What to choose: freeware, shareware or payware?

Question

A few years ago I've developed a program that has a steady group of users. It became quite popular and now we have close to two million downloads on Download.com.

At first I provided the application as freeware to reach as many users as I could, but there is server costs and of course it would be nice to receive a bit of money in return for your effort.

I'm looking for a way to gain reasonable revenue from my freeware application, but still make a bit of money. Here's my experience so far (current in bold):

Xacti.com : Low revenue and it took me a lot of emails to eventually get my money.
OpenCandy.com : Friendly, revenue is ok, good online overview of your downloads.
InstallMonitizer.com : We're testing with them right now, revenue seems higher and a referral program.

Another option would be to switch to shareware (let's say 30-day trial based), but I think that would cost me a lot of users. The offer screens are harmless in my opinion.

What do you use for your software (opensource, freeware, shareware)?
What are your experiences so far?
What would you accept as a user?

Update 28/12/2011:
Number of installs is still increasing with InstallMonetizer: http://www.installmonetizer.com. The bundle automatically checks for the best match in geographic location and revenue.

For some applications we see $1.00 per US download! Many other countries are supported as well. It will take a bit more time to update all of our mirrors.

I'll keep you guys posted.

Answer 1

Another option is to leave the shareware as it is (or lower it's functionality), and add an option to pay to unlock additional features.

Answer 2

On devices like Android and iPhone, it's not uncommon to see two versions of the same application.

• The first version costs a small amount of money.
• The second version is completely free to download and use, but has advertisements at the bottom of the screen.

I really like this approach because it gives the end user a choice in how they want to pay back the author. I think you could do the same thing for your application.

Android apps use AdMob (also available on iOS). Most iOS apps use iAd.

I wish I knew a desktop advertisement system, but maybe someone can leave a link as a comment if they know any.

Answer 3

Advice °1: Support gives revenue - Painless

Advice °2: Put your documentation on multiple webpages with ads - Painless

Advice °3: You could change the users start page to your customized google start page with ads below. Eg. Google.Mysite.com - this will be criticized by advanced PC users

Advice °4: Add a donate page that lets users do additional stuff, eg. customize the window coloring or let them do something fancy. (and put the big donate button on every screen). Or let people have auto-updates, if they have donated to the application. No, donation => just a notification --> painless

Or if they have donated > 5 €, they have an in-app contact developer button for support.

Advice °5: The options you choose ;)

Answer 4

Just to throw in another option:

Beg

Ask upfront for donations. Throw in a sob story about server costs. If even a fraction of your user-base feels some amount of debt to you for providing software and a service to them for free, then you can reel in revenue fueled by their guilt.

It depends on the nature of your product though. If there's little interaction between you and the users, then any form of nagging or begging will put them off, which largely influences charitable nature. Also if your target demographic simply doesn't have disposable income, or isn't old enough for a credit card or paypal, you're SOL.

Answer 5

Perhaps a bit late and perhaps may not apply to your apps but one form of payment I once saw I found to be a nice balance.

A game on Android (Robotek by Hexage to not name it directly) uses a scheme where you get the full game for free. They would try to get revenue by either selling a High Definition of the game (same functionality but nicer image) but in this case they provided means to get shortcuts in the game play by purchasing bundles that translate as in-game currency. (Same effect could be reached in-game by spending a bit more time in training missions)

Many other game makes are doing this but what was different in their case is the approach. First they did not limit the game should you decide not to pay (subtle difference here though between limiting non paid and enhancing paid) and secondly they were quite open as to the reason for this was to support their effort. Of course having support for in-app payment makes this a lot easier.

I guess you could say the perks were intended as perks to thank you for your support.

One could say it is a "perkware". Located somewhere in between the begware and the shareware on the B-ware spectrum. (pardon the pun, could not resist !)

PS: I am not associates with Hexage in any way, just though their idea was nice and enough on topic to share here.

Answer 6

Consider the following steps:

1. Make your application freeware. Allow customers to see what your full product is like and get a feel for it.
2. Stop free updates. Customers who currently have the product can keep it. But make all other updates come with a price.
3. Slowly limit functionality of the users who originally owned the freeware and didn't update. For example, if they still have an older version of your application, they can't get Tech Support. Think of a way to make them think "Wow, now I have to buy it!".

Boom! Easy money. Of course, this requires patience, but it will definitely be worth it.

Answer 7

Can you get free hosting? I know that some hosting companies will offer you hardware to host open source software. A tip jar on top of that may lower you costs to almost nothing.

If you wanted to sell it, I would sell support for the software. Much better revenue stream IMNSHO.

Answer 8

How about limiting the licenses in some way. Say, free for personal use and open source use, but $X for commercial use. This is pretty common.

And

... but I think that would cost me a lot of users

They aren't paying anything, so you aren't really losing anything.

Answer 9

If you don't plan to change product type from freeware (which I would suggest) then one thing you can do is find investors/advertisements to include in your product. You can show advertises in splash screen and on top/bottom strip of your application or somewhere else where it will not harm user experience. This way your product will remain in freeware and you can also earn money from advertisements. (But it is too hard to find/convey people to pat money and give us their advertisements.) - This is what we generally do.

Answer 10

Have you thought about contacting some of the developers of other software your clients use or may be interested in? Perhaps you could set up a pay what you want bundle, a la the humble bundles.

It doesn't have to be just games you know.

Answer 11

You could also do the shareware model where you put up a message after 30 days telling them their trial is over and they need to do x to purchase. Give them the ability to dismiss the dialog and continue to use the product as they see fit (i.e. don't degrade the functionality).

It should be a light weight solution for you to implement. It's also not very annoying to customers. You might be surprised at the number of people that will pay you to use the product nag free. I think win-rar uses this model (or at least they used to).