Nothing -- once free, always free. You can publish a new app, in a new
package, that has a price.
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Not very intuitive from the developer console (there should atleast be a warning that the developers get
when going from paid to free).
I fail to understand why you can't go back to paid.. it's all automatic, no human intervention. Is there any explanation as to why Google chose this path?
Mass email by developer to those that downloaded originals?
Yah, I don't know if it's possible to do a mass email to all your downloaders.. that would be nice, but I would guess that google/market protect end users from that potential for various reasons.
Maybe they don't, but it wouldn't be difficult to put together a table that can store app history info... thus use it for the market to determine if a user already downloaded the app for free and from then on gets free updates.