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Freeware to carry a price tag

Site owners look for ways to recoup costs

It looks as though the internet free ride is over as one of the last bastions of gratis online content, freeware, is headed for the endangered species list.

Small software publishers are complaining 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 screensavers.

Caught in a crunch

"It's getting to the point [where] no one can afford to be a nice guy when it comes to freeware," says Kathy Salisbury, president of gaming website Pharos Games. The costs associated with distributing complimentary software are becoming prohibitively high, say Salisbury and others like her.

Free download sites say they're just passing on their costs, and are finally buckling to the same economic reality as search engines and portals.

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 asking an annual fee of $79 (about £50) for a listing. Smaller sites have followed suit. For example, WebAttack.com now charges for premier listings and SimplytheBest.net imposes submission expenses for some software category titles.

Tucows lists files for free, but publishers must pay US$500 (about £300) weekly for premium placement, while WebAttack requires between $20 and $30 (about £15 to £20) for priority listings.

PC Advisor's own Downloads Directory does not currently charge for software submissions or to host files.

Net effects

Some of the estimated 250 freeware and shareware sites want their patrons to pay. In January, Completely Free Software defied its name, instituting a $5 (about £3) monthly fee to download free files. A one-year membership costs $15 (about £12). 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 subsidise the market for free downloads," says Darrell Allen, Tucows' site relations manager. "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.


Changing motives

In the past decade, free software has shifted from a labour 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.

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 $76bn profits (about £46bn) in electronic software distribution by 2005.

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.


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