I haven't read the commercials on the two stores but I believe that Apple takes quite a large percentage of the revenue: does anyone know if Nokia has a lower rate or maybe fixed percentage?

If Apple are charging more then they might be taking out a liability insurance on behalf of the developer from that revenue this would seem to me (not a lawyer though) a sensible route as damages awarded by courts would likely bear a relationship to the monies gained through use of protected works.

The other point I think seems to have been missed in this might be that Apple makes cash from every ringtone you use on your iPhone (please correct me if this is not as closed as I thought) whereas Nokia will need to cover it's costs on something smaller. Also I don't believe there is a legitimate (no hacking) way of installing software for the iPhone so they have to provide a route to gain numbers.

Call it a donation then, 'cause technically that's what it is - a monetary compensation you're legally not obliged to pay. I would have a very low opinion who would ask me what you say - using dubious moral leverage and people's uninformedness to finance development is something I will not condone, no matter how much potential that project might have.

You're not legally obliged to pay for anything, if you don't want to buy what's on offer.

You seem to have forgotten that when you buy software, you're not just buying code (which is the part you can get elsewhere if it's FOSS). You're potentially buying branding, certification, testing, support - things which some people value and prefer to pay for.

Aside from those intangibles, yes it is basically a form of donation.
(And I'd be delighted to see a Magnatune-style "choose your own price, and it can be zero" option).

There is however a down to earth reason for not calling it a donation: Corporate buyers often cannot pay "donations", but they can buy something even if that thing (or the code at least) is available for free elsewhere. That's why you often see things for sale at several prices, where the differences are marginal and the significant difference is whether it's called a "Corporate Subscription", "Premium Subscription" or "Poor Person's Subscription" or something :-)

If a person says, truthfully, "I spent 2000 hours working on this, full time every day for 12 months; it cost me $30,000 in personal savings to fund myself (rent, food, etc.) doing it; feel free to give it to your friends but I'd appreciate if you don't publish free competing versions prominently all over the net without a good reason, but if you have a reason of course you have that right", do you think that's morally dubious - assuming it's true?

Would you really have a low opinion of someone who spent that much time, personal energy and their own money on a project, to make you some open source software, for which they give you all the freedoms but ask you to not jeopardise their ability to continue if the only reason you have is "because you can"?

Do you think it's wrong of Red Hat to sell Red Hat Enterprise Linux? Even though they pay the full-time salary of half the Linux kernel developers, a fair chunk of GNOME developers, and everyone knows you can get a free version, compiled from the same source, from CentOS?

Red Hat don't stop you getting the free one built from the same source from CentOS. They don't try particularly to hide this fact (though I admit it's not found in their advertising). They don't pursue anyone for it, or ask them to stop. In fact, they try hard to satisfy their GPL obligations and community expectations by making it easy for CentOS to do that. Red Hat are widely regarded as good citizens in the Linux free software community because they consistently do these things.

You may know there are several important but small differences between RHEL and CentOS: Testing, certification, and branding. To some people, those are worth paying for. To others, they don't need that, but they want a reason to pay Red Hat, so that their interests are developed for. Others are happy to use the CentOS community-built version, which is free. I myself have used both, depending on circumstances.

Those differences would probably apply to selling free software for the N900 too. Just because you can take the source and build your own version, doesn't mean you're free to put the original developer's personal graphic signature or their "I have tested this build" seal of approval on your version.

You may find a situation similar to Debian's Iceweasel vs. Firefox, or a situation that is similar to the difference between free users and paid users of shareware, i.e. access to extras like personal support from the authors.

It does not have to be uninformed. You seem to think that misinformation is the only way it could be done; that is incorrect.

If people were sold something without being told that it is based on FOSS, then I'd agree that is not ethical.

If people were given something for free, without being told who really wrote it or deleting what the people who wrote it say in accompanying READMEs, I'd call that unethical too.

Sounds to me like you have a particular idea about how these things are done, and aren't particularly informed yourself about the various ways FOSS is sold ethically (at least, by some people's standards ethical). Have you ever read the GNU Manifesto, or the FSF's position on selling free software?

You seem to believe that the only way a person would sell FOSS is by tricking people into it, that nobody would willingly pay for it if they knew they could get it (or something built from the same source but not certified by the original developers) from someone else for free. That is not so.

Don't sell attila77 short, jjx, he's much sharper than you seem to realize. Looks to me like you're taking some very short points and extrapolating the hell out of them.

It's not a moral problem, which you are trying to make it into. What you're describing is a lack of proper business model. If there IS added value there, through certifications, support, content, etc, great. But that's not the scenario here. We're talking about MyLittleApp v1.0 from the Ovi Store, published by mostly independent developers. If I can republish it to Extras without removing the appeal of the original, there is *no* added value there.

And if you DO open the 'is it moral' can of worms, what happens to contributors ? Are THEY not entitled for some compensation for their hard work ? What happens to the compensation of projects/libraries which our developer built on ? You'll notice a pattern here - and that is a pattern of proprietary software. You're trying to shoehorn an Open Source project into a classic proprietary business model, and I must say I don't know of a single project that pulled that off.

Hold it right there. By your standards, it's CentOS who is impolite as they take the bread out of RedHat folks' mouth. It's CentOS who is jeopardizing the community. Is it OK for CentOS to exist just because they can take RedHat stuff ? What you miss here is that the whole point of RedHat is not in the source, they are not AT ALL in the business of selling code. In those terms, CentOS is not a competitor to RedHat any more than a supposed 'impolite' MyLittleAppCloneInExtras would be.

I don't claim to be a lawyer, but I have been involved with Open Source for quite some time now, one segment of which are my activities in Maemo (mostly development, but feel free to check). I don't see how any of the documents you listed contradict anything I said.

Let's look at the approximate economics of this venture. I'll use UK pounds, but multiply by approximately 1.1 for Euros or 1.6 for USD.

Form a limited company. The government fees are low, but realistically most people will use an accountant. I did this in 2008 and it cost £450.

Annual accountancy charges. This includes filing all the statutory returns as well as the tax returns. This costs me around £1000 per year, and my company is not even VAT-registered as it's trading below the threshold.

Other direct costs. These appear out of nowhere and soon mount up. Business bank accounts attract fees, and, for example, you might need to register under the Data Protection Act (£75) if you're keeping customer support details on a database on your computer. I won't try to itemise these costs, but I can't imagine any way that they will come in under £350 per year.

Then there's the liability insurance, let's say £200 per year.

So we're looking at maybe £2000 expenses in the first year.

Now let's say you put two applications on the Ovi store: a widget for £1 and a more substantial app for £5. (Yes I know Ovi uses Euros, but that's just details.) Ovi's headline rate is 70% to the application author, but that's after various costs. First they deduct returns (where the buyer "returns" the app). Next is refunds (where the buyer demands a refund for some reason). Next is bad debts. Ovi doesn't accept that risk on behalf of the app author, so if for any reason Ovi doesn't get the money, then you don't either. I actually think this is fair enough, by the way, because any other policy would be so expensive to administer that it would be impractical.

Next, Ovi deducts the transaction fees. Obviously I don't know Ovi's credit card fees, but I'm guessing they'd be around 2% on big transactions but proportionately much more on tiny transactions. I'm going to say 5% here, but I'm just pulling this figure out of nowhere and it might be lower or it might be much higher.

But if the app is sold through the phone company, with payment taken from the user's phone balance, the charges are much higher. From my reading of the Ovi Publisher Terms and Conditions the charge here is 50% for apps priced at £1 and 40% for apps priced at £5. And I presume you only get 70% of what's left. So from a £1 app you might get 35 pence, and from a £5 app you might get £2.10.

Now let's suppose you sell 100 of each app per month. In a year that will get you £2940 for a net profit of £940 (under £20 per week), in return for which you must maintain and operate your support website. Not to mention the time it takes to develop the software. Oh, and I forgot the 50 Euros to register as an Ovi Publisher (or 300 Euros if you want to sign the NDA and get early notification of API changes). And don't forget that Ovi's minimum accumulated earnings for a quarterly payout is 500 Euros.

And VAT? The rules for the international sale of electronically-delivered intangible goods are quite different from the VAT rules for regular physical goods. I find the rules quite unintelligible and wouldn't venture an opinion without consulting an accountant. But potentially you will have to hand over a chunk of your income to the taxman as VAT.

So I don't think it's an easy road. I fear those who do well will be the ones who churn out a lot of banal fart-apps and the like. And Ovi's stringent rules are less of a barrier to those people than they are to the individual who passionately develops one great application.

These are just some rough thoughts. I'm sure some of the details are wrong, but nevertheless I would be surprised if more than 1% of app developers could make a profit through Ovi.

Regards,
Roger

Red Hat does not sell RHEL. Red Hat sells the support around it. Red Hat sells services to its customers. That is quite a difference. And believe me, all CentOS people know, that they are nothing without Red Hat, which is one of the reasons why CentOS does not advertise any support or services, though there are people doing that.

It all boils down to "please don't try to see a business model, where there isn't one". And selling open source software without an additional service stack is no business model you should rely on or try to make people morally obliged to buy into.

But I think this discussion is becoming off topic a little bit

I think that prior to some of the breakdowns of cost and time it seemed that a developer should be able to write some code and get into business. There is a lot more work going into selling an app then just writing the code. There seems to be 3 distinct levels of code generation.

1. Give it away. You get nothing in return but thanks and you have very little costs but your time.
2. Donation tab. Put some tab in all of your programs that allows for a quick paypal or other donation, (you only loose 4% with paypal) its on the honor system so your return is going to be low.
3. Ovi or some other. The start up and yearly maintenance costs are high but if you have a good app the revenue stream has potential to keep up with large yearly costs.

For small businesses there are many hidden charges. If you working out of your home the homeowners insurance will probably go up for the newly classified business computers. There are many more

I have been amazed when I have spoken to FOSS developers that there are very little donations and not even that many thanks.

That maybe means that FOSS is so far in the mainstream now, that people don't deem it necessary to do so.

And giving back to a community also is a sort of donating or saying thanks. But yes, don't expect monetary wonders when you put some paypal button somewhere.

Part of the trick of donations is to make it as easy as possible. The problem with Paypal is it requires going through several steps just to donate the money.