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The Software Publishers Association releases new guidelines for try-before-you-buy programs.

SAN DIEGO--The Software Publishers Association today released new guidelines for try-before-you-buy (TBYB) programs, a catch-all to sell applications or content by offering free, limited versions of software in an attempt to turn trial users into buyers.

The policy comes after SPA's October release of guidelines for using electronic software distribution (ESD) to sell software online, a rapidly developing field that appeals to software publishers, distributors, and resellers alike because it can cut their distribution costs and produce new or more profitable sales.

Today's guidelines recommend how to sell software using limited versions of applications or trial versions good for a limited time. The new recommendations also address methods such as selling by subscriptions, pay per use, and rent to own.

"Try-before-you-buy can work as a 'seeding process,' " said Sheryl Barnes, a Lotus manager who heads SPA's member group focused on the Internet. The goal, according to the guidelines: "The user can try the software and then convert it to a fully licensed version."

But Microsoft's Martin Tobias is more skeptical about how valuable try-before-you-buy methods will prove. "We think it's by segment, by product category, but we haven't seen a lot of customer demand." He mentioned games as a potentially strong category for TBYB.

Try-before-you-buy systems rely on "digital wrappers" or secure containers that protect software code as it travels across the Internet but also can have pricing or marketing information embedded.

The new guidelines introduce the concept of a "rights clearinghouse," an independent entity that tracks software licenses sold online and reports data back to the publisher, distributor, and reseller so they can divvy up the revenue.

Although many small software firms see the online world as a way to bypass existing channels of distribution, the SPA guidelines primarily focus on using resellers and distributors, just as in the physical world. "Many of these practices can be applied to a direct distribution model," the guidelines note.

Categories that may gain from online distribution include software for niche markets and component software that plugs into existing applications. In addition, the SPA policy notes that using encrypted "wrappers" for software distributed online gives publishers more copy protection than distribution on diskettes or CD-ROMs.

Among the pitfalls of try-before-you-buy schemes, the policy notes, are credit card fraud and the risk that users will use repeated trials as free rentals. In addition, no standards exist yet for secure wrapper technologies--an appendix to the report identifies 14 vendors of wrapper technology, up from perhaps five only a year ago.