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Jason Dunn
07-22-2002, 04:16 PM
<a href="http://articles.pocketnow.com/content.cgi?db=articles&amp;id=87">http://articles.pocketnow.com/content.cgi?db=articles&amp;id=87</a><br /><br />Russ Smith has written a column on the evolution from freeware to commercial software in the Pocket PC community, triggered by the recent announcement by the Pocket TV team to charge $49 US for the Xscale-optimized version of their free-for-personal-use Pocket TV MPEG player. I have mixed feelings on this - people deserve to be rewarded for what they do as a service to others. That reward can be money, praise, or just the warm fuzzy feeling they get knowing other people appreciate their work. The question is, will you pay $49 for a video player? Quite honestly, I will not. I'd have no trouble dropping them $10 or $15 via PayPal for a good video player, but $49? No thanks - that's $75 CND, which is the price I just paid for WarCraft III. It would take a Pocket PC "uber app" for me to pay that much. I'll just stick to WMV formats or use <a href="http://www.projectmayo.com/projects/detail.php?projectId=9">Pocket DivX</a>.<br /><br />I do want to add this thought as well: creation involves sacrifice, if nothing else other than time, and someone who is sacrificing has every right to ask for compensation. If you don't want to buy the product, don't buy it - but don't get angry with the creator for asking in the first place. If you can do better for free, do it - but don't complain about it and do nothing. Russ' blurb:<br /><br />"Within the Windows CE community, there are mixed opinions. Maybe we're spoiled by the larger number of decent quality freeware programs out there. Maybe we're put off by the fact that the cost of software can easily add up to more than what we spent on the machine that runs it. Maybe we're just cheap. Whatever the reason, we've come to expect that we should be able to get something for nothing most of the time.<br /><br />Part of this is normal to the evolution of a hardware platform. When the Apple ][ first hit the market, the vast majority of early programs written for it were freeware. That's because the vast majority of early owners fell into the "enthusiast" category. Most of us enthusiastically shared the fruit of our labors. It was a kind of "Look what I did!" approach. As the personal computer became used in more and different environments and, particularly with the advent of VisiCalc and widespread use in small business, freeware and shareware began to take the back seat to professionally written software which cost real money. Some people had trouble making the transition. Some put on eye-patches and began sporting parrots on their shoulders. I was actually apprenticed to such a pirate (apologies to Gilbert and Sullivan) for about a year. I was naive enough at the time to wonder why he needed more than one "backup copy" of his software and why he kept on "losing" them."

tjy
07-22-2002, 04:35 PM
I agree on the $10--15 dollar mark. I don't see any PPC software that is worth $49. So, I will do without.

AZMark
07-22-2002, 04:55 PM
I've said this before but, here goes the rant again!

It's corporate customers! If they buy 100 they expect (and maybe deserve) big discounts. If you start at $15 there is not much left for discount. If you start at $49.00 you end up getting your $15 for the bulk of your purchasers.

If they end up selling zip the price will come down. But with support costs, distribution costs etc. , when a product becomes succesfull the price must go up. And for those of you that say in this electronic age distribution is free, just ask Jason about bandwidth problems.

AZMark

pt
07-22-2002, 05:12 PM
kinda interesting. this was in 1976.

>>

AN OPEN LETTER TO HOBBYISTS
By William Henry Gates III
February 3, 1976

An Open Letter to Hobbyists

To me, the most critical thing in the hobby market right now is the lack of good software courses, books and software itself. Without good software and an owner who understands programming, a hobby computer is wasted. Will quality software be written for the hobby market?

Almost a year ago, Paul Allen and myself, expecting the hobby market to expand, hired Monte Davidoff and developed Altair BASIC. Though the initial work took only two months, the three of us have spent most of the last year documenting, improving and adding features to BASIC. Now we have 4K, 8K, EXTENDED, ROM and DISK BASIC. The value of the computer time we have used exceeds $40,000.

The feedback we have gotten from the hundreds of people who say they are using BASIC has all been positive. Two surprising things are apparent, however, 1) Most of these "users" never bought BASIC (less than 10% of all Altair owners have bought BASIC), and 2) The amount of royalties we have received from sales to hobbyists makes the time spent on Altair BASIC worth less than $2 an hour.

Why is this? As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid?

Is this fair? One thing you don't do by stealing software is get back at MITS for some problem you may have had. MITS doesn't make money selling software. The royalty paid to us, the manual, the tape and the overhead make it a break-even operation. One thing you do do is prevent good software from being written. Who can afford to do professional work for nothing? What hobbyist can put 3-man years into programming, finding all bugs, documenting his product and distribute for free? The fact is, no one besides us has invested a lot of money in hobby software. We have written 6800 BASIC, and are writing 8080 APL and 6800 APL, but there is very little incentive to make this software available to hobbyists. Most directly, the thing you do is theft.

What about the guys who re-sell Altair BASIC, aren't they making money on hobby software? Yes, but those who have been reported to us may lose in the end. They are the ones who give hobbyists a bad name, and should be kicked out of any club meeting they show up at.

I would appreciate letters from any one who wants to pay up, or has a suggestion or comment. Just write to me at 1180 Alvarado SE, #114, Albuquerque, New Mexico, 87108. Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software.

Bill Gates

General Partner, Micro-Soft

Jason Dunn
07-22-2002, 05:18 PM
Wow - brilliant! Is there any wonder why Gates is rich today? The man GETS IT! It's eerie how the more things change, the more they stay the same. It's not a matter of theft in this case, but the last line about him wanting to hire more programs to deluge the market with great software is excellent - I think that's the dream of any hobbyist turned professional. They want to keep doing what they do, but they don't want to starve to death by doing it. :-)

Steven Cedrone
07-22-2002, 05:19 PM
It's corporate customers! If they buy 100 they expect (and maybe deserve) big discounts.

Didn't the folks at Pocket TV already charge for businesses? The free version was for personal use only. Maybe there isn't enough interest on the business front and they need to make up the difference somewhere, but almost 50 dollars? That's a bit steep.......

Steve

Paragon
07-22-2002, 05:21 PM
I have to agree with much of what Jason says. I also believe that software developers should not be expected to work for free. However I think that $49.95 is to high a price for this application. For me this is also $75.00 Canadian. If they feel that this is what they have to charge for their product to turn a profit, so be it. Sometimes things just end up being to high priced by the time they get to the consumer to be a successful.

To go from free to $49.95 in one giant leap is too much for mankind. :)

IMHO

Dave

pt
07-22-2002, 05:28 PM
sure, people will always look for options, others may make a free product, then eventually want to sell that too, it's innovation, it's why it's great to be a human, this is all part of a very cool ecosystem.

for pocket tv, this could be part of the marketing / biz plan. start out high and the group of "alpha" buyers who will buy anything at higher price points will bite. these are the same people that will pay $25 more to get something overnighted. the reason i'll most likely always be in 5 digit debt is because i do that all the time. if i had an xscale device i'd pay the $40, my guess is there are many people like me, enough to justify it.

then after the sales dip at the $40 price point, target the next bucket. also starting at $40 helps bulk sales, when a large company wants 100 copies at %50 discount, it's better for the developer.

it's also demand. there is high demand for xscale apps (at least the perception is by some) it's the same reason newly designed nike shoes are $200 the week they come out, and then they're quickly $150, then $99.

cheers,
pt

marlof
07-22-2002, 05:32 PM
Wow - brilliant! Is there any wonder why Gates is rich today?

Although some say he is rich because with all illegal copies of DOS and Windows he managed to get a PC monopoly, this letter in my opinion proofs this was not the intention at all. This is also described in Hard Drive (http://www.amazon.com/exec/obidos/ASIN/0887306292/103-0946054-0827015) when Gates gets angry about the illegal software tradings at hobby club meetings.

Sslixtis
07-22-2002, 05:37 PM
Blah, blah, blah! You're telling me that they can make PC software for less than $49 but not PPC software? It took Blizzard how many years to make Warcraft III and it costs the same as an Xscale Optimized version of Pocket TV???? Give me a break. AZMark If Corporate market is the problem with pricing, set up 2 versions of the software. Public use = less features smaller price, corporate version = more robust, higher price! Simple as that. There is no justification for trying to charge $49 for a PPC App, excuse me, an optimized version of a PPC App! And I don't imagine there are too many Corporate owners of Xscale PPCs right now either. It seems to me that they are trying to take advantage of the fact that the OEMs screwed their customers by not optimizing their PPCs before they released them. Which is all well and fine as long as they are willing to pay for it, it's part of capitalism after all, but I think they would have done better to come out with a more reasonable price. Something the consumer could see that wasn't meant to screw them yet again with the whole Xscale fiasco.

If the price were more reasonable it would be like saying ok guys this took effort on our part to develope this for you so we need a little compensation. No Problem, Done! However, at $49, it seems to say ok the OEM scammed you the first go round and now you are stuck, so we are going to bleed you some more for making your PPC work like it should have to start with, and we are going to charge you the most we think you can possibly bear. At $49 for optimized PPC Apps it would be cheaper for me to buy a 206MHz StrongARM PPC and wait on MS and the OEMs to optimize my Xscale PPC whenever they get around to it. I have way too many Apps that I use regularly to go around paying that much to have them optimized! You can pick up a PPC 2002 device around $300 brand new most of the time.

ScottNJ
07-22-2002, 05:39 PM
I'd be happy to pay $15-$20 for Pocket TV. But $50!!!! :cry: Is this April 1st?

Bob Anderson
07-22-2002, 05:43 PM
I'm not sure who to credit... but someone once said "Nothing is free in this world." :roll:

Well, guess what? The same applies to computer programs. While I certainly won't pay $49. for the program in question, I bet some other enterprising souls will find a way to deliver the same (or better) product for less! It's called free enterprise!

Vote with your $'s folks... if $49 is too much then don't buy it.

JonnoB
07-22-2002, 06:16 PM
Blah, blah, blah! You're telling me that they can make PC software for less than $49 but not PPC software? It took Blizzard how many years to make Warcraft III and it costs the same as an Xscale Optimized version of Pocket TV???? Give me a break.

WarCraft unarguably has a much larger audience... you have to consider the return on the investment. WarCraft probably cost more to develop, but with a larger buying public, they have more return. It is supply and demand... You know, others could make their own PocketTV if they don't want to pay for it.

Jason Dunn
07-22-2002, 06:25 PM
WarCraft unarguably has a much larger audience... you have to consider the return on the investment. WarCraft probably cost more to develop, but with a larger buying public, they have more return. It is supply and demand... You know, others could make their own PocketTV if they don't want to pay for it.

Very true, but I for one would have bought Pocket TV a long time ago if they charged $10 instead of making it free. Hell, I'd pay $10 just to get rid of the registration process they make you go through every time...I remain convinced that the best price for Pocket PC software is at the "impulse buy" level - make it so low that people won't think twice about NOT buying it. To me, that's sub-$15.

Jimmy Dodd
07-22-2002, 06:54 PM
I remain convinced that the best price for Pocket PC software is at the "impulse buy" level - make it so low that people won't think twice about NOT buying it. To me, that's sub-$15.


I agree as far as we are talking about "impulse-use" software as well - which, to me, this product is. Software that is going to be used daily or for "critical" tasks should demand a higher rate. I pay around $50 for software to track my bank accounts and am glad to do it. The level of support I've been given, the frequent updates (free, usually), and the level of quality makes this a great deal for me.

I would much prefer limited time, full featured trial software to let me get a good feel for the software's value, rather than a low "impulse-buy" price. There have been plenty of downloaded trials that didn't meet my needs and went to the recycle bin quickly that I would have regretted wasting the $15 on. I like "impulse-downloads," not "impulse-buys."

---
Bwana Jim

sundown
07-22-2002, 06:59 PM
The sweet spot for me for PPC software I use occasionally is $10-$20, depending what it does for me. There is no way the PPC version can compete with a desktop software version in features so quite frankly I expect the PPC apps generally to cost less. Like that fitness program posted last week. I think it was $12.95 or something. Piece of cake (no pun intended) to buy and I barely will notice that missing from my wallet. $50 I'd notice for sure.

Justify the high price of some PPC software all you want but if it seems to high, I'm not buyin.

heyday
07-22-2002, 07:06 PM
The most I've paid for PPC software is $29 for Hexacto Tennis Addict...... way too much.

Forget Pocket TV and just use Pocket Divx.....

heyday

vetteguy
07-22-2002, 07:15 PM
If anyone's interested, I have been involved in a thread with PocketTV Team over at Brighthand about this very topic. http://discussion.brighthand.com/showthread.php?threadid=54824 (PS, I'm vetteguy). And if someone already linked to this in this thread, sorry, I didn't see it!

JonnoB
07-22-2002, 07:31 PM
Very true, but I for one would have bought Pocket TV a long time ago if they charged $10 instead of making it free. Hell, I'd pay $10 just to get rid of the registration process they make you go through every time...I remain convinced that the best price for Pocket PC software is at the "impulse buy" level - make it so low that people won't think twice about NOT buying it. To me, that's sub-$15.

I have heard it several times about the 'magic' in retail pricing strategies... where there is a perception of you get more if you pay more.. and where certain dollar figures like $39 vs $29 is a huge psychological leap, but $9 to $19 is not even though it is double. The difference between $99 and $109 is by percentage very small, but mentally, the 3 digit figure turns people away. Question... if $10, would they sell 5x more copies than if they sold at $50?

In principle, I agree that most average PocetPC apps should probably sell in the sub-$30 range. In the case of PocketTV, I think the downloadable version that is now free would be widely purchased at $5-10 and then a premium version at $30-$40. I would venture to guess that many PocketPC manufacturers would even consider an OEM bundle license of the software at $1-$5.... it is that useful!

It is not an exact science and I think that they are way off in going from $0 to $50... but they made the software, so they get to choose! I just hope that they make enough money to keep innovating... setting a successful pricing strategy is a hard thing to do.

bjornkeizers
07-22-2002, 07:54 PM
To me, the "barrier" lies at $30. For that same reason, I'll never buy full price software; not even for PC! I usually wait untill the hype passes, then I'll pick up software at a price *i* think it's worth.

Besides, Pocket TV is OK, but nothing ground shattering. I mean, Ziosoft's SimCity... Now that's worth $30; and even that's relative: I can pick up a "classic" version at the local toystore for perhaps.. $2! Why bother with the PPC at all? Same goes for Need for Speed..

Getting back to Pocket PC. Now if it were priced at $15, it'd be reasonable. $25 would be justifiable if I used it daily. But allmost $50!!! What are you people thinking?!?!

0 to 50 is nice, but only when we're talking Porsches.. not software products.

AZMark
07-22-2002, 08:10 PM
OK--- I'm still buying for corporate america. I don't need the extra features of the corp edition. Sell me the personal version for $15.00,,,ok now what's the price if I want 100?

You can not set up a version just for personal use. Corporations are treated leagly as people. If you sell it to John Q. Public at $15 you have to sell it to me Joe Corp at the same price.

denivan
07-22-2002, 09:00 PM
0 to 50 is nice, but only when we're talking Porsches.. not software products.

Sorry to just repeat you, but I thought this was a really great quote ;-)

Ivan

Sslixtis
07-22-2002, 09:17 PM
Let me rephrase, you sell John Q Public the "player" at $5-$15, you sell the deluxe player with VGA out support and all the bells and whistles at $49. See what I'm talking about now? John Q. Public doesn't need all the crap that John Q Corp does and if they want it then they can buy the Corporate version themselves. I don't see that as being unfair in the least!

bitbank
07-22-2002, 11:29 PM
I've spoken at length to Tristan about the pricing of software and he has some valid points. If you create a piece of software which has many options, must support many different devices/files and is generally complex you will have 2 problems:

1) Bugs
2) Usability, compatibility & "user" issues

Both of these issues will cause support calls which take time. If you sell this product for $5 and have to respond to many emails and phone calls, the time drain takes away any profit. Another option is to declare that you will support the software in a very limited way. If you give the product for free to end-users, then they will not be upset when they don't get excellent support from the developer.

The reality is that your program will probably need the same amount of support whether you sell it for $5 or $50.

These are complex issues to juggle for developers and users alike.

I think low priced software is a good idea as long as the users understand they will get limited support.

Larry B.

Sslixtis
07-22-2002, 11:53 PM
bitbankIf you create a piece of software which has many options, must support many different devices/files and is generally complex you will have 2 problems:

1) Bugs
2) Usability, compatibility & "user" issues

Both of these issues will cause support calls which take time. If you sell this product for $5 and have to respond to many emails and phone calls, the time drain takes away any profit.

Agreed, but with a stripped down version such as a Private or Consumer version that is just the basic player, you get rid of the many options/bugs requiring less in the way of support and can again justify the $5-$15 price model. What really bothers me is that the Pocket TV Team are saying that having an optimized player should only be offered as an Enterprise Edition. Lets face facts, most companies as yet don't have Xscale, the primary market right now is Joe Schmuckatelli that wants to watch a little video on his lunch break or show off some little clip to his friends. That doesn't require all the extra features an Enterprise Edition would. So why not charge him a reasonable price for the Player only version and make the Deluxe Enterprise Edition with all the extras available to business and the die hard Video Junkies. I really like Pocket TV, I use it to show off the video capabilities of my PPC but not at $49. The Enterprise Edition may do everything but tap dance but if I'm not going to use those features then they really don't factor into my buying decision.

Rob Alexander
07-23-2002, 02:21 AM
OK--- I'm still buying for corporate america. I don't need the extra features of the corp edition. Sell me the personal version for $15.00,,,ok now what's the price if I want 100?

You can not set up a version just for personal use. Corporations are treated leagly as people. If you sell it to John Q. Public at $15 you have to sell it to me Joe Corp at the same price.

Sure, a corp can buy a personal edition, but nothing says you have to offer them a volume discount to do it. The correct response to your question above is, "There is no quantity discount for the personal edition, but if you buy 100 copies, then for the same $15 per copy, I'll upgrade you to the corporate edition for free." Or whatever other offer you want to make. It's called 'negotiation'.

As to what they are doing, I agree with Jason's original post. It's certainly their right to charge $50 for the product and I won't complain about them doing it. But I would never pay that much for this product.

bitbank
07-23-2002, 03:19 AM
Sslixtis,
I basically agree with you. I myself have sold software with 2 versions: limited and full. The model basically works, but the majority of my sales are for the full version, so I guess people prefer to not buy the "limited" products.

Ekkie Tepsupornchai
07-24-2002, 05:21 AM
I'm not sure who to credit... but someone once said "Nothing is free in this world." :roll:

Well, guess what? The same applies to computer programs. While I certainly won't pay $49. for the program in question, I bet some other enterprising souls will find a way to deliver the same (or better) product for less! It's called free enterprise!

Vote with your $'s folks... if $49 is too much then don't buy it.

Well said... the comparisons to Warcraft III make me chuckle b/c surely Warcraft III provides me with far more entertainment and personal value than a PPC video playing app, but this is a supply and demand market... it has nothing to do with intrinsic value. PocketTV knows they have the only legitimate MPG player and that people buying into XScale have video capabilities high on their list of "gotta-have" items.

Would I pay $50? Heck no! I hardly think anyone will, but it reminds me of that company that tried to sell PPC versions of Adobe Acrobat readers for some outrageous price (like $75 I think?). Adobe has since come out with a freeware version and I'm sure the 3rd party vendor is feeling a bit dopey now. They could have made tons more money had they sold it for something like $10-$15. Now no one in their right minds would buy that.

In time, either someone else will come out with the same thing or PocketTV will have to lower their prices. Here's hoping no one bites on this price!!

Ekkie

Garry [WMA]
07-24-2002, 10:01 AM
As a developer/publisher I can see the dilemna.

The market is very difficult at present and its incredibly hard to recoup development costs.

Take for example SuperAlert our program which amongst other things fixes repeating alarms for ppc2002. We sell this currently for 9.99. Now even at that price some people have argued it is too expensive but at the current level of sales (which are healthy for a ppc program) we will not even recoup our development costs until the middle of next year.

Realistically to make a reasonable return on investment we should charge about $40.

We've been in the very fortunate position of being able to fund some of our consumer development out of our consultancy but with the current market conditions this is not substainable.

So we are left with a dilemna. A market which will not support pricing above $20 but a development community which will struggle to make a return on quality product at that price.