How Nitro PDF Makes Money From Free Software

We're big fans of free software generally, but the question often arises: how do companies that build free tools professionally make any money? At a press event today, Nitro PDF (the Aussie company which makes our favourite free PDF reader and editor) shared some figures which provide an insight into how the 'freemium' approach works.As of the end of October, Nitro PDF Reader had been downloaded 13.5 million times. Of those downloads, 2.3 million had actively used the software in the last month. The total number of purchasers of the Nitro Pro paid product? 410,000, of which 100,000 were sold in the last year. The free software effectively acts as marketing for the paid version. Not every free product will have a conversion ratio as high as that, but it demonstrates that the freemium model can definitely result in sales.

Nitro last week released Nitro Pro 7, the new version of its fully-featured paid software for PDF creation and collaboration. The company is also working on a web-based system for managing and storing documents. The latter isn't due until mid-2012, but is definitely something we'll be keeping an eye on.


    For those interested...

    A 5 user license costs $599.95. At 100,000 sales, that's $59,995,000 (aka: $6 million) in the last year.

    (Note: I did this quickly, check my sums before quoting me ;))

      See what I mean?
      That should be "aka: $60 million"...

        I think you may also have forgotten to divide by 5...

          Depends on the definition of "purchasers of the Nitro Pro paid product" in the article. Since Nitro only sells 5 or 10 user licenses at a time, I imagine they're quoting licenses sold rather than total users the licenses are for.

          However, let's be conservative and say that they're quoting total users rather than licenses. That puts the total at $11,999,000 (aka: $12 million). Still not spare change!

    Jess: we definitely offer single licenses of Nitro Pro for purchase in addition to 5 and 10 user packs. We also offer volume licensing starting at 11 users.

      Ahh, so you do. I totally overlooked that entire top section where single licenses are offered the first time (maybe you want to look into some eye tracking software to see where the hot spots are on your sales page).

      I guess that means my calculations are all screwy :P

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