You can follow Don’s advice by visiting the Mozilla Add-On Workshop mashup page, and hopefully videos of all presentations will be available before long.
Yup, I’m back from the Mozilla Add-On Workshop (MAOW) in Berlin, and recovered from my 11 hour journey home. A special mention must go to the baggage handlers at Stockholm Arlanda airport whose heroic efforts allowed me to savour an unexpected 3 hour addition to my journey: my luggage’s progress from plane to collection belt vividly evoking, as it did, the great glacial movements that helped to sculpt this fine peninsula.
My own contribution to the MAOW was probably summed up by this sympathetic portrait of community legend KaiRo, attempting to get his presentation to work:
The one talk where I would like to have contributed more was probably Daniel Glazman‘s on making money with add-ons. Without rehashing all the talk, Daniel was essentially proposing that addons.mozilla.org (AMO) needs a system for micro-payments (he was proposing around $1 / download I recall), so that add-on developers can charge for their works. I should make it absolutely clear that I am not part of the AMO organisation, and I should also make it clear that Rey Bango, who is, is totally committed to enabling whatever makes sense for add-on developers.
But still, my personal opinion is that such a micro-payment system is not a recipe for success for developers, users, or Mozilla as a whole. Firstly, today there is no truly widespread payment system that users will easy use for 1-click purchasing on a new install of Firefox. Requiring registration to a payment service before a user can fully use AMO seems an uncomfortable arrangement to me.
Secondly, how would you price such software? Daniel was suggesting a figure of $1 for a good add-on. I would estimate that even in the affluent west, that is already enough to make many users search further to find something of approximate functionality, and that pricing would need to be much, much lower to ensure clicks (if such a system even existed). Moreover, for the many Firefox users in the developing world, $1 is not a micro payment. And there is a great wealth of add-ons today (over 4,000, soon to hit 5,000). As Daniel pointed out, if you area not near to the top of a search, you might be invisible. However, if you are successful in achieving visibility for your add-on, pay-for-play immediately incentivises the user to search further if their first results.
Thirdly, how are you going to compete? If you are producing open source add-ons, any add-on which achieved traction would be subject to forking. We would probably need to be talking about closed-source add-ons. And this would inevitable need some license key mechanism, as Daniel indicated. Again, uncomfortable.
Fourth, what kind of license would you be selling? How committed would a developer have to be to forward compatibility to sell and add-on?
Now, all these questions can all be answered to a greater or lesser state of satisfaction, but the likelihood of gouging a successful business out of such an arrangement seems pretty thin to me. Let us consider two perspectives.
One, every business today which relies upon charging for access to something which has no marginal (or opportunity) cost of unit production (software, music, information in general) is facing a challenge in the face of the network – rightly or wrongly, long established businesses which are charging for access are in difficulty. The App Store on the iPhone may buck this trend, but it does not invalidate it. The Internet is eroding all of these business models, even the ability of television networks to command exclusive audiences for sporting events (to Don King’s dismay, one presumes).
Two: software is not intrinsically valuable, not in monetary terms. Anyone who has attempted to rate the value of software using the COCOMO methodology realises this. Software’s value is a function of its usage. If one placed market values on Windows, UNIX, Linux and Mac OS X, their relative values would not have a direct relationship to the quality of code, but to the profile of their usage.
So, how do we make money with software? Well, we should consider what you can monetise software against, and a good rule of thumb is to monetise against something that does have an (implicit) cost of unit production. If you want to make money with software, charging the user for a copy implies either a heavily locked-down system (as Daniel suggested in his talk), an entrenched market position (such as the ability to have software bundled), or both.
But there are other ways to make money from software. In most cases, I would suggest we might think of a way to offer access to a service via an add-on. Allowing users the benefit of particular running infrastructure over time clearly has an associated cost that they may be inclined to pay for. Many free services (Gmail, Twitter) even allow such access for free, and make money by displaying adverts to users (in the case of Gmail) or by raising capital by the sheer promise offered by millions upon millions of users (in the case of Twitter). Twitter does not yet have a clear business model, after all, but you can bet that Jack Dorsey has done alright. In these straightened times, VC opportunites may be fewer and further between – but there certainly are many other online commercial opportunities that do exist and could capture more market share with add-ons. Considering an add-on like CoolIris, I can imagine being certified compatible with the add-on would be worth money to those sites whose value is based on offering up image-content.
And so I do not agree with the advice that add-on developers should attempt to build something cool or, in the parlance of our times, “shiny”, and then try to make money by selling access, at least, not if they want to earn a good living. The result may be the coolest piece of software that no one has ever heard of. And let us not forget the power and influence of those that scratch their own itch, or even those great souls who enjoy scratching the itches of others. Freely available software will always command a consumer’s preference in an open system.
I hope we can have a good debate about what developers need from AMO, and those who wish to build, or augment a business using AMO, can get their points across and feel their needs are met, just as those who wish to build free / gratis software hopefully will. A big thanks to Daniel for raising the topic and addressing it so squarely.
I mulled all this over on the way home, until I managed to find somewhere selling English newspapers at which point I needed to switch my attention to controlling the pedantic rage that burns inside with the intensity of a thousand suns. Sadly, I failed. And so I offer this picture. I am sure that Mr Gough’s own writing is most illuminating, but, copy editors note, it is hard to take recommendations from an author seriously when they include incorrect spellings of pronouns.
5 thoughts on ““Ich bin ein Berliner! If you can’t be on the scene, get it on the screen!” – Don King”
I hope that you recognize the earning a living is a significant issue that needs to be resolved for the Mozilla community to really flourish. One thing that the rapid growth of the iPhone store shows is the power of a clear marketing channel to rapidly attract a large number of talented developers. Also, if you look at Open Source software in general, and Mozilla in particular, I think it is clear that it is very hard to have successful FOSS projects that don’t figure out a way to pay their developers.
I’m surprised by your belief that $1 is a significant price. That is the traditional price for a song – but someone can easily have hundreds of songs, that are regulary replenished by new ones. Most people have two to three orders of magnitude fewer extensions applied. I would expect that $5 – $10 is more appropriate for a significant application. Maybe $1 is OK for a small added feature. Also, businesses can pay more typically. Email (where I develop) is a critical business application.
As to the third world countries, I’ve lived there (and started a business there) so I have a pretty good feel for that. The same people who are likely to be using software, are also buying mobile phones, and paying the same price that we do for computers. Internet access is often more expensive than in developed countries. People will pay for what they value, regardless of the GDP of the country that they live in. Third-world developers will care more about monetization, because they may have a whole extended family depending on their income for food and medical care.
Interesting comments. First, I want to be clear that I definitely recognise that it is a significant issue, which is why I am keen to contribute to the discussion: I think about this a lot. My blog may tend to be flippant, but I do not regard the issue as a trivial one – quite the opposite. (I should also make it clear that I am probably less connected to Mozilla policy on AMO than you are!)
You raise a completely new dimension, which I hadn’t really considered in this blog, (and which I do not think Daniel was really discussing either at MAOW), which is business applications for Firefox. I tend to think that businesses will be much more inclined to pay for add-ons, and part of this will be compatibility and other maintenance (like a Red Hat model). I think you are totally right that this is a viable channel for add-on developers. I do not think that an App Store charging small payments for access to add-ons is the best way to get this adoption though, although I confess I do not know what I think is the right answer.
As for $1 per add-on: I think it is significant because of the effect I think it is likely to have on the user. I suspect they will look for a different add-on first. I do not think it is comparable to iTunes in that respect, although I admit this is the plural of anecdote, i.e. not data. Possibly if users were dead-set on a specific add-on, which had an established brand etc., then they would install it without looking elsewhere first… I am thinking of AMO as it is, not what it might become.
I am sure that the relative cost of IT in second and third world countries is higher, and yes, people will pay for what they value. For one thing, I suspect that demand for network access in the poorest countries is relatively price-inelastic. But similarly, the utility you offer people will be balanced against what the automation offers them. To take an example, if I pay for $1 for a Foxmarks license, I would agree, it is a great deal for me. If $1 represented a significantly higher proportion of my income, the decision about whether or not to use Foxmarks or to simply swant bookmark files across machines might come into play.
But thanks for your comments – they (and your blog) have made me slightly more bullish on the prospects for pay-for-play add-ons as a whole, although I still believe that the best prospects for monetising add-ons will be once the user has access. I will follow the AMO plans with interest!
1. It’s “Rey”, not “Ray”.
2. IIRC Glazou had different examples with different values, but the one he talked about the most was calculated with $2.
3. Imho, you can’t compare an IPhone user to a Firefox user. The former ones already paid voluntarily a premium for their hardware, so it’s more likely that they pay for software.
4. There are also OSS concepts where the contributors/developers get no financial reward like Wikipedia or most smaller software projects.
5. Paid add-ons on AMO should be excluded by default, otherwise it would become like a 90’s or early 00’s download portal, cluttered with shareware.
#1 of course, you are right, corrected. It is a Cuban name as Rey explained to me.
#2 Probably, yes. I was not able to participate fully, and did not take notes.
#3 I tend to agree, and think there are many other reasons why an iPhone is neither comparable nor a model that Mozilla should copy even if it were.
#4 indeed – very important and must be respected
#5 Well, this is the nub of it. I believe that there exist, and should be nutured, business opportunites for the Mozilla community to customise software. I do not personally think that this translates into a pay-for-play app store-style AMO, but I have my eyes, ears and mind open and it is a very important topic.
I wanted to lend my 2 cents regarding business applications, Firefox, Addons, and AMO.
I have been developing addons for Firefox to help small businesses for a year now. I wanted to find something that would enable me to develop customized apps quickly and cheaply per business customer. I also wanted them to have some fun with it, so there needed to be a regular consumer spin on it as well, not just business to business. Firefox and Thunderbird have been the perfect platform for this strategy.
Although paying for addons in the current AMO implementation does not make sense to me, I can see a time when it would be. My vision is to do a custom installation of Mozilla tools for a business customer, and then introduce the staff and mangers to a “business branded” fork of AMO to select additional addons that fit their needs. Some of these addons will be pay to download, while others are simply offering a pay as you go hosted service with an add on as the rich client.
I am one of the founders of a new open member managed company that is dedicated to open software tools delivered with a great user experience. The idea I briefly outlined here is the business model we hope to deploy at our company, and it is one that I think fits well with the open source community.
I am grateful for the work of Mozilla and the community, but I hope that we can see that the productivity and enterprise software market can be “Mozillafied.” I know enterprise software is often said to be a crowded market, but most of my small business customers have become very frustrated with technology, so to me that seems like a wide open door for a better experience.