Monetization via Paid Premium Version
November 26, 2022 ยท View on GitHub
AKA: Open Core
A usefull open-source core is free for all but a premium version with additional functionality, performance, security, or portability is available for money. Enables one-time or recurring payments for the additional features.
Requires:
- Setup of a payment mechanism (hosted or self-build)
- Setup of a hosting mechanism to download the premium version (hosted or self-build)
- Setup of a legal entity to sell the premium version (incl. contracts, license(s), etc.)
Variants & Options:
- Monthly payments: Pay for usage even if nothing changes
- Pay for updates: Pay for every new major or minor version - i.e., only if something changes
Platforms
- git.market (Hosting & Payments for Code)
- PrivJS (Hosting & Payments for JS Libraries)
- Gumroad (paid downloadable binaries, etc.)
Evaluation
| Characteristics | Value | Note |
|---|---|---|
| Effort to set-up | Weeks | Creation of a legal entity with licences, documents, etc. |
| Effort to maintain | Medium | Finding new customers will become necessary |
| Cost to set-up | Medium | Will require a lawyer to setup the license and contracts |
| Cost to maintain | Low | Will cause costs for legal or tax related stuff (but should be covered by income) |
| One-time Income | Medium | Very few companies might pay large amounts if the premium feature is essential |
| Recurring Income | High | Recurring payments per month or per update |
| Income Predictability | High | Companies probably want premium version for several years |
| Full income Threshold | 10+ | |
| Recipient | C | |
| Additional Work | High | Extra work to develop and maintain premium features |
| Visibility | Low | Easy to forget, ignore, or overlook by users |
| Necessity to pay | Medium | Might be attractive for companies (e.g., pay for higher security) |
| Entry Threshold | Medium | Individual contracts for every premium version might be necessary |
| Countervalue | SW | Customer buys additional features |
| Scalability | Medium | Scales with the number of commercial users (who need the premium features) |
| Effort for marketing | Medium | The users might run in situations that require the premium features |
| Competitors | None | Premium feature would have a proprietary license |
| Software types | Special | Best for libraries or programs companies build tools upon |
NOTE: External contributors / companies might develop similar premium features and become competition.