The fact that you had to make up a story rather than take one from actual history speaks volumes.
In real life, all of those companies you mentioned are thriving. And could never give their products away for free because there is so much cost in materials and labor to produce each individual unit.
This is unlike with downloadable computer software, where the cost of goods for an individual unit (not development, which in this case was overwhelmingly paid for in one payment) is in server space, bandwidth, maintaining a user database, etc.
How about we examine the examples of Netscape, Opera, Chrome, Firebird, and Internet Explorer? I don't know if you consider it cheating to use a real life example instead of making one up, but it's all I got. I was a business major at university and they encouraged us to do that. Hard habit to break.
20 years ago Netscape owned the marketplace, the company was the biggest software IPO in history to that point. Its browser was a commercial product, regarded as the industry standard, untouchable, kind of the Pro Tools of its time.
Microsoft, a well-funded company (as is Meng's), came along and bought up the slightly out-of-date Mosaic and started giving it away for free as Internet Explorer. It was not well-regarded at first, but Microsoft persisted and threw better and better engineering talent at the project.
Other browser companies jumped in like Opera, also a payware browser, but much cheaper and less bloated than Netscape had become.
Google became a powerhouse, a company based on giving away all of their services to the consumer for FREE, including their browser, Chrome. They make their enormous fortune by upsells and selling to businesses services that their employees learned to use as individual consumers. People don't need to be trained to use GMail or Google Docs or any of that because most of the time they have already been using them. Because they became the industry standard by giving them away for free to consumers!
Fast forward 20 years to now. Chrome, rooted in the freeware world, has almost 2/3 of the market. Internet Explorer and Netscape (now evolved into Firefox, long since freeware) are still around with about 1/10th of the market each, and a plethora of others, with Opera still around (now free), Edge, a new (free) one from Microsoft, and many others, many of them using code from Chrome, which allows its code to be used for free.
And that godawful name! GOOGLE Chrome? "Google" sounds like something that would come out of the mouth of a toddler.
It beat out "Opera," "Firebird," and "Explorer," though. I guess squeamish people can just call it "Chrome."
Consumering Lesson #0: This is not your father's software industry. Upsells and in-app purchases rule. Kick back, enjoy the free stuff, let the people do what they do. We don't need to understand it any more than a client needs to understand everything that we do when we engineer their project. Don't build your entire studio on a skillset with one DAW. Everything goes away. Everything changes. Also, as long as the name trips off the tongue, you're good to go. It will take on its own meaning
Guys, no matter how much it pisses you off that people like me now get your expensive tool for free, the new owner is never going to start charging us for The DAW Formerly Known As SONAR that you paid so much for. The new licensing model is in place, the bird has flown. We are already seeing the value in not needing to justify selling licensing fees by stuffing in flashy new features at the expense of bug hammering. The thing was a crash monster 4 months ago and is now a rock.
Your licensing fees created a GREAT DAW and new users like me are in your debt. Now you and I and tons of other people get a new, better product without the fees, you get to keep what I understand are some killer plug-ins that none of the rest of us is even able to buy yet.
Also, no matter how much the name may embarrass you, "Cakewalk" has 30 years of recognition behind it. Meng's company bought the Harmony guitars brand so my guess is that he understands the value of a brand's strength.
I propose that for all of you who think "Cakewalk" sounds too lame, how about you call it 'Walk. Like Strat or Tele? "I'm gonna go into the studio and lay down some badass tracks in 'Walk.'" Or "Cake." Do you remember when it was cool to call money "bread?"
Keano66
There were once three cars: A Ferrari, A Porsche and a Rolls Royce. They were all good cars. People paid money to buy these cars - they were so good. It was hard to tell which was the best, as they all had merits. Some said the Ferrari was the fastest, some said the Porsche was the more stylish and others said the Rolls Royce was the more elegant. They were all good and the people valued them equally and exchanged money for them.
And then, inexplicably, the Rolls Royce makers said to a stunned market, that everyone could have a Rolls Royce for free. What? The people who didn't own the Rolls Royce proclaimed that "this must be proof that the Rolls Royce must have been a defective car to begin with, for if they are giving the car away for free, it must mean that it is inferior".
Marketing lesson No.1: Have faith in your own product because if you don't, then nobody else will.
And change the bloody name. Cakewalk? Embarrasing. Give it a name that reflects how utterly great this software really is. Make it sound special. Make people WANT to desire it.