Fedora Project: Announcing New Direction

Stephen Smoogen smoogen at lanl.gov
Tue Sep 23 21:46:44 UTC 2003

On Tue, 2003-09-23 at 15:15, Tom "spot" Callaway wrote:
> On Tue, 2003-09-23 at 15:45, Paul Gear wrote:
> > Here's my explanation of what i'm looking for:
> > http://paulgear.webhop.net/the_page_formerly_known_as_rhel.html
> The costs of producing your distribution would cause Red Hat to lose
> money on every box set produced. The Red Hat Linux box set model was not
> profitable. Red Hat is a corporate entity, and we are in this to make
> money. 

Since someone currently from Red Hat has mentioned this.. lets just say
it is very unprofitable. Returns of 'damaged/unsold' are >40%, and to
make money on say a $39.99 dollar set you need to have 0 support, 0
books, and no goodies in the box. The money you make on it after you
count storage, retail cuts, distributor cuts, and other channel cuts is
about $1.00 per box. [This is in US dollars with US taxes.. other
countries systems of product delivery and tax systems change the price
layout usually.]

If you are wondering how MacMillan was putting out so many boxed sets
back in 1999/2000... it was a tax writeoff. They didnt expect to make
money on it, and I have a feeling that Mandrake got the shaft because
they were given maybe 0.50 per box sold. [From what I heard from a
friend of a cousin of a friend, they may more from donations to the
Mandrake CLub than they did from selling boxed sets. And they just get
enough from the donations to keep the website and lights on.]

Sales online of the product without going through middlemen has always
been bad enough that you couldnt pay for the internet connection. Even
if you did it on a print on demand (as RH did in its very early days.)
you would just cover cost of doing business if you pared down the staff
to 10-18 people.  

Stephen John Smoogen		smoogen at lanl.gov
Los Alamos National Labrador  CCN-5 Sched 5/40  PH: 4-0645 (note new #)
Ta-03 SM-1498 MailStop B255 DP 10S  Los Alamos, NM 87545
-- So shines a good deed in a weary world. = Willy Wonka --

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