INTRO: I’m sure we’ve all seen this warning message
in the past.
“Please note that WinRAR is not free software.
After a 40-day trial period you must either buy a license or remove it from your computer.”
But the funny part is that, even after the 40-day trial period expires, nothing happens.
WinRAR doesn’t block you from using the program nor do they force you uninstall the
software.
In fact, you can just close this window and continue using WinRAR like nothing happened.
You don’t have to keep downloading new trial versions of WinRAR or find a cracked version
of the software.
But, I’m sure all of ya’ll already knew that because this is precisely what everyone
does.
This isn’t some sort of glitch either, the company behind WinRAR is well aware of this
situation and they actively allow users to easily bypass their pay wall.
It’s also not like WinRAR runs any ads or sells your data, so they truly don’t make
any money from users who refuse to buy a license.
Considering this, why was this virtually free software created, who actually ends up paying,
and how does WinRAR even make money?
HISTORY: Well, starting off with the history of WinRAR,
WinRAR is by no means a new piece of software.
WinRAR was launched way back on April 22, 1995 by two brothers named Eugene and Alexander
Roshal.
Eugene was the brains behind the operation and took care of all the coding behind WinRAR.
Meanwhile, Alexander worked on the marketing and distribution of the software.
By trade, Eugene was a software engineer, so he was well aware of all of the strengths
and weaknesses of early computers.
And one of their biggest weaknesses was limited storage.
The obvious solution for most people was to simply buy more storage when they ran out,
but Eugene felt that there was a better solution.
What if you could have the same data take up less space.
This wasn’t a new idea by any means, but Eugene had a special twist on the idea.
You see, the vast majority of data compression software that was available in the 1980s was
lossy based compression.
As the name suggests, this means that part of the data is lost during compression.
For example, if you were compressing a 4k image, you could substantially reduce the
size of the file by halving its resolution, but this is obviously not the best solution.
Eugene’s goal was to create a lossless data compression algorithm and this led him to
creating the RAR file format.
But, wait a minute, how does data compression work.
How can you store the same data within a smaller space without losing any data?
Well, the key is to leverage natural redundancies within the data itself.
For example, let’s take a piece of text.
If you wanted to save this quote onto your computer, the most rudimentary method would
be to go letter by letter.
You could tell the computer that the first characer is I and the second character is
t and the third character is a space and so on and so forth.
But, a far more efficient method would be tell the computer that character in the 1,17,
23, 31, and 34 positions are all the letter i.
Now of course, that’s an extremely basic form of data compression, but that’s the
overall premise.
The idea is to eliminate redundant data storage as much as possible by using algorithms, machine
learning, partial matching etc.
Anyway, after grinding for quite some time, Eugene came up with a new file format called
RAR in 1993.
And, two years later, he would release a piece of software that could compress data into
and out of the RAR file format, and this marked the birth of WinRAR.
Given that the software was free to try, it didn’t take long for WinRAR to gain popularity
within the computer market.
After all, most users were desperate for storage.
This isn’t nearly as relatable nowadays given that we have loads of storage.
Not to mention, external storage options as well as cloud storage options are both cheaper
than ever.
And this is one of the main reasons that the popularity of WinRAR has been on a massive
decline over the past decade.
But, back in the day, computers had extremely limited storage, so you had to be super careful
with what you stored.
Anyway, Eugene continuously launched newer versions of WinRAR that implemented the latest
data compression technology, and overtime RAR along with ZIP became the standard for
file compression.
FREE: Alright, so now that we discussed the history
of WinRAR, let’s take a look the paid version of WinRAR.
More specifically, let’s look at what exactly the paid version offers over the free version.
By far the biggest benefit that you get from paying for WinRAR is that you don’t have
to close the buy page window everytime you open WinRAR, but that’s pretty much it.
You’re basically paying $29 to remove this pesky window and of course be on the right
side of the moral compass.
This may not sound like a big perk at first glance, but if you use WinRAR on a regular
basis, you’ll spend hours closing these pesky windows throughout your lifetime.
A fellow YouTuber named RMD tech actually has a full break down of how much time you
can save by purchasing the license and why it’s well worth the investment.
Jokes aside though, no one gives a crap about having to close this window.
Not to mention there are plenty of easy ways to get rid of this window without paying not
that I recommend any of them of course.
But realistically, the entire program is basically free for everyday people.
This might sound like a stupid business decision, but there’s actually multiple legitimate
reasons behind this starting with popularity.
It is possible to make software hard enough to deter the vast majority of pirates.
I mean just take a look at Mac OS.
Yes, it is possible to install Mac OS on a windows machine, but actually getting through
all of the kernel errors and driver issues takes well over 10 hours, and most people
just don’t care enough to go through that.
The thing to note, however, is that this does not mean that this user is just not gonna
use a computer at all.
Chances are, they’re just gonna pirate a piece of software that’s easier to pirate.
Within the OS space, this was Windows, and this is one of the main reasons that Windows
is so popular.
If Windows wasn’t easy to pirate, it’s very possible that the dominant OS would’ve
been Linux, but since Windows was easy, most people just stopped right there.
This same rule applies to WinRAR as well.
If it was hard to pirate WinRAR, people would’ve likely just used Zip instead, or maybe some
other file format would’ve risen to the top.
So, offering WinRAR for free to the public was basically an investment for the company
to get the public on their side.
Once they have the public on their side, they’ve basically already won because companies will
have to follow suit.
Now of course, there’s gonna be some oddball companies out their that force customers to
use some obscure file format.
But the vast majority will just adopt what the public is already used to.
This doesn’t just apply to customers either.
Employees are also part of the public, and if WinRAR is what employees are most familiar
with, that’s most likely what they’re gonna use.
This is the key reason that software like Microsoft Office and Adobe’s Creative Suite
are so common amongst companies and schools.
If you get the public on your side, institutions will follow, and unlike the public, the instutitons
will actually pay.
WHY EVEN PAY: As an everyday person, there’s really no
reason to pay for WinRAR unless you simply want to support the developers.
And if that’s you, that’s great.
But, at the same time, you don’t really risk anything by not paying.
This is not the same case with companies though.
Sure, it wouldn’t be that hard for companies to just pirate like everyone else, but this
is simply not worth the consequences.
And I’m not talking about legal consequences.
Sure, WinRAR could sue you and you’ll have go through the hassle of a lawsuit, but that’s
not the biggest concern.
The biggest concern is the reputational risk your taking by pirating software, and that’s
simply not worth it especially given how cheap WinRAR is.
If you’re buying licenses for over a thousand employees, you only have to pay a measly $6
per license.
If it get’s leaked, however, that your company has been using pirated software, you’ll
be paying a far greater price.
For example, let’s say Apple needs to use WinRAR for whatever reason.
Apple currently has about 150,000 employees, and let’s say 10,000 of these employees
need access to WinRAR.
At $6 per license, that’s a lifetime cost of $60,000.
Now, let’s say Apple tried to avoid this cost and pirated WinRAR and that this eventually
got leaked.
Surely, there will be people who will no longer be willing to shop at Apple because they don’t
want to support a mega cap that’s actively screwing over a small business.
Out of the hundred million phones Apple sells every year, even if only 100 customers make
this choice, Apple would lose out on $80,000 worth of revenue at $800 per phone.
Now, what if a 1000 customers decided to stop shopping at Apple.
Then we’re looking at an $800,000 revenue hit.
At 10,000 customers, we’re looking at an $8 million revenue hit.
Keep in mind that 10,000 phones is just 0.01% of Apple’s annual volume.
So, even if pirating WinRAR only pissed off 0.01% of just their iPhone customer base,
Apple would be missing out on millions of dollars worth of revenue.
And we’re not even considering recurring revenue from these customers.
This issue gets exponentially worse if we’re talking about a software company.
For example, what if it got leaked that Adobe or Microsoft weren’t paying for WinRAR?
In this scenario, the company that’s trying to sell you software isn’t paying for software
themselves.
What better pass do customers need to just pirate the company’s software.
At this point, even customers who would generally pay for the software would consider pirating
it.
Clearly, this would not be a very favorable outcome, and it’s more than enough motivation
for companies to simply pay for all their software.
THE FREE GODFATHER: In the end, WinRAR was basically the godfather
of the freemium business model.
Just get users on your side and then figure out monetization later.
When they first leveraged this model in the 1990s, it was quite a bold move.
But, today, many of the businesses that we come across on a daily basis use this same
model.
I mean, when was the last time you paid Instagram or Facebook or Google or Snapchat.
None of these companies have a pop up window that tells you that the service is not free
and that you have to pay for it.
But at the core, the all make money in similar manners.
Once they have you on their side, they offer some sort of service to companies, and it’s
the companies that pay for you.
Nowadays, this model has actually become so popular that it’s unique if you don’t
leverage it.
For example, the selling point of newer search engines and social media platforms is that
they don’t collect your data.
They’re either decentralized non-profit organizations or they directly charge customers
for their use.
YouTube premium is a perfect example of this.
It doesn’t look like WinRAR is trying to hop onto this new trend though.
They’ve become iconic for their 40 day trial period that’s actually infinite, and I don’t
think they’re looking to change that.
Also, just based on Google Trends, it looks like WinRAR is on its way out as the demand
for file compression amongst everyday people is slowly dying off.
This isn’t to say that WinRAR is gonna shutdown per se.
According to this website, they still pull in $21 million worth of revenue, and given
that they run an extremely lean operation, they’re likely still profiting millions
per year.
So, while they probably won't become the next Adobe or anything, it looks like they’ve
got a solid business that works for them and that wont be changing anytime soon.
Do you guys still use WinRAR?
Comment that down below.
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