
>working out in the long run.  I guess I could summarize the point of my
>previous message as follows.  If you are being paid only for your time,
>then you have to make enough money on your paid, labor-intensive
>activities to pay for *both* the rest of your life *and* the time you
>spend writing software that you distribute for no more than cost.  The
>free software ethic seems to demand this.  But this seems to imply that
>authors of free software have to charge higher rates for those
>labor-intensive activities than people who pay for those same activities
>with the sale of "unfree" software, or else be motivated by idealism and
>be willing to accept less reward for the same quality of product.

  Well, I think most people who write free software are idealists. 
  Basically, I think it would be impossible to make any money from
  just the software you write for the mass-market. Rather you'd have
  to make money by:
       a) Integration. Finding the best system at the best price,
          and making it all work together. (This would be mostly to
       b) Packaging: Like PC-SIG. Get the software, print the manuals,
          package it, and sell it. (This could be a big market I think
          because most mass-market customers *don't want* to be
          bothered doing it themselves.)
       c) Service/maintenance/training: Labour intensive, and the pay
          would probably be low.   
  and write the software as a hobby, or with the aim of improving the
  market as a whole: or in other words, for no direct returns.

  Of course, in a), b) and c), everyone will be competing, so even if
  you write good software, you might not be able to make it in the
  mass-market. One thing that I have thought about, is a publishing
  company which would pay authors royalties for their software. If
  there was such a company, and it was large enough, it could make
  money because it could afford good marketing which would in turn
  amount to good sales. Perhaps such a company could distribute
  software under a GPL like system, but add a "6 month,
  non-competition" clause, requiring that the author, and the people
  who purchase such software, refrain from direct competition for 6
  months. After that, anything goes. I think it is a reasonably
  realistic clause. How do you all feel about it?

>I'll be looking forward with great interest to free software products
>targeted to the mass market of PC users.

Me too. I can see a vast potential in all the PDS, Shareware, and
FreeWare available. Not in selling it, but in the programming talent
it represents. Imagine if *all* that talent went into creating a free
set of application software! As it is, I think the talent pool for
FreeWare is growing rapidly now that PC's are both cheap and powerful
enough to run sophisticated programs.

Still, for every piece of FreeWare, there are probably 1000 ShareWare
and PDS items available, without source. But as momentum builds, and
as time goes by, such software will become available, it is
inevitable. The question is: who will wake the mass-market to the
benefits of FreeWare? Education is also important here.