I think it's different based on what the plugin actually does. I'm not a fan of freemium myself, but I see how it can work if your plugin is more of a "platform" like EDD. for Design Palette (my largest commercial plugin) I've gone the paid annual route with paid add ons for the larger ones, but have released free add ons to addres smaller issues / needs. that way people don't feel nickel and dimed for everything, but I'm not stuck supporting a huge set of free users.

Interesting thoughts and pricing is hard. I spoke to Pippin about the "Premium with Add-ons" model when AffWP came out. Like you say, I'm not sure forcing people to buy a developer license to get add-ons is great for the customer. What if they only want one of the add-ons and only use the plugin on a single site? They would be paying way more than if they could simply buy the add-on as a one off.

Freemium is hard, no doubt about it. I have three large commercial plugins / platforms that I sell now, each one under a slight different model. Freemium, while it has some nice benefits, is by far my least favorite, both personally and from the business perspective. EDD has been pretty successful with the freemium model, but unlike many May suspect, it doesn't have much to do with the sheer number of extensions. Every extension that contributes to the market places sales is helping the business, but the vast majority of revenue comes from 10 of the 120+ extensions. There are extensions that sell many, many copies every month, and there are extensions that only sell occasionally, and there are extensions that have never sold a single copy. I have been thinking about the model a lot lately and have been trying to determine what the main deciding factor is for whether a extension sells well or not. I've determined it isn't how pretty you make the sales page, or how well you put together the demo video, or even how many people you promote it. Of course all of these factors help, but the primary factor is "need". An extension that is "needed" by users will always sell, while an extension that is "fun" or "cool" may sell. Every single ecommerce store needs a way to accept payments from customers, so payment gateways (for popular platforms like Stripe at least), sell very well. Every person selling software of some kind usually wants a way to license their software, so The Software Licensing extension sells exceptionally well. The vast majority of people want a way to add their customers to a newsletter, so MailChimp and Aweber sell exceptionally well. An extension will sell well it if fulfills a strong need in the user base. Users won't often purchase addon that they think are cool or just fun to play with, but they will absolutely purchase addons that they need to run their business.

The one thing that seems to be lost on a lot of plugin authors is that many believe their plugin is the most important plugin that will be used on the end-user's site. So they price it as such, which usually ends up being cost prohibitive. Very few WordPress sites can live with just one or two plugins that cost a lot of money. You start adding up the cost of this plugin, that plugin, etc.. and you end up with a site costing hundreds or thousands of dollars in just plugins alone. There is a *LIMITED* amount of money to be spent and all plugin developers are fighting against each other for a piece of that. And of course, developers deserve to be paid for their hard work. But in my opinion, they should stop trying to make a living off a single plugin. I have a very comfortable 5 figure income from selling a lot of products at a low price-point (within the next 2 to 3 years I expect to be in the 6 figure range). The cumulative effect of selling more items results in a high overall income. Most authors, in my opinion, try to make a high income from a few sales of a few items. And in the end, I think they end up losing.

Pricing that is fair is one of the most challenging aspects of selling WordPress products next to the cost of supporting those products. With Ninja Demo we are exploring the premium + Add-Ons model and I'm very seriously considering the idea of add-ons being free for the highest tear and pay per add-on for the lower tears. I feel like that might be the best possible solution at this point but it's definitely an experiment. The point is to never think the current way is the only way or even the best way. You have to be willing to test your market and learn from the results.

When starting the development of my mapping plugin Maps Marker Pro 2 years ago I considered offering unlimited updates+support as unstainable and therefore decided to go for a model where the license is unexpiring but access to download and support limited for 1 year with optional renewal at 50% of original package price. More infos about this model at http://mapsmarker.com/pricing The challenge in the beginning was to convince customers that this is no subscription model and that their licenses will not expire but only no updates and support will be possible if they don't. At the beginning all packages included 1 year access to updates and support but due to customers demand I introduced a 1 month package a few weeks later. It might also be helpful for others too to offer 3 or 5 years access to updates and support at a reduced price - this newly added options have proved very effective. Also important for me was to offer an easy way to upgrade from my free to the pro version. This is achieved by the integrated upgrader - I users are also able to switch back to the free version at any time without loosing any data (if a user switches back to free version, an admin notice is displayed asking him for feedback in exchange for a coupon) For more best practices and lessons learned please have a look at my Slideshare presentation "Best practices from building a premium plugin" at http://de.slideshare.net/robertharm/best-practices-from-building-a-premium-plugin further knowledge exchange with other plugin devs would really be appreciated!