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Comment by cloche | Hacker News Reader

I've wondered why software engineers don't get royalties similar to Hollywood writers. If a writer writes a hit show/movie that is still played 10 years down the road, they receive royalties. Why isn't software the same? If I write code that is still producing value for the company after 10 years, shouldn't I get royalties for that?

I disagree about the open source effect. I think the rise of open source has been a great catalyst for advancing the industry. If every company had to do everything themselves, the Internet would still be stuck in the 1990's.

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Writers in Hollywood have a union. Famously they went on strike: https://en.m.wikipedia.org/wiki/2007%E2%80%9308_Writers_Guil... , triggering the rise of "reality TV" as a means of making programs without writers, or at least without crediting a writer.

Programmers are on the same terms as session musicians, only much better paid: we come in, get a fixed payment, but not royalties or (rarely) individual credits. At least the game industry does credits.

The trouble with copyright is that you won't get paid without a fight.

Broadly what you are asking for is power, which can only be taken, and only by a positive understanding that that's what you're doing and the cost associated with defending your position.

Royalties work better when the product is fixed upon creation: an episode of TV basically never changes once produced.

Software changes all the time (for better and worse). If git blame said I wrote 100% of the code 5 years ago, but only 10% today, do my royalties change over time to reflect that? What if my remaining 10% code is extremely business-critical, or what if it's dead code that just hasn't been cleaned up yet? Would new programmers intentionally refactor departed employees' code to take over that share of the royalties?

The closer approximation to royalties are the low touch/highly automated side businesses we hear about now and then, like some programmer setting up a small self-contained SaaS business. But economic and legal forces tend to push successful SaaS businesses to grow or be replaced (in-house), so sadly they're the exception rather than the rule.

Royalties would make everything more political. People would try to write things certain ways, evil managers would demand a cut, senior leadership would try to push their agenda.

Besides most software is written in a way to be useless outside of the original business. Having the copyright does very little unless I start the project with this in mind and keep a more generic base.

Royalties are a form of ownership of the work. Stock options and other equity grants give employees an opportunity to take ownership shares of the work, which more or less accomplishes the same thing.

The reality is that a hit show may have 7-10 core writers and reach hundreds of millions of people. Software engineers working for a few years as part of a company with 1000 or more other engineers doesn't isn't really going to produce comparable upside per engineer.

Given the choice, most people would prefer higher up-front pay over lower up-front pay with an option to have more royalties on the back-end.

It used to be common in the games industry for developers to get royalties, back in the 80s and 90s. Quite a few famous programmers made small fortunes on hit games.

As a software engineer, I’ve had sales based bonuses on films and on games, which isn’t exactly the same as royalties, but it’s fairly close.

> Why isn’t software the same? If I write code that is still producing value for the company after 10 years, shouldn’t I get royalties for that?

It depends; there are multiple different answers.

Some people do get royalties, so sometimes it is the same.

Royalties are contractual, they typically get negotiated before the software is released. You can request royalties from your employer, and/or hire a lawyer or manager to ask. Employer might say no, but if you have a specialty or leverage, they might agree to it.

Royalties are common for very small teams and solo contributors, and not very common for large teams.

Continued employment, promotions, and bonuses can be considered a form of royalty.

It’s not common anymore for a piece of software to get released and never change again, which is the only way royalties really make sense. If a company is continually upgrading software for those 10 years with new releases, and new people, then how can the company figure out your royalties?

Best way to get passive compensation from future sales is to own the software or own the business.

Equity is a rough approximation of royalties. It doesn't exactly capture the value of your particular code, but it's pretty hard to figure out exactly what portion of the companies income is due to your code specifically, assuming you aren't the only one working on a product.

Well two points, firstly writers often don't get royalties every show has a writer's room of staff hired for that season, they're paid a day rate or for the season and they don't get royalties from syndication or streaming rights - this was one of the major sticking points during the last contract negotiations between the union, talent agencies, and studios.

Which leads to the second point: Hollywood is heavily unionized. If we unionized our industry it would look more like the Writers Guild and Screen Actors Guild than the Teamsters.

At one point in the 90's the Seattle newspaper estimated that Microsoft had minted 10,000 millionaires, excluding home equity, due to stock options.

I haven't seen statistics, but there are a lot of Amazon mansions around here.

Tech companies are famous for turning low level employees into millionaires.

Yes, and if a software engineer writes a piece of software on their own time and it becomes a hit and/or gets purchased by a large company, they can make a lot of money too.

But if a writer is hired as a salary writer for a show, they're very likely to just get a salary. Same for a programmer.

Big name writers can negotiate a better deal for themselves and are a different story.

The closest model I could find to this is a SaaS usage model (think AWS) or an all-you-can-eat subscription model (think Adobe Creative Cloud). I dislike these models myself as a customer. At least in a usage model, you get payment when your software is used.

Thank you for eloquently stating this. I've thought a lot about this as well.

> The closest model I could find to this is a SaaS

Except none of the revenue goes to FOSS contributors.

Even worse: the SaaS provider eats away any revenue from paid support from the authors.

The royalty setup is gamed by the studios. "Hollywood Accounting" is a whole thing.

I don't see why the equivalent of a software engineer is an actor. They could also be compared to the lighting or sound crew or the film editors, all of whom are unionized trained professionals and none of whom receive royalties.

As engineers, it's easy to mistake the final product to be just the code running somewhere.

Sales / Marketing is another huge chunk of the final product

I asked this question on hn about a year or so ago-

Ask HN: Royalty based compensation for software engineers? https://news.ycombinator.com/item?id=20187775

Unfortunately it did not receive any traction. Royalty based comp would be an awesome step forward for engineers.

They do get royalties, but it's called equity. For the same reason the mic boom holder doesn't get royalties, most software devs don't get equity - the contributions are just not valuable enough.

You could invest in the business and pocket the profits, or start your own business.

This is more or less what you get from equity compensation (i.e., RSUs, options)

what you are looking for exists and it is called smart contracts on a blockchain. You can forever get royalties from good code deployed.

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