Tom has installed Kodi on his Amazon Fire TV. This used to be Xbox Media Center, or XBMC. He's wondering how this can make money if it's free to use. Leo says it's an open source project. Developers may not do it for money, but they do it for recognition or just because they wanted it badly enough. They might also get jobs from it. This all started with Linus Torvalds who wrote Linux in 1992. He kept the copyright but gave it away. The internet also made it possible for programmers to work on a project together without having to be in the same physical location.
There is a donate button on the Kodi website, though. A lot of people will give money to the projects they care about, but it's not necessary. There are other ways to make money through open source software, too. Some of the Kodi developers may make money integrating Kodi systems and supporting it.
Is Kodi legal to use? Leo says yes it is, although there are ways it could be used illegally. It can be used with BitTorrent, which is also legal by itself, but it could be used to download movies illegally.