> Or maybe their customers just like the product, as in the GUI and feature and don’t care that another compression algorithm can shave off a few extra megabytes.
First of all, I very much doubt that the people who use winrar even notice the UI. They could switch to 7zip and feel right at home. People are used to UI changing drastically all the time, both from Windows itself, and from websites. Some of them complain about it, but even they adjust.
Second, I said nothing about "another compression algorithm". All the big compression software on Windows support each other's algorithms, but 7zip is free and winrar makes you pay for it. Also the people who use winrar don't care about compression algorithms in the first place, only that they get a file they can email and the other people can double-click to extract.
Third, the reality of the situation is that most people who use winrar are also the kind that use the trial version indefinitely. The more clued ones switch to pirated copies from piratebay et al. I'd rather people use 7zip than pirated copies, both for their safety and for RARLAB's benefit.
The reason these companies charge for things that are free is because they rely on users not knowing better, and the small fraction of users who do pay for it is sufficient to bankroll them. A 7zip user and a winrar user could be friends for life and the topic of "So what compression software do you use?" might never come up.
>If I recall correctly WinRAR can make self extracting archives pretty easily.
So can 7zip.
>I love the fact that small software companies like RARLAB can still exist.
You say this as if the alternatives are all big software companies. Last I checked, 7zip is still a one-person software.