6 ms·

The problem with free (2019)

38 points by pyjamafish 4y ago

smcn 4y ago
By no means a new or revolutionary take but important nonetheless. I do, however, believe that this model is just too profitable to go away. People don't really care about these issues and are instead learning to live in the panopticon.
alexashka 4y ago
This isn't new. The propaganda machine is always free or just about. Free as in we tax you and then give you propaganda we make using your money, but, it's free, because you see, it's 10 steps removed from you having paid for it.
- wawjgreen 4y ago
wmf 4y ago
"Consumer software barely existed just 20 years ago. At that time, it was mostly large enterprise software or companies focused on developing software for professionals." I kinda hate to be that guy but there was a whole store at the mall called Babbage's that sold consumer software. Sure, half was games but there was still plenty of other stuff.
- UncleEntity 4y ago
  I distinctly remember buying consumer software 30 years ago after I got out of the army early and they accidentally sent me an extra paycheck which promptly went to buying a Macintosh.
- pronlover723 4y ago
  There was plenty of commercial software in the 80s as well. Go find some C64, Amiga, Apple 2, TRS-80, Atari 800 emulator online. All of that software used to be in stores on shelves
- _carbyau_ 4y ago
  This rankled me too. I understand the world was different, but "barely existed" ?
  - chinathrow 4y ago
    > "barely existed" Maybe the term is better understood in terms of amount of "offered software then vs. now"?
    - _carbyau_ 4y ago
      It is true that however you measure it there is a lot more software now. But the phrase "barely existed" has connotations of struggle. As though it was close to not existing at all. No one says "cars barely existed in the 1930's" or "humanity barely existed pre 1600" (world population ~0.5 billion). By 1999 consumer software definitively existed and was thriving just fine even if it was comparatively early days to what we have now.
- open-source-ux 4y ago
  There was a thriving market of consumer desktop applications stretches back to the mid-1990s. Windows 95 spurred further growth of consumer software (also far more variety). Perhaps the author is referring to the rise consumer-facing SaaS (Software as a Service).
- Rerarom 4y ago
  Yeah 22 years ago as a young kid I was obsessed with reading the SOFTWARE catalog of my local computer store (the hardware stuff was all video cards that all looked like each other, the software was exciting stuff like space simulators! 3D graphics! video editing!). And this was after the days of https://en.wikipedia.org/wiki/Microsoft_Home https://en.wikipedia.org/wiki/Microsoft_Home were quite over.
- bartread 4y ago
  Yes: this piece kind of lost me with the opening. Consumer software barely existed in 1999? Even ignoring games, have you ever seen the contents of a PC World cover CD? It's all over the map: there was consumer software for every conceivable reason and purpose. Commercial, shareware, PD, and open source were all alive and well - in rude health, in fact - in 1999. Going further back, I remember the 80s. Even the little market town I lived in had at least half a dozen different places you could buy software, and the mail order scene for software, and weird hardware devices paired with software, was very much alive and well. I'd go as far as to say that, budget games aside, mail order was my default mechanism for buying computer software until well into the 90s when online became more prevalent. Chevrolet, of all companies, used to literally distribute a program that was effectively a virtual and deeply pixellated car showroom to consumers in 1987: https://www.youtube.com/watch?v=I89vPzhpNNA https://www.youtube.com/watch?v=I89vPzhpNNA. Consumer software back in the day was widespread, diverse, weird, and wonderful. Going back into the 70s and early 80s, much of the early innovation in consumer software for personal computers, came from the very consumers - the hackers, hobbyists, and tinkerers - who bought them. Remarks like "Consumer software barely existed just 20 years ago" simply come off as out of touch and ignorant of history, which has the effect of undermining the credibility of any other point the piece is trying to make (especially as an opener - WTH?).
gabmartini 4y ago
This is definitely an article that hit (some) right ideas based on incorrect assumptions or an inaccurate historical context. Don't know if I would recommend it to a broader audience. tl;dr: If the product is free, you are the product.
- Jensson 4y ago
  But if you are resistant to advertisements then many products are free for real. For example, free games are "not free" since they push you to buy microtransactions, but if you can easily resist that sort of temptation then the product is completely free to you. This isn't especially rare either, most people playing free games doesn't pay anything for it so for most people those games are really free. So a revised statement would be "If the product is free, some users are the product.", as many users aren't easily manipulated and therefore don't become products.
- UncleEntity 4y ago
  > If the product is free, you are the product. I used to contribute to a GPL licensed program which is apparently doing pretty well in its industry these days and is just free. They pay developers a living wage and have a plug-in ecosystem which also generates income for people to develop them (I assume, don’t know if people live off plug-in income).
- trinovantes 4y ago
  Even if it's not free, you may still be the product (Windows)
  - marginalia_nu 4y ago
    Isn't windows sort of quasi-free these days? They've been aggressively pushing free version upgrades for Windows on me several times.
    - trinovantes 4y ago
      Upgrade is free but you still need an original copy
robbrown451 4y ago
The reason things tend toward free in software... at least consumer software... is that capitalism is really optimized for things that have significant marginal cost. Over time, supply and demand tend to cause the price to approach the marginal cost. (the cost to make one more product) But software has effectively zero marginal cost. Meaning normal competition and the free market just don't work. Say a company makes some software that costs them a million dollars to make. They figure their best chance of making a profit is by pricing it at $100, and selling at least 10,000 copies. Now another company decides to compete as well. It costs them a million dollars as well to develop their competing product, which we can imagine is every bit as good and serves the exact same need. But they figure their best chance of making a profit is to sell it for $10. Sure, they make less per copy, but the lower price should allow them to sell a lot more. So they'll need to sell at least 100,000 copies. That's bad. There is no reasonable way of saying how much value a single copy has. It's not like making, say, a bicycle where the bulk of the price is to cover the marginal cost.... i.e. the cost of making one more bicycle. Anyone developing software must realize that they could be massively undercut by competition. It's just not a stable model. Does anyone remember when Apple's WebObjects product was reduced in price from $200,000 to $699? Then a year later, bundled with the operating system?
- forty 4y ago
  This assumes an infinite market. If you address a market with only 10000 consumers, it's unlikely competition can succeed with prices assuming 100000 sales.
  - robbrown451 4y ago
    It does not assume an infinite market, it just assumes a larger market than your example. Everything still applies if you just adjust the numbers downward or upwards to match whatever particular market you are speaking of.
  - frognumber 4y ago
    The size of the market generally scales with your marketing and distribution capacity. To the point of the original article, smaller companies have a hard time competing due to less reach. That's missing. If I run Disney and can reach 4 billion people, and your 5-person shop can reach 50,000 people, I can either price my product 5 orders of magnitude lower than you, or invest an extra 5 orders of magnitude into development. That's expensive. If I want to comply with Khazak tax laws, provide support there, and reach distribution channels there, I probably want to pay for an office there. That office might have four people, regardless of whether we sell 1 product or 100 products. A lot of what app stores do is provide that kind of reach to all businesses, driving pricing down. Personally, I'm a big fan of government grant funding for free software. It seems like the OS, office suite, video editor, and similar tools ought to have a baseline versions available to anyone for free.
zombiephysicist 4y ago
I have no problem paying for software. The problem is most software is total crap these days. And I refuse to pay subscriptions. There are great examples of stuff I'm HAPPY to pay for. iStat menus, KeyboardMaestro (and I used to love 1password before they went subscription).
- brutusborn 4y ago
  Why do you refuse subscriptions? I always thought they made more sense, especially for software that needs a lot of maintenance.
  - Gordonjcp 4y ago
    Counterpoint - DaVinci Resolve is a professional high-end video editing, compositing, and colour grading package. The free-as-in-beer version omits some specialised tools (like 3D camera tracking and support for timelines larger than 4k resolution), which are present in the full-fat paid-for Studio version. It costs about 200 quid, or you get a licence for it free with basically any of their cameras or edit controllers. Once you've paid for it, you own that copy, and so far in any of their releases your key will work with all the updates. Version 18 is about to drop, and still even a key for 14 or 15 will work just fine. I get that they make their money from selling hardware and Adobe don't, but less than a year of licence fees for Premiere would pay for a copy of Resolve. If you waited 18 months you'd be able to afford the Speed Editor package and then you'd get a cute wee edit controller with a proper jog/shuttle wheel and proper clicky buttons with your licence. The 27 quid a month for a Premiere licence would be one of my larger monthly outgoings.
    - blinzy 4y ago
      If that company, the one that develops DaVinci Resolve, only produced software, would that model of £200 fixed one-time payment be sufficient to be financially viable? Let's say the company's headcount to develop/maintain such software, plus a bunch of other required roles such as marketing, sales, hr, etc., is around 25 people averaging £80,000/year each (not that far off considering employees cost more than just their salary) to make it an even £2 million/year. That means in order to not go bankrupt, i.e. break even, they need to sell 10,000 copies to new buyers every single year. Is that realistic? I don't think so, a company that tries that model will soon go in the red because we aren't even considering other costs that a company has, which aren't negligible. Even if you cut the estimate above in half, e.g., let's say they cost £40,000 each instead, that's still 5,000 new buyers of the software each year. In contrast, a subscription model of £100/year requires them to have 20,000 ongoing subscriptions, which is substantially easier to achieve. I believe there's a reason that a lot of companies have shifted/are shifting to a subscription model, an alternative being monetisation models such as advertisement-supported programs.
plaguepilled 4y ago
Some tangible solutions to the supposed issues proposed in this article: paid technical support for your free product, votes for new features, consulting with companies that have problems your software can solve, and commercial vs consumer licencing.
zokier 4y ago
I feel there is the wider problem that consumer goods are increasingly being separated from commercial/industrial goods, and consumer goods generally are just crap. This is a trend that needs reversing before we can really consider the specifics of software
Gordonjcp 4y ago
- Dan_Sylveste 4y ago
  I think by that they mean software-for-consumers-not-professionals i.e. excluding photoshop, garageband, stuff like that.
  - Gordonjcp 4y ago
    That still makes no sense. Video games existed 20 years ago, are they not software for consumers?
    - Dan_Sylveste 4y ago
      Games are usually categorised as leisure software, not consumer software. Different market sector. For example, in the UK and Europe, game developers were represented by ELSPA (the European Leisure Software Publishing Association) which specifically did not represent non-game publishers. It was ELSPA that forbade the release of non-demo products (i.e. full games) as computer magazine 'coverdisks. Full versions of consumer software could still be distributed as their publishers weren't part of ELSPA.
GRBLDeveloped 4y ago
With the rise of privacy protections like GDPR, I wonder will this emphasise oligopolys. Never thought about it in that context before
dale_glass 4y ago
"Consumer software barely existed just 20 years ago."? I'd say not only it existed, but it existed more than today, if you exclude games. Eg, things that used to be for sale, and aren't really much of a thing anymore: various system tools like Norton Utilities, desktop toys that did junk like animated cursors in Windows 3.1, file compression tools, disk compression tools (Stacker), replacements for the Windows program manager, special purpose tools (PawSense is a funny one), memory managers (QEMM), PartitionMagic, Web browsers (Netscape was a packaged, paid product), mail clients (Eudora), possibly antiviruses (it's my impression that these days Windows Defender does the job) The likes of DOS and Windows 3.1 were barren of almost all functionality out of the box compared to a modern system. If you wanted to get something done legally, you had to buy a bunch of stuff. And then often times you'd want a bunch of misc tools on top. These days pretty much all of that has been absorbed into the OS, or has perfectly good free alternatives, or is functionally obsolete and not really a concept anymore.

38 points by pyjamafish 4y ago

smcn 4y ago

By no means a new or revolutionary take but important nonetheless. I do, however, believe that this model is just too profitable to go away. People don't really care about these issues and are instead learning to live in the panopticon.

alexashka 4y ago

This isn't new. The propaganda machine is always free or just about. Free as in we tax you and then give you propaganda we make using your money, but, it's free, because you see, it's 10 steps removed from you having paid for it.

wawjgreen 4y ago

wmf 4y ago

"Consumer software barely existed just 20 years ago. At that time, it was mostly large enterprise software or companies focused on developing software for professionals." I kinda hate to be that guy but there was a whole store at the mall called Babbage's that sold consumer software. Sure, half was games but there was still plenty of other stuff.

UncleEntity 4y ago
I distinctly remember buying consumer software 30 years ago after I got out of the army early and they accidentally sent me an extra paycheck which promptly went to buying a Macintosh.
pronlover723 4y ago
There was plenty of commercial software in the 80s as well. Go find some C64, Amiga, Apple 2, TRS-80, Atari 800 emulator online. All of that software used to be in stores on shelves
_carbyau_ 4y ago
This rankled me too. I understand the world was different, but "barely existed" ?
- chinathrow 4y ago
  > "barely existed" Maybe the term is better understood in terms of amount of "offered software then vs. now"?
  - _carbyau_ 4y ago
    It is true that however you measure it there is a lot more software now. But the phrase "barely existed" has connotations of struggle. As though it was close to not existing at all. No one says "cars barely existed in the 1930's" or "humanity barely existed pre 1600" (world population ~0.5 billion). By 1999 consumer software definitively existed and was thriving just fine even if it was comparatively early days to what we have now.
open-source-ux 4y ago
There was a thriving market of consumer desktop applications stretches back to the mid-1990s. Windows 95 spurred further growth of consumer software (also far more variety). Perhaps the author is referring to the rise consumer-facing SaaS (Software as a Service).
Rerarom 4y ago
Yeah 22 years ago as a young kid I was obsessed with reading the SOFTWARE catalog of my local computer store (the hardware stuff was all video cards that all looked like each other, the software was exciting stuff like space simulators! 3D graphics! video editing!). And this was after the days of https://en.wikipedia.org/wiki/Microsoft_Home https://en.wikipedia.org/wiki/Microsoft_Home were quite over.
bartread 4y ago
Yes: this piece kind of lost me with the opening. Consumer software barely existed in 1999? Even ignoring games, have you ever seen the contents of a PC World cover CD? It's all over the map: there was consumer software for every conceivable reason and purpose. Commercial, shareware, PD, and open source were all alive and well - in rude health, in fact - in 1999. Going further back, I remember the 80s. Even the little market town I lived in had at least half a dozen different places you could buy software, and the mail order scene for software, and weird hardware devices paired with software, was very much alive and well. I'd go as far as to say that, budget games aside, mail order was my default mechanism for buying computer software until well into the 90s when online became more prevalent. Chevrolet, of all companies, used to literally distribute a program that was effectively a virtual and deeply pixellated car showroom to consumers in 1987: https://www.youtube.com/watch?v=I89vPzhpNNA https://www.youtube.com/watch?v=I89vPzhpNNA. Consumer software back in the day was widespread, diverse, weird, and wonderful. Going back into the 70s and early 80s, much of the early innovation in consumer software for personal computers, came from the very consumers - the hackers, hobbyists, and tinkerers - who bought them. Remarks like "Consumer software barely existed just 20 years ago" simply come off as out of touch and ignorant of history, which has the effect of undermining the credibility of any other point the piece is trying to make (especially as an opener - WTH?).

gabmartini 4y ago

This is definitely an article that hit (some) right ideas based on incorrect assumptions or an inaccurate historical context. Don't know if I would recommend it to a broader audience. tl;dr: If the product is free, you are the product.

Jensson 4y ago
But if you are resistant to advertisements then many products are free for real. For example, free games are "not free" since they push you to buy microtransactions, but if you can easily resist that sort of temptation then the product is completely free to you. This isn't especially rare either, most people playing free games doesn't pay anything for it so for most people those games are really free. So a revised statement would be "If the product is free, some users are the product.", as many users aren't easily manipulated and therefore don't become products.
UncleEntity 4y ago
> If the product is free, you are the product. I used to contribute to a GPL licensed program which is apparently doing pretty well in its industry these days and is just free. They pay developers a living wage and have a plug-in ecosystem which also generates income for people to develop them (I assume, don’t know if people live off plug-in income).
trinovantes 4y ago
Even if it's not free, you may still be the product (Windows)
- marginalia_nu 4y ago
  Isn't windows sort of quasi-free these days? They've been aggressively pushing free version upgrades for Windows on me several times.
  - trinovantes 4y ago
    Upgrade is free but you still need an original copy

robbrown451 4y ago

The reason things tend toward free in software... at least consumer software... is that capitalism is really optimized for things that have significant marginal cost. Over time, supply and demand tend to cause the price to approach the marginal cost. (the cost to make one more product) But software has effectively zero marginal cost. Meaning normal competition and the free market just don't work. Say a company makes some software that costs them a million dollars to make. They figure their best chance of making a profit is by pricing it at $100, and selling at least 10,000 copies. Now another company decides to compete as well. It costs them a million dollars as well to develop their competing product, which we can imagine is every bit as good and serves the exact same need. But they figure their best chance of making a profit is to sell it for $10. Sure, they make less per copy, but the lower price should allow them to sell a lot more. So they'll need to sell at least 100,000 copies. That's bad. There is no reasonable way of saying how much value a single copy has. It's not like making, say, a bicycle where the bulk of the price is to cover the marginal cost.... i.e. the cost of making one more bicycle. Anyone developing software must realize that they could be massively undercut by competition. It's just not a stable model. Does anyone remember when Apple's WebObjects product was reduced in price from $200,000 to $699? Then a year later, bundled with the operating system?

forty 4y ago
This assumes an infinite market. If you address a market with only 10000 consumers, it's unlikely competition can succeed with prices assuming 100000 sales.
- robbrown451 4y ago
  It does not assume an infinite market, it just assumes a larger market than your example. Everything still applies if you just adjust the numbers downward or upwards to match whatever particular market you are speaking of.
- frognumber 4y ago
  The size of the market generally scales with your marketing and distribution capacity. To the point of the original article, smaller companies have a hard time competing due to less reach. That's missing. If I run Disney and can reach 4 billion people, and your 5-person shop can reach 50,000 people, I can either price my product 5 orders of magnitude lower than you, or invest an extra 5 orders of magnitude into development. That's expensive. If I want to comply with Khazak tax laws, provide support there, and reach distribution channels there, I probably want to pay for an office there. That office might have four people, regardless of whether we sell 1 product or 100 products. A lot of what app stores do is provide that kind of reach to all businesses, driving pricing down. Personally, I'm a big fan of government grant funding for free software. It seems like the OS, office suite, video editor, and similar tools ought to have a baseline versions available to anyone for free.

zombiephysicist 4y ago

I have no problem paying for software. The problem is most software is total crap these days. And I refuse to pay subscriptions. There are great examples of stuff I'm HAPPY to pay for. iStat menus, KeyboardMaestro (and I used to love 1password before they went subscription).

brutusborn 4y ago
Why do you refuse subscriptions? I always thought they made more sense, especially for software that needs a lot of maintenance.
- Gordonjcp 4y ago
  Counterpoint - DaVinci Resolve is a professional high-end video editing, compositing, and colour grading package. The free-as-in-beer version omits some specialised tools (like 3D camera tracking and support for timelines larger than 4k resolution), which are present in the full-fat paid-for Studio version. It costs about 200 quid, or you get a licence for it free with basically any of their cameras or edit controllers. Once you've paid for it, you own that copy, and so far in any of their releases your key will work with all the updates. Version 18 is about to drop, and still even a key for 14 or 15 will work just fine. I get that they make their money from selling hardware and Adobe don't, but less than a year of licence fees for Premiere would pay for a copy of Resolve. If you waited 18 months you'd be able to afford the Speed Editor package and then you'd get a cute wee edit controller with a proper jog/shuttle wheel and proper clicky buttons with your licence. The 27 quid a month for a Premiere licence would be one of my larger monthly outgoings.
  - blinzy 4y ago
    If that company, the one that develops DaVinci Resolve, only produced software, would that model of £200 fixed one-time payment be sufficient to be financially viable? Let's say the company's headcount to develop/maintain such software, plus a bunch of other required roles such as marketing, sales, hr, etc., is around 25 people averaging £80,000/year each (not that far off considering employees cost more than just their salary) to make it an even £2 million/year. That means in order to not go bankrupt, i.e. break even, they need to sell 10,000 copies to new buyers every single year. Is that realistic? I don't think so, a company that tries that model will soon go in the red because we aren't even considering other costs that a company has, which aren't negligible. Even if you cut the estimate above in half, e.g., let's say they cost £40,000 each instead, that's still 5,000 new buyers of the software each year. In contrast, a subscription model of £100/year requires them to have 20,000 ongoing subscriptions, which is substantially easier to achieve. I believe there's a reason that a lot of companies have shifted/are shifting to a subscription model, an alternative being monetisation models such as advertisement-supported programs.

plaguepilled 4y ago

Some tangible solutions to the supposed issues proposed in this article: paid technical support for your free product, votes for new features, consulting with companies that have problems your software can solve, and commercial vs consumer licencing.

zokier 4y ago

I feel there is the wider problem that consumer goods are increasingly being separated from commercial/industrial goods, and consumer goods generally are just crap. This is a trend that needs reversing before we can really consider the specifics of software

Gordonjcp 4y ago

Dan_Sylveste 4y ago
I think by that they mean software-for-consumers-not-professionals i.e. excluding photoshop, garageband, stuff like that.
- Gordonjcp 4y ago
  That still makes no sense. Video games existed 20 years ago, are they not software for consumers?
  - Dan_Sylveste 4y ago
    Games are usually categorised as leisure software, not consumer software. Different market sector. For example, in the UK and Europe, game developers were represented by ELSPA (the European Leisure Software Publishing Association) which specifically did not represent non-game publishers. It was ELSPA that forbade the release of non-demo products (i.e. full games) as computer magazine 'coverdisks. Full versions of consumer software could still be distributed as their publishers weren't part of ELSPA.

GRBLDeveloped 4y ago

With the rise of privacy protections like GDPR, I wonder will this emphasise oligopolys. Never thought about it in that context before

dale_glass 4y ago

"Consumer software barely existed just 20 years ago."? I'd say not only it existed, but it existed more than today, if you exclude games. Eg, things that used to be for sale, and aren't really much of a thing anymore: various system tools like Norton Utilities, desktop toys that did junk like animated cursors in Windows 3.1, file compression tools, disk compression tools (Stacker), replacements for the Windows program manager, special purpose tools (PawSense is a funny one), memory managers (QEMM), PartitionMagic, Web browsers (Netscape was a packaged, paid product), mail clients (Eudora), possibly antiviruses (it's my impression that these days Windows Defender does the job) The likes of DOS and Windows 3.1 were barren of almost all functionality out of the box compared to a modern system. If you wanted to get something done legally, you had to buy a bunch of stuff. And then often times you'd want a bunch of misc tools on top. These days pretty much all of that has been absorbed into the OS, or has perfectly good free alternatives, or is functionally obsolete and not really a concept anymore.