Over at New World Notes Hamlet Au has made a series of posts about lost revenue regarding sim losses and a couple of posts on how to introduce revenue streams to try and help the situation. The discussions have been somewhat heated, but I welcome Hamlet’s ongoing discussions on the tier issue. I can recall (although unfortunately can’t find any old posts) Hamlet quite some time ago posting that the tier model was too large a plank of Linden Lab’s revenue and that long term it’s unsustainable, so Hamlet is not a Johnny come lately to these discussions. He also posts the awful sim deathwatch series, of which I’m not a fan, but hey, these sims are disappearing.
Now two recent posts were on ideas for new revenue streams:
Now I personally disagree with both premises, in the first case with The Marketplace, the horse has bolted. This is the sort of thing that needed to be there from the start, introducing it now would be chaotic and bad PR. However I’m still not convinced that people should be able to list items via Direct Delivery to infinity and beyond, people should need to relist, but you don’t need to charge fees for that, although maybe a fee could be introduced if people want to list to infinity and beyond, but that wouldn’t be a long lasting fee.
The latter post I disagree with because the horse has bolted on inventory limits, they needed to be introduced from the start and how on earth would this be introduced. People would not want landmarks or group notice notecards, they wouldn’t want textures advertising new content, they wouldn’t want free gifts in case they went over limit and most of all, people would be miffed that their purchases were in peril, this would hit the economy.
However, although I don’t agree with the ideas, I do welcome the widening of the discussion. Unfortunately the comments tell a pretty sorry tale of blame games.
The problem seems to be that people feel their Second Life is threatened and get very defensive, indeed in some cases people clearly see the best form of defence as being attack. Merchants who benefit from the Marketplace feel that it’s Land Barons driving the case for Merchants being charged to use the Marketplace, it’s not, especially not the large Land Barons anyway who have top secret deals with Linden Lab already.
Premium Members blame Basic Account Holders for not being Premium Members. Basic Account holders blame Premium Members for not spending enough.
Small landlords and roleplaying sim owners blame the merchants on the marketplace for getting a free ride in terms of requiring land and feel they’re subsidising their profits. Merchants get annoyed that the time and effort they put in creating content isn’t being appreciated by these small land owners and that small land owners don’t appreciate that software and creation does have costs associated with it and that content creation assists with user retention. The small landowners then fire back that they are creating experiences for people to have something to do, which aids user retention and encourages those users to spend with merchants and that it’s the merchants who aren’t appreciating their overheads.
In short it’s pretty ugly and we all need to backup a bit because this is a community issue, not a specific subset issue. The dots need to be joined. Yes land owners are miffed that commercial rentals are on a downward slide due to the rise of the marketplace. However it makes perfect sense for merchants to use the marketplace, that’s where the shoppers are, it’s a lower cost platform, it is right for merchants to use the marketplace and land owners need to accept that this is where we are. The horse has well and truly bolted and there’s no going back.
However it would be nice if merchants could show some understanding of the situation land owners face, rather than getting all defensive when the discussions come up. Second Life needs merchants and it needs land for people to use those creations, it needs sims with something to do and all too many sims that provide something to do are creaking under the weight of tier.
The bottom line is that the tier is too damn high, but in order to reduce tier, Linden Lab need new revenue streams. These discussions can be useful if people can move away from the blame game and onto discussing the concept of new revenue streams. They are sorely needed, but can we please move on from the finger pointing. We need to consider Second Life as a whole, not our own little parts of it and it may be that there’s no way forward, that the tier that is too damn high and can’t be reduced, if that’s the case then it will be a great shame because the future won’t be so bright that we’ve gotta wear shades.
If the kids are united then we’ll never be divided….. always good to slip some Sham69 into a post!
I’ve been advocating a lowering of the outrageously high tier for some time now. Hamlet dismisses the argument tersely with a few words and says it’s “unsustainable.” Fact is, Economics 101 tells us that if you lower the price you will sell more. Clearly the Lab has a problem pricing themselves out of their own market because the number of private estates is slowly eroding. There is no new growth and hasn’t been for a long time. If you simply lower the price of tier you will find a balance point where growth begins to happen again. I challenge the assertion that the Lab needs new revenue sources to compensate. Instead of unreasonable profit-taking maybe they could invest a little back into their business so that it would then be sustainable. Look to the long term.
To be fair to Hamlet, he has long said the tier model is unsustainable. That’s the tier model itself, rather than the price being charged.
I agree that lowering tier can increase demand but Inara Pey recently blogged on how much revenue LL would lose by cutting tier without seeking other sources. I’m firmly in the tier is too damn high camp, it’s stifling for both creativity and user retention, I would love nothing more than to see tier slashed to more reasonable levels but I also feel LL need more revenue streams full stop.
I’m ok with high tiers when LL invests it into SL. They don’t.
They reported in their end of year blog post:
“in 2012 we made the single largest capital investment in new server hardware upgrades in the history of Linden Lab”
So in terms of capital investment, I think it’s unfair to say LL haven’t invested, in terms of community investment, that’s a different story, I don’t think it has ever been this poor.