Great point about ‘free’ no longer being a differentiator. Anywhere that you have a digital product, there will be pressure to have free access.

Hope all is well.

Great reading. I think the free concept really took off as a means to draw people into the product line where they can be lead up to value add products. Some folks have the service model where the product is free, but the maintenance etc generates a nicely profitable revenue stream.

I notice a lot of application developers offering their product for free on web, but without some killer app features for which you can upgrade and pay.

Is not free music in many cases a sampler to get folks to come and see the show?

Wall Street journal has a good system of drawing you into paying for their content by delivering free snippets via email and other distribution channels – I think it works well for WSJ readers.(WSJ is no longer on my reading list).

One of the biggest challenges you have now though is that free is everywhere and whereas before it was a differentiator, now it is almost a prequisite and you are back where you started – trying to find a great tool to compete.

I agree that perceived value is everything and people may need to try before buying, they are willing to pay for perceived value ( which can be different in each market).

Where to next? The app store at apple showed that volume sales with near free prices works very well (mostly for apple though, not for individual app developers).

My take is that free is critical to draw new customers into your product offerings. Upselling to enhanced features is the next step and steady maintenance stream is long term goal. – not a new model – see the mobile phone operators….how to replicate with your product is the challenge.