Rethinking the shareware model.

Shareware, once distributed chiefly through bulletin boards and user groups, has gained a good deal of visibility lately in mainstream distribution channels. More than a dozen distributors--mostly rack jobbers and CD-ROM publishers--have created collections of low-cost utilities, games, and other shareware titles. In theory, these distributors only sell limited "trial" rights to shareware titles; a consumer who decides to adopt a product is expected to send a small additional payment to the developer.

Trouble is, say shareware authors, the only people making money from retail distribution seem to be shareware distributors, not developers. Thus, Imagisoft's Mike Prestwich reports that after a distributor sold 12,000 copies of his Chinese Checkers game, Prestwich netted just three paid registrations. Another author, MVP Software's Mike Snyder, says he gets "fewer than one registration" for every 2,000 retail sales. CD-ROM anthologies--which can contain dozens of titles--yield even fewer registrations, shareware authors complain.

Shareware developers think they're getting a raw deal, and recently a group of leading authors decided it's time to change the rules of the shareware game. In a letter circulated to rack jobbers and CD-ROM publishers, the developers insisted they now want written contracts and "royalties for every disk sold." The letter warns that "rack vendors may be violating U.S. copyright laws," and asks for an immediate end to shareware distribution "in a retail environment or on a CD-ROM" without permission from the author.

So far, at least ten distributors have agreed to pay royalties, and it's likely that most others will fall in line. But it's also likely that the new distribution model will end up making shareware an even more confusing concept than it already is. Under the new rules (which individual authors are free to modify or even ignore), mass-market distributors are now expected to pay royalties, but not "catalog vendors, sysops, and online services." Since there's no standard contract, moreover, we expect that the top shareware authors will end up commanding relatively high royalties, while newcomers will still scratch for a living.

Maybe all of these new distinctions will become perfectly clear to consumers, who have never quite understood why they're supposed to pay both an author and a publisher for the same product. And maybe these newly-enlightened consumers will start mailing in thousands of new registration fees to deserving developers. But we wouldn't bet on it.