The Broken Business Model Of Indian Feature Films

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I love talking about films, so I decided that I had enough knowledge about their business model to write up a blog post.

My Connection With Films

As a fat kid with very few friends, watching TV was my only pastime. While I watched cartoons alone on most school afternoons, watching the World Television Premiere of some successful films on a Sunday evening with my parents is a core film-viewing memory. It was only after I stepped into adulthood that I started visiting theatres more often to watch a few films, and for the rest I relied on my hostel room's Wi-Fi connection and my experience of using torrents.

Sizing India's film business

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With more than 10,000 theatres across the country, revenue from theatrical film exhibition in India are projected to reach INR 384 billion in 2024 and cross INR 512 billion in 2029 (Source). This number is miniscule compared to USA and China, but makes sense in the context of India's connectivity, technological penetration, disposable income and entertainment preferences.

Anecdotally, Indian film industries churn out scores of film every year, however their budgets and scales have been fairly modest. This trend has drastically changed in the last decade due to global critical acclaim and financial success attained by films like the Baahubali duology and Dangal. The stupendous success of the magnum opus RRR at the Oscars and Golden Globes have definitely put Indian films on the map of world cinema.

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Business Model Of Films By Dummies

There are three key aspects of the business of filmmaking - production, distribution and exhibition. Production encompasses selection of the base story or concept of the film, hiring or selecting writers to expand it into a screenplay with dialogues, hiring or selecting the director and other technicians, casting actors, readying the inputs required for filming, shooting the content and then enhancing the content with dubbing, re-recording, background score, DI, VFX+CGI and other activities.

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Distribution involves the sale of audio and movie streaming rights to respective platforms, television rights to a TV network and sometimes dubbing rights to a specialist company. Production companies aim to recover the production costs and earn some profits through these sales. As the production company sells various rights, they decide upon a date for the theatrical release of the film in consultation with the industry's producer and distributor governing bodies, and streaming release dates with their partner platform. The extent of preferential treatment given to a film in setting a release date is directly proportional to the value of its theatrical and streaming rights, which is linked to the film's budget.

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Distributors prepare for theatrical exhibition of the film by signing agreements with theatre owners and multiplex chain management. These agreements outline the number of shows, ticket prices and revenue share between the distributors and theatre owners. Andhra Pradesh, Telangana and Tamil Nadu have a cap on ticket prices; although the former two states allow this cap to be raised for some films with prior permissions from the Government.

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Sustainable Scaling Of Film Production

More and more films with bigger budgets are being produced every year, as production companies and directors look to bring together ensemble casts, utilise modern technology and creating multi-verses of characters, akin to the Marvel and DC Cinematic Universe from Hollywood. However, reports suggest that the lead actor's salary is the biggest cost incurred during the production of a star-led film. These salaries are market-driven, and both producers and distributors know that stars can single-handedly bring in massive footfalls and theatrical revenues in the release weekend itself, thereby ensuring that the distributors break-even on their investment at the earliest.

However, a film's financial success is hard to predict because it depends on the its reception and the performance of other films released during the same period. In situations where films severely underperform, actors have ended up part of their salary to compensate the producers and the distributors. Therefore, it makes more business sense for the sought after stars to adapt the profit-sharing model and divide their salary into a fixed component proportional to the number of days they allot for a film, along with a variable component linked to the theatrical revenue and the value of the streaming rights sales.

The Inevitable Intervention Of Streaming Platforms

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When the COVID-19 pandemic brought the world to a standstill, people sat up and took notice of streaming platforms. The massive influx of viewership emboldened them to sign exclusive deals with production companies to release films directly on their platform instead of theatres, giving them a lifeline and a way out of the accumulating interest.

While initial deals were pretty much always a win for the production companies, platforms have grown enough to enforce their terms and even revise the terms depending on a film's theatrical success and initial viewership garnered on their platform. I am not aware of the depth of their analysis of a film before signing or revising a deal, but it is a lesson that production companies could imbibe to choose whether to produce a film and decide the resource allotment and the scale of the publicity campaign and theatrical release.

The Not-so-Slow Death Of Cinema Theatres

If you are at least a 90s kid, you might remember the theatre where you watched a film for the first time. For most people, it is a single screen theatre that might have become defunct or even destroyed and replaced by a multiplex or a commercial complex. Apart from selected areas in some South Indian states, single screen theatres have fallen out of grace. Sudarshan 70 MM, a notable single screen theatre in the RTC X Roads area in Hyderabad and a big contributor to the financial success of some landmark Telugu films, was demolished in 2010 due to being unviable.

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PVR INOX - the biggest multiplex chain in India has grown multifold in the last few years, both organically and through acquisitions, but their latest financial report clearly signal a top-line and bottom-line downturn along with poor unit economics. They have also managed to restrict footfalls from South Indian films by choosing not to screen films with a theatrical window of less than 8 weeks, and have resorted to signing exclusive deals for re-releases of older films which did not garner enough theatrical revenue during their original runs. Things are probably worse for some of the smaller chains.

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Consolidation is the natural course in an asset-heavy industry like this, but distributors and theatre owners need to come together and find a way to make theatrical releases profitable for both parties without distributors having to press for higher revenue shares and theatres having to push food and beverage spends for top-line growth.

What's The Way Forward?

Streamlined processes, robust contracts, focus on the fundamental revenue stream needs to support creativity and innovation to make films a sustainable and more lucrative business to attract investors and audiences.

Did They Make Formula 1 Great Again?

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Has F1 become competitive enough for me to resurrect my dead blog after a year and a half? I guess so!

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I stopped following F1 after the 2022 season due to a couple of reasons - moving to another city for a new job and not being willing to buy the expensive F1 TV subscription when Disney+ Hotstar gave up the broadcasting rights. The 2023 season was pretty much dominated by two-time defending world champion Max Verstappen and Red Bull Racing, so I believe there isn't much I missed. But the 2024 season has been springing up a lot of surprises both on and off the track. I am just going to rely on the highlights of the qualifying sessions and races, but there's enough exciting news to be covered.

It's Not So Bullish Anymore

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After securing his maiden title in the last laps of the 2021 Abu Dhabi Grand Prix in a controversial manner, Max Verstappen dominated the 2022 and 2023 seasons securing 15 and 19 victories in 22 and 23 full-length feature races respectively. This season began in a similar fashion as Super Max secured seven feature race wins in the first ten races. However, other teams' car upgrades seem to be doing much better than Red Bull, and that has led to Max not even getting on to the podium in the last four race weekends. His radio messages during the Hungarian Grand Prix made his frustration pretty evident.

On the other side of the garage, Mexican driver Sergio "Checo" Perez has seen a downturn in his fortunes especially after Miami. He has been out-qualified multiple times by Williams driver Logan Sergeant, who will be leaving the team at the end of the season after failing to make an impression in his season and a half with the team. He is currently seventh in the drivers' standings behind the McLaren and Ferrari and Lewis Hamilton, and could have even been surpassed by George Russell if not for his disqualification in the Belgian Grand Prix. While his contract extension until the end of 2025 season was announced earlier, there were wild speculations of him being replaced by veteran Daniel Ricciardo or Red Bull junior Liam Lawson.

Max is still 78 points clear at the top of the table, and he might still be able to win his fourth straight title in a less comfortable manner even without winning all races. But Sergio needs to reinforce the trust placed in him by the Red Bull team management who announced that he will stay with the team, and step up his performance to ensure that the team secures their third successive Constructors' title ahead of the rising McLaren team.

Papayas With A Purpose

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F1 fans would remember Fernando Alonso's famous radio message "GP2 engine!" as a McLaren driver. Under the leadership of Zak Brown, the British team has seen a change of fortunes with their initial resurgence led by Carlos Sainz and Lando Norris. Their bet on Daniel Ricciardo didn't pay off, but the "Honey Badger" was replaced by a young compatriot - F2 and F3 champion Oscar Piastri in the 2023 season. In his debut season, Oscar secured consecutive podiums in Japan and Qatar and ended up at the 9th position in the drivers' standings. His experienced teammate Lando Norris had a rocky start to the 2023 season, but bounced back with seven podium finishes out of which only one was at the third place. However, a race win still remained a dream for the British driver in his fifth season in Formula 1.

This season has been at least half a meteoric rise for the papaya team as both drivers secured their first feature race wins, with Lando climbing up the top step at the Miami Grand Prix and Oscar tasting victory at the Hungaroring thanks to a better race start than his teammate who started the race at the front of the grid. Lando has had mixed luck with a combination of some poor race starts, racing incidents like the crash with Max at the Red Bull Ring and some team mistakes like the slow pit stop at Silverstone which cost him the lead. Oscar has stepped up and worked on his tyre management woes from past season, and already secured four podium place finishes including his race victory, half as much as Lando's eight podiums in 14 race weekends.

Lando would really wish to give his best friend Max a good run for his money in the race for the drivers' title, while Oscar could be the dark horse in the Constructors' championship if Sergio Perez doesn't effect a major turnaround of his fortunes.

The Appalling Alpines

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The F1 outfit of the French automobile manufacturer has been through a lot of flux in the recent season with changes in driver lineup and management, but their success has almost completely faded away this season. Despite having two race-winning French drivers at the wheel in the form of Pierre Gasly and Esteban Ocon, this has been a season to forget with the car lacking any form of competitiveness. In fourteen race weekends including a few sprint races sprinkled in between, both drivers combined have managed to secure only ten points and the eighth position in the constructors' standings ahead of Williams who has scored four points and Kick Sauber on zero.

Last year, Bruno Famin replaced Otmar Szafnauer as the Alpine team principal mid-season; and this year the 36 year-old F2 team Hitech GP owner Oliver Oakes has been handed the mantle mid-season. On the driver front, Esteban Ocon has announced his departure from the team at the end of the season as he joins Haas which will have a completely new driver line-up with both their drivers departing. I wonder if Pierre will also seek to abandon this currently sinking ship and move to another team like his teammate. On the other hand, there has been talk that Alpine is contemplating replacing the Renault engine with a Mercedes engine. Will these changes happem? Considering their recent track record, even more changes might be afoot!

Not-So-Smooth Operation

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The word "underrated" has become extremely overused, but I believe it best describes one driver currently on the Formula 1 grid - Carlos Sainz. Sainz has driven for four teams so far - Toro Rosso (now called Visa Cash App RB), Renault (now called Alpine), McLaren and now Ferrari; and almost everywhere he has surpassed his teammate and helped his teammates and teams become more competitive.

After Lewis Hamilton announced that he had decided to leave Mercedes to join Ferrari, Carlos had to look for another seat on the grid. The push for relaxation of age regulations seems to indicate that Mercedes are eager to bring F2 rookie and academy driver Kimi Antonelli alongside George Russell for next year, hence that door was closed. Mattia Binotto replacing former McLaren team principal Andreas Seidl as the leader of the Audi Formula 1 project probably made the team a less viable option. Sainz finally ended up signing up with Williams, which many fans including me see as a massive downgrade compared to a competitive team like Ferrari. But Sainz's history in F1 shows that he has mostly been at teams who have struggled and helped them past those struggles, and James Vowles would hope for nothing different from the "Smooth Operator".

Rising From The Ashes

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After dominating the sport for close to a decade and winning several drivers' and constructors' titles along the way, the last couple of seasons haven't been exactly rosy for Toto Wolff's team. Fortunately, unlike smaller teams they have had two less problems - the drivers. Sir Lewis Hamilton is a modern-day legend in the world of motorsport and has taken the car across the chequered flag on three wheels at Silverstone in 2020. Young driver George Russell also cut his teeth at Williams as he managed to get a pole and score points with a car which on occasions felt under-engineered to even be fielded in a race. But Lewis Hamilton couldn't win a single race in the entire 2022 and 2023 seasons, and George secured his first and only win in the two seasons at Interlagos in 2022.

Both drivers secured points in the first two races, but the Saudi Arabian Grand Prix was one to forget for the team. Both drivers DNFed, but so did Max Verstappen as Carlos Sainz became a race winner. They got back to scoring points, but really got into the groove in Montreal where Russell secured the team's first podium finish of the season right ahead of Hamilton. The order got reversed in Spain, and George Russell finally secured his first win of the season at the Red Bull Ring, partly thanks to Max and Lando's crash which damaged the former's car and sent the latter out of the race.

George followed up the race win with a pole position at Silverstone ahead of Lewis, and both drivers valiantly fought off a formidable attack from McLaren drivers Norris and Piastri until a slow pit stop from Norris put him out of contention and eased the way for Lewis Hamilton to secure his 104th race win almost a thousand days after his 103th. The papaya drivers did fight back with a 1-2 in Hungary including a maiden victory for Piastri, but Merc came right back with an on track 1-2 for George and Lewis, only for George getting disqualified due to his car being underweight and losing the victory to Lewis. This surge in performance has really set up a good farewell for Lewis before he dons the red Ferrari overalls next season, and a great opportunity for Russell to step into the #1 driver role for next (and even this) season.

Predictions For The Remaining Season and Post-Season

Max Verstappen will successfully secure his fourth straight Drivers' title with Red Bull Racing, and might even get the team across the line in the race for the Constructors' championship irrespective of how his teammate does in the remaining races. The contest for the next five positions in the standings is going to be tastier, but Lando Norris might emerge ahead of teammate Oscar Piastri. Lewis Hamilton could also potentially pip the guy he replaces at Ferrari as Mercedes' return to form continues.

In the drivers' market, Kimi Antonelli joining Mercedes alongside George Russell is all but confirmed. At Alpine, the only viable option to replace Ocon seems to be academy recruit Jack Doohan. Could Sauber sign another German driver alongside Nico Hulkenberg in the form of Mick Schumacher to prepare for their transition to Audi in 2026? The Red Bull sisters team situation also has a lot of scenarios - Perez doing well and keeping his seat for 2025, Perez failing and losing his seat to Ricciardo while Liam Lawson joins Yuki Tsunoda at VCARB, Yuki getting promoted to Red Bull and Ricciardo deciding to move on from F1 to pave the way for a brand new line up at VCARB - anything seems possible at this point. So expect the unexpected until Formula 1 returns!

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Formula 1 2022 Season Retrospective

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A brief discussion about the biggest talking points of the biggest ever season yet of the sport.

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The biggest ever season of the sport yet concluded last month at Yas Marina Circuit in Abu Dhabi. Red Bull's Max Verstappen who had already confirmed his second consecutive title in Japan saw the chequered flag first, notching up a record fifteenth win of the season. Ferrari's Charles Leclerc finished second in the race and the championship ahead of Red Bull driver Sergio Perez.

A major technical regulation change promised a lot of action on track, but drivers and teams provided even more action off track. Everything has been discussed extensively in the media, so I will stick to talking about the things that made me take notice.

Champions and Challengers

The earlier stages of the season seemed to indicate that Max Verstappen and Charles Leclerc will have a close fight for the Drivers' Championship, and their respective teams will lock horns in the Constructors' Championship. However, a mix of strategy mistakes, reliability issues and damage control to prevent a budget cap breach led to this title challenge ending a lot sooner than expected.

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In his first season for Mercedes, George Russell finished in top five in eighteen races and even secured his maiden win at Brazil; a race Sergio Perez would like to forget. Checo did build up a substantial enough gap, but would have hoped for more success to avoid being treated as a support for Max.

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Middling Midfield

Alpine and McLaren engaged in a close midfield fight as expected, but both teams were plagued with different issues and therefore ended up quite far from the top three teams. 42 year old "rookie" Fernando Alonso was at the top of his game in a performant Alpine, but ended up with six DNFs thanks to its reliability issues. McLaren's marketing team did a better job than their engineering team, but Lando Norris outdrove the car while overcoming multiple bouts of illness to get the team's only podium finish.

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Esteban Ocon's performances didn't stand out much, but somewhat better luck helped him finish ahead of his teammate. On the other hand, Daniel Ricciardo had his worst ever season since replacing Mark Webber at Red Bull in 2014; culminating in him returning to his original team with a fat payout from McLaren for a premature contract termination.

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Surprise Switcheroos

Sebastian Vettel's retirement announcement triggered a series of driver transfers for the next season. Fernando Alonso took up Vettel's seat at Aston Martin, and Alpine immediately announced Oscar Piastri as their new driver. However, Oscar publicly denied this move in one of the most famous tweets associated with F1 and decided to replace fellow Australian Daniel Ricciardo.

Alpine finally signed French driver Pierre Gasly from AlphaTauri ending a long-term association with the Red Bull Academy, and AlphaTauri signed Mercedes reserve driver Nyck de Vries who scored points in his first F1 race filling in for Red Bull Academy graduate Alexander Albon, who decided to stay with Williams for the next season.

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While Nicholas Latifi losing his Williams seat to American driver Logan Sergeant after three seasons came as no surprise, Haas shocked some people with their decision to replace Mick Schumacher with Nico Hulkenberg, whose last full season in Formula 1 was in the Renault car in 2019.

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Management Mishaps

F1's sporting regulations were already under the scanner due to the sequence of events that happened towards the end of the 2021 Abu Dhabi Grand Prix. Despite this there were noticeable slip-ups in stewarding across the season. It seemed that track limits were not tracked uniformly across circuits, and stewards also ended up giving judgements on a few racing incidents after the race ended, thus preventing drivers and teams from reacting to these incidents.

However, nothing could beat the deployment of a tractor for recovering Carlos Sainz's crashed Ferrari on track, as Pierre Gasly approached at a fast pace unaware of its presence. The memories of the accident in the 2014 Japanese Grand Prix which ended the life of Jules Bianchi are still fresh, and the sport can do a lot better at enforcing protocols which ensure the safety of both the drivers and the marshals.

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Cash Crunch

The budget cap became a point of contention for all teams, and the news of Red Bull and Aston Martin breaching it in different ways led to strong reactions throughout the grid. Ferrari apparently had to turn down the engine in the later stages of the season and compromise performance to preserve engines and prevent a potential breach.

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I believe budget caps are also being thought of in a similar fashion as restrictions on number of engines, powertrains and other components; which might lead to more teams allowing small breaches instead of trading off performance. Whether imposing budget caps really brings all the teams on a level-playing field is a tough question to answer, but hopefully the structure of these restrictions will become more robust with passing time.

Looking Ahead

The numbers for 2023 represent a bigger follow-up to an already massive season. Next year, the sport will travel to 23 venues across the world including the debut of Las Vegas as the third Grand Prix in USA. The number of sprint races has been increased from three to six. Six teams will field a new driver alongside an existing driver, including two debutants and one veteran. Four teams will undergo leadership change, and teams will learn from the positives and negatives of 2022 to improve their cars with FIA providing some relief for the porpoising issues. The increasing scope of logistics seems to go against the net zero goals of the sport, at least on the surface; but the growing popularity of the sport especially outside Europe is encouraging for a stronger top line and bottom line.

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Immutability: The Future of Linux

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A look at two similar and one unique implementation of application containerisation and immutability in the Linux ecosystem.

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One of the first big problems that many new Linux users encounter is when they break their system while trying to add or remove applications, when they don't understand the impact on other installed dependencies. A popular example of this is tech YouTuber Linus Sebastian breaking his system while trying to install Steam.

However, with increasing Linux adoption for personal desktops and workstations, there has been an advent of new Linux distributions which isolate the base system from user-installed applications to eliminate breakage and create repeatable (if not reproducible) systems. In this post, I try to understand and explain three popular Linux distributions which champion immutability and reproducibility using two different approaches.

Application Containerisation

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Docker and Kubernetes, industry-standard tools for creation and management of containerised applications, have made the concept mainstream in the application development space. Red Hat and SUSE brought these principles to operating systems with the Project Atomic and openSUSE Kubic respectively, which have now been retired and replaced by Fedora CoreOS and openSUSE MicroOS respectively. These systems have also been adapted for desktops and workstations.

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Fedora Silverblue

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Silverblue was first presented as an official spin of Fedora Workstation in October 2018 with the release of Fedora 29. While both distributions are identical in appearance, the distinction between Silverblue and Workstation can be explained in three parts - the base system, GUI applications and command-line applications.

The base system uses rpm-ostree, a packaging system created by combining libostree with Fedora's package manager DNF. The system update mechanism is atomic, i.e. a new image is generated and applied. This allows users to choose from multiple images to boot into, and also rollback easily to the last working state in case of any failure during updates. The base system is intended to be identical by default in terms of packages present, but Silverblue also provides the flexibility of layering packages over the base system.

For installing GUI applications, Silverblue recommends Flatpak, a universal package manager which creates a sandbox comprising of the installed applications and their dependencies separate from the base system. These applications can be installed from the Fedora Flatpak registry or an abridged version of Flathub, the official advertised app store.

For command-line applications, Silverblue comes pre-installed with toolbox based on Podman, a drop-in replacement for Docker. Users can use OCI images for a minimal base to install command-line applications, and even GUI applications (although Flatpak is recommended). Fedora provides official images, and the community has created unofficial images for other popular distributions like Arch Linux and Ubuntu.

openSUSE MicroOS

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The architecture (for lack of a better word) of Silverblue and MicroOS is quite similar, but the implementation is somewhat different in all three parts.

The base system of MicroOS uses their default package manager zypper under the hood but delivers atomic updates and rollback functionality by creating snapshots of the BTRFS subvolumes using snapper. Another difference is the absence of layering, thus making the base images 100% identical across deployments.

Users have complete unfettered access to Flathub for installing Flatpak on MicroOS, unlike Silverblue which provides the Fedora Flatpak registry and a curated version of the Flathub, thus limiting the application availability for the latter.

And finally for command-line containerisation tools, users also have the alternative of using distrobox which works with both Podman and Docker and provides images for more distributions, thereby seems to be less limited than toolbox.

openSUSE MicroOS is still deemed as alpha software, but it seems to edge out Silverblue with the use of standard tools like BTRFS and snapper, unfettered Flathub access and the out-of-box availability of distrobox.

Nix and NixOS

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While working on his Ph.D at Utrecht University in the Netherlands (read his thesis), Eelco Dolstra created the Nix language for the cross-platform Nix package manager, which provides a way to create reproducible builds of packages and by extension, as evidenced by NixOS.

NixOS provides the same features as the aforementioned distributions, but manages them in a very different manner. It provides an immutable root file system by replacing all global system directories with the /nix/store directory which contains all the binaries and configurations for various system components in their own directories. This aids features like installing multiple package versions, atomic upgrades and rollbacks and rebasing based on changes made to the configuration.nix file, which can be used for deploying reproducible builds across multiple machines.

Apart from NixOS, the Nix language and package manager has also inspired a number of projects which take tools like Docker and Kubernetes to another level. The package repository nixpkgs contains over 40,000 packages built for Linux and MacOS. However, NixOS is meant for the more advanced users and comes with a steep learning curve involving understanding this domain-specific expression language.

Final Thoughts

Linux and Unix based operating systems based on the immutability principle are making the experience more user-friendly for non-tech inclined users who want a just works system and advanced users who desire granular control over the system without the risk of data and other losses. I personally have been using Fedora Silverblue for the last three months and it has been an Adwaita experience. I am getting to learn more thanks to people like Jorge Castro who writes almost exclusively about these systems on his website.

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