As 2018 gets underway, it seems like the right time for an updated
report on the financial state of the Ardour project. I still
occasionally see people referencing articles from several years that
give a misleading idea on how things work these days, and it would be
good to put some current and accurate information out there.
The TL;DR Summary
Ardour's finances are good. The project produces a remarkable revenue stream for an open source project, though small by comparison with similar proprietary projects. More than 3000 subscribers mean that the month-to-month stable income is enough to keep Ardour's lead developer fully employed, and monthly surpluses from donations and single-paid-for copies also have enabled the project to distribute significant sums of money to other active developers.
A Brief Recap/History of Ardour & Money
When I started Ardour, I never had any intention from making money from it. However, changes in my own personal circumstances meant that by about 2007, I needed to earn an income again, and in 2008 that started thanks to the sponsorship of Solid State Logic. That ended less than a year later, and in 2009 I had a lot of valuable suggestions from Ardour users about how to get the program itself to generate a revenue stream. The original goal was to just ensure that I could continue to work full time on Ardour rather than seeking other employment. Inspired by Radiohead's release of "In Rainbows", I adopted a "pay tunnel" approach to Ardour, trying to convince as many people as possible to pay for the service of getting a ready-to-run, supported version of the program. I've also been the beneficiary of the ongoing collaboration with Harrison, whose Mixbus program supports, invigorates, improves and contributes to Ardour on a continuing basis.
It has been remarkably successful when viewed through the lens of open source software. We probably generate more actual revenue than almost all but a handful of open source projects. However, when compared with even a small proprietary project, our financial story is lot more modest. Cockos Inc., which makes Reaper and was founded by a multi-millionaire, has in the past had 3 full time employees and typically paid 2-3 contractors at any given time. We are still a long way from even that kind of success.
Subscriptions, Subscriptions and more Subscriptions
When the project first started experimenting with subscriptions, one of our early users suggested starting a campaign called "The 600". The idea was to try to get us to 600 subscribers each at US$10 per month, which would provide US$6000/month of stable income.
The campaign never got launched. Instead, via some sort of incredible magic, we've ended up with more than 3000 subscribers (most at lower monthly amounts) generating around US$8500 per month of stable income. The churn on these subscriptions is high - many start and stop well before a year is over. But the overall level remains about the same (and climbs slowly) because for every person who cancels, someone else starts.
A massive thank you to ALL our subscribers who make my life and work possible, and who make the lives of some of our other developers a bit nicer/easier/more worthwhile. We couldn't do this without you! Thanks for everything!
Numbers
In 2017, Ardour itself generated US$130,565 (this does not include several thousand dollars of PayPal transaction fees). Of that, Paul collected his base salary of US$74,400 plus US$11,165 of the surplus income. Paul paid the operating costs of the Ardour web site (about US$1200 a year) from his income.
The remaining surplus of about US$45,000 was distributed to other active developers, principally Robin Gareus but also including Tim Mayberry, Nick Mainsbridge, Len Ovens and others.
Changes For 2018 and Beyond
The last time I set a salary goal for myself was 2009 (US$6200/month). Simple inflation in the USA since that time would require that to be US$7128 in 2018. In addition, for the 14 years prior to 2015, my wife and I survived without any health insurance; in 2015, following the arrival of the ACA ("Obamacare") in the USA, we started paying for health insurance. In 2018, our monthly premiums for that are US$971 (lest anyone think that this sounds good, that policy comes with a US$7300 deductible per person, meaning that the insurance doesn't really cover anything except terrible accidents and chronic or serious disease). I never factored this in my original salary thoughts.
To reflect these two realities, starting in 2018, I will bump my salary up to US$8100/month. This corresponds to an annual income of US$97200, but without any employer contributions to health insurance or retirement. This is reasonably modest by comparison with median US salaries for a "Senior Software Engineer" or "Lead Software Engineer", which are in the range of US$110,000 to US$130,000 (not counting those employer contributions, which add many $1000's more in value).
Based on recent monthly income levels for the project, this will still leave around US$3000 to be distributed to other active developers. Because of his extraordinary productivity, all-round brilliance and unstoppable energy, a substantial chunk of that is likely to continue to flow toward Robin Gareus for the foreseeable future. Robin also works as a contractor for Harrison Consoles, with his efforts serving as a key bridge between Ardour and Mixbus, ensuring that the two projects remain tightly integrated and both benefitting as much as possible from new ideas and improvements.
Thinking Ahead By Thinking Behind
I mentioned above, I didn't start Ardour with the idea of making money from it. I was a stay-at-home parent at the time, and wasn't giving a lot of thought to my long term future financial situation. 18 years later, my family situation is very different, and I'm notably older myself. I stopped regular paid work about 22 years ago, and as a result haven't been involved in a retirement plan since then. For many years, I wasn't earning any income at all, which meant I also wasn't a participant in Social Security (which provides an extremely minimal retirement income in the USA). Because of all this, and because of Ardour's relative success, I do now need to look at the project as the most likely source of any retirement stability that I may have (retirement is still a decade away for me, if I ever actually retire!).
In thinking about all this, I've come to the following rationalization of how I intend to personally interact with Ardour's finances over the coming years. Back in the early days, I spent about 8 years working on the program without any significant income from it. Taking a rather modest salary figure for that period of US$70,000 per year (again, without any employer contributions to health or retirement), that would total US$560,000 of income. If and when I ever collect that much from the surplus income, I'll stop taking any part of the surplus and will consider the project to truly and fully belong to ... well, I don't know, but not me any more, at least not in the sense I do now. It seems unlikely that this day will ever come, but this rationalization allows me to feel comfortable about my relationship to the project's financial situation.
To the extent that Ardour manages to continue to generate revenue in the future, it will continue to be distributed in accordance with the general principles I've described above.
Bigger and Better?
Ultimately it would be fantastic if the revenue that Ardour generates grows enough to allow us to hire another full-time (or maybe mostly-time) developer. However, there's little interest among the current developers for spending time on "marketing strategies" to try to explicitly work on this goal. We'd rather work on the software itself, and rely for now on the continued organic growth that has bought us this far. Of course, if we hear of any obviously great ideas to get us to this sort of goal, we will consider that.
All the best for 2018, and although I know I will be cursing your collective asses for a few months after 6.0 is out, I know from past experiences that it will be worth it in the end.