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Two Guys Invent Freeware
Prior to the introduction of the IBM PC in 1981, user groups and BBSs
for other computers (CP/M machines, Radio Shacks, and Apples) passed
around user-written software for which the programmers did not expect
any payment, mainly because the programs were small, simple programs
that could not be considered marketable and for which the authors
offered no support. Pre-1980 user groups and BBSs were also notorious
passers-around of pirated commercial software.
In 1982, a couple of programmers, Andrew
Fluegleman and Jim Knopf (dba: Jim Button), had written a couple of
major applications (a communication program and a database program,
respectively) on their new IBM PCs. Not wanting to invest the time and
money in trying to get these applications into stores, they decided to
take advantage of the pirate distribution networks by allowing their
programs to be copied, but putting a request in the program's on-disk
documentation for the user to send money to the author to finance the
ongoing development and support of the programs.
Fluegleman called this Freeware and trademarked
that name, meaning that nobody else could market their software as
Freeware without his permission. This wasn't very good for the new
industry, but the name Freeware wasn't quite appropriate anyway since
the software wasn't really intended to be free.
As had been done with the public domain software
distributed in the 1970's, Fluegleman also distributed the source code
for his program and pretty much lost control over it when dozens of
programmers distributed "improved" versions of Fluegleman's PC-Talk.
While Fluegleman did little to continue to
develop and promote PC-Talk, Knopf did a lot more with PC-File and
eventually built his database program publishing into a multi-million
dollar company. Meanwhile in 1983, another programmer, Bob Wallace,
came out with a word processing program, PC-Write, which he also
developed and promoted into a very successful business.
While there were numerous smaller programs and
utilities, such as Vernon Buerg's wildly popular LIST program, these
three major applications were popular with many major businesses and
established the credibility of Freeware as a source of high quality,
well supported software.
They paved the way for other, even more
successful programs (and tens of thousands less successful programs) to
be marketed the same way.
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Freeware Becomes Shareware
In 1984, I had a column about Freeware and public domain software in a
popular computer magazine. While the Freeware name was widely used, it
was trademarked and could not be legally used by others. The
alternative phrase at that time was User Supported Software, which was
too cumbersome.
We had a contest in the magazine to find a new
name for Freeware. The most popular choice was shareware, which was a
name Bob Wallace had applied to PC-Write.
With shareware being the most popular choice, I
asked Wallace if he had any exclusive claims on the term and he said
no, that he had picked up the name from a column in an old, pre-IBM-PC
computer magazine column.
So the announcement was made that shareware was
the winner. Eventually, as PC-Talk was no longer being distributed, the
term freeware lost its original meaning and in the following years, it
fell into popular usage to mean software for which no shareware fee was
asked, although such software was not necessarily public domain.
Although some people refer to freeware (and even
shareware) as being public domain, the reality is that none of the
shareware and very little of the freeware is truly public domain. Since
a copyright automatically accrues to any software which is distributed,
for a program to be public domain, the programmer has to specifically
label it as such.
Freeware, then, includes some public domain
software, but most freeware is software which can be "freely" used
without payment to the author, but for which the author retains the
copyright to the software.
The Beginning of Shareware Disk Vendors
In 1982-1983, distribution of freeware/shareware programs was free -
done by swapping disks at user groups and by downloading from free
BBSs.
In early 1982, we started a user group called
HAL-PC ("Houston Area League of PC Users"). During 1982 and most of
1983, we tried numerous methods of giving free copies of our shareware
library to members.
But as the volume of programs to be reviewed,
tested and organized grew and the number of user group members and BBS
callers also grew, both software librarians and BBS sysops began
charging to defray the costs.
In California, a fellow by the name of Richard
Peterson, got a copy of the software library of a local user group and
advertised it in PC Magazine for sale for $6 per disk. User group
members and BBS denizens thought this was the equivalent of charging
for free air, but people without access to local user groups or BBSs
welcomed the opportunity to get the software. Peterson called his
company PC-SIG. This was the first company to nationally advertise
shareware disks for sale.
About the same time, my shareware column in a
computer magazine had prompted a lot of people without access to user
groups or local BBSs to write and ask for the programs, for which we
also asked a disk copy fee. When the magazine folded in late 1984, we
continued to get requests for programs and continued to fill them under
the column's name of The Public Library, later adding (software) to the
middle of the name to avoid confusion with our local book library. We
also began publishing the first magazine about shareware, PsL News.
PsL News is a subscription-based publication
containing reviews of all the new and updated freeware and shareware
program released each month. PsL News was printed monthly from the end
of 1984 until March 1996. By that time, shareware diskette sales had
been replaced almost entirely by CD-ROM sales and the printed magazine
was converted to a magazine on disk using the program reviews from the
Monthly PsL CD-ROM.
In the early '80s, we also provided a software
library service for HAL-PC. (It eventually grew to over 10,000 members
- presently the largest user group in the world - with its own offices
and library.) The idea of anyone charging for "free" software
infuriated many of the old pre-PC people, and some authors (including
Jim Button) did not allow distribution of their programs by anyone who
charged for them (although our group was granted an exception by Jim).
However, enough other programs came along to
allow shareware vendors to prosper and eventually, programmers
recognized that the vendors were getting the programs out to a lot of
people who otherwise would have never seen them, resulting in
substantial additional income to the programmers.
In 1985, Public Brand Software was the next
major distributor to start up and was the best of the high-volume
vendors who saturated the market with catalogs. Other high-volume
vendors that followed were Software Labs and Reasonable Solutions.
These companies poured hundreds of thousands and even millions of
dollars a year into advertising shareware.
In order to put out catalogs which could be
mailed economically, most high-volume dealers had only a few hundred
programs in them. At PsL, we had always accepted any good working
program, no matter how tiny the niche it fit into. We had a huge
catalog of thousands of programs. This resulted in a catalog too large
to mail out, so PsL reached fewer customers, but we gave exposure to
thousands of programs which were not included in the catalogs of the
other dealers. In addition, PsL's comprehensive collection made PsL a
popular source of shareware for BBSs and other shareware vendors, both
of whom extended PsL's reach by redistributing the programs to their
users.
So both high-volume/small-catalog dealers and
low-volume/large-catalog dealers (pretty much limited to PsL) had their
place in the shareware market.
While PsL and the high-volume dealers dominated
the shareware distribution market, during the late '80s, hundreds (if
not thousands) of small shareware vendors sprang up. With no real
computer knowledge or other expertise required, anyone with a few bucks
could buy shareware disks from another vendor, print out a "catalog",
and sell copies of those disks to others. Most of these "shareware
vendors" sold at computer shows and flea markets.
The Association of Shareware Professionals
During 1985, I surveyed shareware programmers regarding the formation
of a trade organization. Based on their response, during 1986, I
organized a conference for early 1987 in Houston, Texas of virtually
all of the top shareware programmers (including Bob Wallace of
PC-Write, Tom Smith of Procomm, and Jim Button of PC-File who went on
to become the first ASP Chairman of the Board), vendors (PC-SIG and
Public Brand), and BBS sysops.
From that meeting was formed the Association of
Shareware Professionals, a trade organization of shareware programmers
which later expanded to include vendors (distributors) and BBSs. Thanks
to a lot of effort by everyone involved, the ASP became very successful
and played an extremely important role in the evolution of shareware.
About the time of the formation of ASP,
fast-buck shareware distributors were springing up daily, most of whom
advertised "Get Free Software", much to the chagrin of authors who
expected users to pay, and to the dismay of the users who only found
out about the expected payments after paying the distributor's disk
fees to get the software.
At the same time, programmers had problems of
their own making. Many programmers crippled their software to the
extent that users could barely try it. Some documentation indicated a
belief that all users were cheats and thieves out to steal the
software. Some used silly and unprofessional tactics such as "putting a
hex" on people who used the software without paying. And many
programmers lost interest and quit supporting their programs if they
got poor initial response, leaving users wary of sending payment to ANY
programmers. Finally, users had no where to turn when faced with an
unsurmountable dispute with a programmer.
ASP members got their own house in order first,
agreeing not to cripple their shareware versions, to treat users with
respect, to promise a minimum level of support and a money-back
guarantee. In addition, users who saw the ASP logo on a program could
be more assured that the author of the program was actively supporting
the program and responding to users. Also, users could turn to the ASP
Ombudsman if a dispute with an ASP member could not be resolved.
Another thing that ASP did was to protect the
shareware industry in a way that individual members could not have done
as effectively, if at all. In one case, ASP stopped PC-SIG from getting
a trademark on the word shareware. In another case, ASP got a change in
the wording of a bill before Congress which would have been detrimental
to shareware programmers.
Next, ASP members turned to doing something
about vendors who were misleading customers about shareware being
"free". ASP created a vendor membership with rules for vendors
regarding fair disclosure to customers about shareware and regarding
respecting the rights of programmers.
As benefits, ASP vendors could distribute ASP
programmers' software and received other benefits such as a CD-ROM with
the programs on them.
Additional benefits to programmers included the
ability to exchange information about shareware marketing on the ASP's
forum on Compuserve, a free link to the member's Web page on the ASP's
Web site, a monthly newsletter, and a low-cost way to get members'
software to vendors and BBSs.
The Credit Card Revolution
One problem that programmers had was the difficulty in small mail-order
companies getting credit card merchant accounts. That meant that
programmers could only accept payment through the mail by check or
money order. In those pre-ASP days, a lot of users had the experience
of mailing checks to register shareware, only to never receive anything
or at best, to receive the check back in the mail.
This made users wary of sending payment for
shareware. Shareware users in big companies had another hurdle -
getting a check request approved to pay for a program you already have
is a lot harder to do than to get reimbursed for an expense on your
credit card.
Even if all shareware programmers had been able
to get credit card merchant accounts, most of them had other, full-time
jobs and could not afford the staff to take phone orders all day. In
other cases, some very successful shareware programmers preferred to
continue working on their programs rather than get involved in
day-to-day business operations.
In 1989, PsL began offering a credit card order
service with an 800# and other means to take orders (FAX, email, etc.)
for a small fixed transaction processing fee.
This service, now used by the authors of over
2000 shareware programs, vastly increased the orders programmers
received. Now people could call PsL to order with the security of a
credit card instead of blindly sending a check in the mail. Plus, many
business people could easily order by credit card when getting a check
request approved by their company could be a real roadblock to
registering shareware. In addition, the authors of over 1000 shareware
programs allow registration of their programs via PsL's Web order
service.
Just as anyone could become a "shareware disk
vendor" in the '80s, we are seeing that everyone with a credit card
merchant account and a Web site is getting into shareware order
processing. Many of these have already disappeared, taking the
programmers' money with them, but several have prospered, although some
offer only Web-based ordering, which can be automated and requires
little or no staff or investment, unlike 800# ordering which requires a
significant outlay for operators, office space, etc.
The End Of Shareware Disk Vendors
In 1993, at PsL we saw a rapid decline in shareware diskette sales and
responded by producing a monthly shareware CD-ROM. We started this
enterprise with great trepidation because other vendors and BBSs had
been spending as much as $1000 per month (or more) to get all the new
programs from us each month on floppies, and we were offering the same
thing on a subscription basis for under $20.
To our relief, the CD turned out to be a big hit
even though this was before everybody had CD-ROM drives as most people
do now. In comparison, PC-SIG had been selling a CD-ROM (not a monthly
and not subscription-based) for hundreds of dollars and it still
managed to be one of the top-selling CD-ROMs on the market.
Our timing was good as floppy sales continued to
drop drastically for all vendors and other vendors were closing down or
going bankrupt. PC-SIG shut down abruptly and without explanation,
leaving their magazine subscribers in the lurch. Public Brand sold out
to Ziff-Davis who put out a few more catalogs before giving up on
diskette distribution of shareware.
Between the spread of CD-ROM drives among users
and the availability of countless low-cost shareware CD-ROMs plus the
increasing impact of the Internet, companies distributing shareware on
diskettes have disappeared, although at PsL, we continue to distribute
on diskette to the few individuals who do not have CD-ROM drives.
Changes In Shareware
In the early to mid 1980's, experience indicated that to make money
writing shareware, you had to create a major application for
businesses, such as a word processor (PC-Write), communication software
(PC-Talk), or a database program (PC-File).
Obviously, being the first to name your program
something starting with PC- was considered a status symbol. But other
programmers followed with similar programs with very good success, most
notably the communications program Procomm, whose publishers later took
the program out of shareware and made a fortune. Meanwhile, authors of
games and utilities met with relatively little success throughout most
of the 1980's.
In the early 1990's, competition in the retail
software market was forcing down the prices of major business
applications while the prices of similar shareware programs had been
increasing over the years.
With the growing popularity of Windows and with
major companies like Microsoft offering suites of applications
(integrated word processing, graphics, spreadsheet, database) at
relatively low prices, the shareware publishers of business
applications watched as their sales shrunk.
PC-Write, PC-File, and other major DOS-based
business apps virtually disappeared from shareware while the publishers
of games and utilities became the new leaders in the shareware
industry. Scott Miller of Apogee Software popularized a method of
marketing games as shareware that made games the leading money-makers,
not just in shareware, but in all the software market.
The method involved releasing an
action-adventure game as shareware with only the first few levels of
play. Additional levels of play could only be purchased from the
software publisher, not acquired through shareware channels.
Unlike some programmers' attempts to cripple
their software to force payment, leaving users frustrated and angry
about supposed shareware which could not be completely used and
evaluated, the shareware versions of Apogee's games were complete and
playable so that users got hooked on the games and wanted more.
Doom, Duke Nukem, and Quake are the most successful of the games marketed this way.
Meanwhile, members of the Association of Shareware Professionals, whose
members had agreed not to cripple their programs, modified their stance
to allow time-limiting and other limitations which would allow users to
fully try their programs, while not allowing them to use the programs
indefinitely without paying.
Not all programmers felt the need to limit their
programs, however. Some of the most successful programs, such as
WinZip, prospered with nothing more in the way of prodding users than a
shareware startup screen in which the shareware concept is explained
and ordering information given.
Internet's Impact On Shareware
Online services like Compuserve and America On Line never seemed to
have any impact on shareware distributors and BBSs. Given the slow
modems and higher online costs of the 1980's, it was cheaper and easier
to get shareware on diskettes or from a local (preferably free) BBS, if
you were lucky enough to have one of any quality in your town.
But the combination of cheap high-speed modems
and even cheaper Internet access has caused a significant impact on
shareware. (Although the ever-increasing size of files has offset a lot
of that impact. It is not uncommon to see 5MB-10MB or even larger files
on the Web.)
Internet users are getting the same kind of free
ride as did owners of those large satellite dishes before broadcasters
began encrypting everything and charging them for it.
While not totally free, $10 or less per month
for unlimited access is the next best thing, and is possible only
because the whole Internet system is built on computer systems and
public phone systems for which Internet users do not have to pay the
true, proportionate cost of their use.
While some former disk-based shareware
distributors and pay-BBSs have tried setting up shop on the Web and
charging for access, they are competing with popular sites who
distribute the same programs and charge nothing for access. (Which
would *you* use to get the same program - one you have to pay to join
or one you can get onto for free?)
The free sites hope to make money from
advertising on their sites, the income from which is based on the
number of visitors to the site. A recent issue of Net magazine says
that such sites have found advertising revenues to be less than
stellar. For example, just recently a site called Best Zips, which had
hoped to generate enough ad revenues to support a shareware download
site, had to give up and shut down.
Still, consumer demand appears to be growing for
online ordering with the ability to immediately get an unlock key or a
registered version online without having to wait a week for the mail.
And once a user has tasted that instant gratification, how are they
ever going to be satisfied again waiting weeks for software to come in
the mail?
Copyright © 2000 Public Software Library, Ltd. ALL RIGHTS RESERVED.
PSL and PUBLIC SOFTWARE LIBRARY are registered trademarks.
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