Posted By Paul Kafasis on January 19th, 2008

While I was organizing the 2007 MacSanta promo, I put a call out to Brent Simmons, of NetNewsWire fame. Brent was interested, but needed to check it out with the higher-ups at NewsGator (owners of NetNewsWire). Ultimately he couldn’t join in, citing reasons that were “quite good and non-evil”, prompting me to query:

Alrighty, no worries. Is NNW about to become freeware? 8)

Brent dissuaded me from these ideas, but just over a month later NetNewsWire is indeed freeware, along with all of NewsGator’s consumer level RSS clients. Brent and I talked briefly about it¹ and I’m happy for him. This move means his software will be even more widely disseminated than it has been to this point. In the short term, this is also good for users – we already had a great solution for RSS reading, and now it’s free.

There’s are a couple of fairly large problems though, and I think they must be considered. First, it’s a very good bet that a free NetNewsWire has killed the paid RSS reader market on the Mac. Two, in the grand scheme of things, the perceived value of software on the Mac just went down.

The Value Of Software

I’ll address this second point first, as I think it’s the more important of the two. Unlike physical goods, software has little in the way of built-in value – there’s no cost of base materials, no manufacturing cost per unit, and so on. Software is thus worth what the market says it is, instead of the sum of its parts plus a reasonable markup. Developers may set a price, but the market determines if that price is reasonable.

There’s certainly a place for free software. But when a fully-featured product such as NetNewsWire is suddenly free, it effectively reduces the value of other for-pay software products. “Why should I have to pay for quality tools, when this quality tool is free?”, the thinking goes. When something is given away for free, its perceived value is lowered. If software is treated as valueless, it becomes much, much harder to sell. One need only look at a quote from news coverage discussing the move to freeware to see this in action: “And thank [NewsGator] for this grand gesture…While you’re at it, do pray that a few other software companies get inspired by this move and follow suit.”

While I understand the sentiment, as someone who makes his living selling software, this is a disheartening thing to read. Yes, it might seem great if all software was free. But while NewsGator has the financial resources to accomplish this move, most companies do not. Very rapidly, you’d see a shrinking of the market, a loss of innovation, and ultimately, a decrease in quality. There’s no market for commercial software on Linux, and the quality of solutions simply isn’t on par with what’s available on the Mac. By attaching a value to software, we give it value, in a self-fulfilling prophecy.

RSS Readers In The Past…

It’s also worth considering the impact of this move on the specific market NewNewsWire occupies, RSS readers. NetNewsWire has long been the clear winner on the Mac for RSS readers, but there have been lots of other great clients available. Competing with a great product like NetNewsWire is tough. It’s well-made, so the alternatives must be too. It’s popular, so it’s got a great head start in terms of mindshare. And it was competitively priced, making it hard to compete on price. It’s tough, but not impossible to compete with all that. Make a well-designed, reasonably priced product, and you’ll have a fighting chance. Excel in one area (customer service, advertising, a specific RSS feature), and you might capture an entire niche. Simply put, when NetNewsWire was for sale, there was a market opening in which to sell competing RSS readers on the Mac.

…The Present…

Now that NetNewsWire is free, that market just got rocked. It may well cease to exist, at least in any viable way for a full-time developer. If competing with a popular, well-designed product is tough, competing with a popular, well-designed product that happens to be free (while remaining fully-funded) is damned near impossible. And that’s unfortunate, because ultimately, it’s likely to lead to stagnation. The developers at NewsGator have done great work, but the more minds there are attacking a problem in different ways, the more great solutions we see. Look no further than the late nineties, when IE effectively killed Netscape. Web browsers stagnated shortly thereafter – Microsoft, with browser share at or above 90%, had little incentive to innovate, and smaller players just couldn’t break in.²

…And The Future

I don’t know what will happen from here. I think NetNewsWire will continue to be great for many years to come, and I hope those who worked on paid RSS readers will either be able to continue selling them (a prospect I find unlikely) or move on to more successful projects. Further, Brent’s a good friend, and I don’t want to come down on him. His hope is that the increased penetration will lead to improved attention data³, saving time for everyone as far as getting us the news we want to read, and things may well play out that way.

Ultimately, however, this strikes me as an overly aggressive move by NewsGator that has (presumably unintentional) negative side effects. If developers are upset when Apple kills a market (iTunes and the MP3 market, Watson v. Sherlock, and many more), can we hold major developers on the Mac OS X platform to any less of a standard?

Footnotes:
1. Brent also explained that he had to misdirect me from my lucky guess, as it was very private knowledge at the time. When he told me he hadn’t even told his family, I figured I could forgive him. ↩

2. It’s certainly true that we’ve enjoyed a recent renaissance in browsers, thanks in no small part to Safari on the Mac and Firefox on all platforms. That’s far from a guaranteed result, however. ↩

3. Greg Reinacker, of NewsGator, explains attention data quite well:

Excerpted from his aforelinked blog post. ↩