Upstreams, Downstreams, and Revenue Streams in Ubuntu

Just because you can do something, doesn't mean you should. Case in point: Vendors can take a hefty cut of the profits from applications sold through their app stores or shipped by default. But should they?

With great power comes great responsibility. No, I’m not talking about Peter Parker and superpowers by spiderbite, I’m talking about the control that vendors have over platforms like iOS, Windows, and Ubuntu. While Canonical may not be quite as powerful as Apple or Microsoft, the company still has a lot of power when it comes to connecting users to open source applications and choosing defaults in Ubuntu releases. How is Canonical using that power? Less heroically than one might hope.

What I’m talking about here is how platform providers (downstreams) are dealing with their upstreams (Firefox, Banshee, or Amazon). The control of revenue streams, in particular, has been on my mind a great deal lately. First sparked by the news of Apple’s land-grab for 30% of subscription revenues or content that can be delivered on iOS. If you missed that, Apple is demanding that apps in its App Store allow purchases through the app store — and Apple gets 30% of the revenue.

I’ve seen a few people try to defend Apple on this, but I think it’s ridiculous. Apple wants to have its cake, eat it too, and have a few slices of yours as well. It’s not enough for vendors to deliver apps (like Amazon Kindle) to Apple’s platform — which drives sales of its platform — effectively gratis to Apple. It’s not enough that its users are ponying up for iOS devices. Apple also wants to tax sales of content or services that encourage people to buy devices.

And there’s the small matter of what code we can run on those devices as well. Apple’s App Store terms are decidedly unfriendly to the GPL and other Copyleft licenses. Microsoft’s Application Provider Agreement also nixes GPLv3 and other Copyleft licenses. (Hat tip to Jan Wildeboer.)

But Apple and Microsoft are big bad proprietary companies. We don’t expect much more out of Apple or Microsoft. This is why we’re using Linux, after all, right?

But Canonical is abusing, to a lesser extent, its control over its platform as well. Specifically, the company apparently takes a 75% cut out of Mozilla’s affiliate sales to Amazon (those that go through the Amazon search in Firefox) and has turned off Banshee’s Amazon Store by default. The alternative was to take 75% of the cut from Amazon sales and pass the rest on to the GNOME Foundation (instead of the 100% that Banshee defaults to).

Why? Well, the Amazon Store competes with Ubuntu One. That will be on by default.

To be perfectly fair to Canonical, some of the Banshee folks have gone on record to say that they’re OK with the arrangement. But it bears examination, because it’s not just Banshee at stake — it’s just the application that brought Canonical’s policies in this situation to light.

It’s the Applications, Stupid

In discussing this with others, and combing through the comments on my post, I’ve seen a couple of people put forward the idea that Canonical will be doing Banshee a favor by putting it in front of users on Ubuntu.

Yes, indeed — defaults are powerful. Making Banshee the default application on Ubuntu 11.04 will likely expose the application to a lot more users. I’m sure that the Banshee team is excited about this. Even though I get paid the same for an article that gets 1,000 readers or 10,000, I’d much rather have the 10,000 (or more). Same thing for application developers — it’s a rare developer who doesn’t want more users. That’s more potential contributors, more ideas for improving the application, and more people enjoying what’s been created.

But I think people are forgetting where Ubuntu’s users are coming from, or what they’re coming for. Nobody installs Ubuntu just to look at a pretty brown desktop. They come for applications. Applications, mind you, that are generally developed by third parties and with most of the packaging work done by Debian.

Canonical have enjoyed success with Ubuntu because they’ve done a really good job of choosing default applications, making Linux easier to install, and so on. But all the polish in the world means nothing without actual applications. (And Canonical realizes this, which is why it’s doing so much work on its Software Center, for example.) Far be it from me to say what Canonical has done isn’t valuable. Linux has desperately needed a vendor that “gets” how to make a desktop that appeals to mainstream users. Canonical is often criticized for “just” contributing marketing — but it should be obvious to even the most die-hard CLI junkie that other Linux distros were largely spinning their wheels when it comes to reaching average users.

Defaults are powerful, which means that many users will never even realize they could use the Amazon store in the first place. At least not through Banshee. So Canonical is hoping they’ll turn to Ubuntu One services instead and buy their music through that service.

But leave Banshee out of it for a moment. Other FOSS projects could try to tie into subscription services or affiliate services to fund or support development. I’d love to see that model work to create more open source and free software. But if a vendor like Canonical is going to take the bulk of the revenue, then what’s the point?

When Community and Corporate Collide

So here’s my concern about this policy: What happens when community interests and Canonical’s corporate interests collide? Canonical makes a bunch of noise about the importance of its community and incites people to contribute to Ubuntu with a bunch of feel-good language about why people should contribute to Ubuntu to make it better and spread open source.

But when the corporate interest and community interest butt up against one another, it appears that the community loses. Banshee’s team were given a choice, yes, but between two unappealing options: hide the store, or give Canonical 75%. That’s not even an equal partnership.

There’s also Canonical’s one-sided contributor agreement, which allows the company to relicense contributions any way it sees fit — including relicensing it as proprietary software.

Ubuntu’s community manager, Jono Bacon, said something that I rather liked about the job description for community managers. I may be paraphrasing, but it was essentially “the job is to make sure that the company doesn’t screw the community, and that the community doesn’t screw the company.” Essentially, there needs to be a fair give and take between the corporate sponsor and the community. While I won’t say that the community is being screwed in this situation, I don’t see this as an equitable solution either. The community certainly had no say in this decision — it was Canonical all the way.

It sets a lousy precedent that stacks the deck too much in Canonical’s favor. “Conflict of interest? OK, we get the majority stake.” “Want to contribute some code to our open source project? Sure, just give us permission to make it proprietary if we choose to do so later.”

This looks like an amazing disincentive to contribute to Canonical’s projects if one cares about licensing. It’s a huge disincentive to try to create a feature that might support a non-profit like the GNOME Foundation if Canonical is just going to levy a majority tax on the feature or disappear it.

Yes, Canonical need to find a way to make money on Linux. I’ve championed Ubuntu One as a smart move and a way to make money while providing some services that many users want, even though a number of folks in the FOSS community don’t like it because it’s not FOSS. I think, overall, Ubuntu and Canonical have been a net positive for the Linux community by showing what is possible and expanding the overall Linux market. It’s amazing what Mark Shuttleworth has put in motion and helped fund.

But I think the company has gone astray here, and it sets some troubling precedents. At the very, very least, I think a 50/50 split is in order if Canonical wants to divvy up affiliate revenue with an open source, non-profit project. Even 50/50 is getting grabby. And it also needs to reverse course on the contributor agreement if it really wants to win trust in the larger FOSS community.

Ubuntu is supposed to be about community — the Ubuntu community ought to have a say in this. Let Canonical set policies regarding commercial software that’s sold through the store, and charge what they think ISVs will find reasonable. But for community projects like Banshee or Firefox? The community should be weighing in here as well.

I’d like to think that companies in the FOSS space can do better than elbowing community projects out of the way for a slice of affiliate monies. If Linux is going to succeed long term on the desktop or on consumer devices, we need vendors that are doing what Canonical does well without getting hoggy with the community or ISVs that make applications users want.

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