Last Monday, the TV signal coming going into our TV disappeared. “No signal” was the error message displayed quite prominently on the TV screen. Well, since there is no Ice Hockey World Championships at the moment, I thought that fixing the antenna was not an issue of vital importance – a decision that my family disagreed with. So to keep the domestic peace, I called the service, they came the next day, fixed it in about 30 minutes, and all was fine until yesterday. That is when the invoice for the service arrived. Note, I don’t mind the cost of fixing the antenna, but I DO mind a lot the cost the repair service charged for COMING to our house. The distance is only 17 km (10 miles) but they charged 50% more than a taxi would! And, taxis in Prague are darn expensive. Which brings me to the benefits of free delivery.
At AVAST, 10 years ago we decided that we would give our antivirus to users for free. And that means we also pay for the cost of delivery to your house. This includes all of the cost for building server farms and the necessary bandwidth to deliver installation files and then, of course, the virus definition updates directly to you. Thanks to great optimization levels, small installation size, and small updates the cost is very low but still we do pay this cost for all 138 million active users.
Journalists always ask me how we are able to have a successful business around giving something for free when we are also paying the cost of distribution. Well the simplest answer is to look at the distribution of traditional brands. If you are Symantec or McAfee, you need to go to hardware manufacturers and PAY THEM to include the software on new computers. You pay for ALL pre-installations even though you know that only a few percent of all users who get the computer with pre-installed Norton Antivirus will actually purchase it after the trial period expires. In my TV example, that is like sending your antivirus to all users around the globe in a Prague taxi. This is very expensive ... and only few customers then actually buy it … which makes it even more expensive.
AVAST provides its antivirus for free and the distribution is much cheaper. Anybody around the world could download our free antivirus. And a small percentage of users will actually buy the premium versions. Avoiding the cost of ‘taxi drivers’ who produce computers is an elementary part of our business model.
But now, I need to call the TV service people and scream at them a little.