{"id":2622,"date":"2013-01-15T20:38:10","date_gmt":"2013-01-15T20:38:10","guid":{"rendered":"http:\/\/sl.governormarley.com\/?p=2622"},"modified":"2013-01-15T20:38:26","modified_gmt":"2013-01-15T20:38:26","slug":"offsetting-tier-costs-ideas","status":"publish","type":"post","link":"https:\/\/sl.governormarley.com\/?p=2622","title":{"rendered":"Ideas On Offsetting Tier Costs"},"content":{"rendered":"

“Although we currently do not accept L$ in lieu of land sale and maintenance fee payments, we could. Acceptance by Linden Lab of just one month of land sale and maintenance fees in L$ denominated payments could cut the in-world money supply by more than 50%<\/em>.”\u00a0 – Zee Linden, 14th August 2007 – Second Life Economy Blog Post<\/a>.<\/p>\n

I’ve quoted Zee there, who was the chief financial officer of Linden Lab a while back, because The Marketplace arguments are tied tightly to the tier being too damn high arguments. I’ve argued in the past and continue to argue, that Linden Lab can’t cut tier until they find alternative revenue sources.<\/p>\n

Inara Pey has an excellent blog post explaining why slashing tier would be problematic: Tier Cuts : Looking From The Lab’s Perspective<\/a>. There are some eye watering figures on how much income Linden Lab would potentially lose from slashing tier by a third: “However, were the Lab to cut tier by one-third, they immediately slash monthly private region revenue by $1,400,520. That\u2019s equivalent to 4,747 full private regions vanishing from the grid \u2013 1.6 times more that the total number of private regions (full, Homestead and OpenSpace) lost in 2012.<\/em>”<\/p>\n

This is the stark issue facing Linden Lab and one which explains why tier is unlikely to be slashed anytime soon. However this doesn’t mean nothing can be done, Linden Lab need to get their thinking caps on but a couple of areas which could be investigated are with regards to timed usage and greater use of Linden Dollar sinks.<\/p>\n

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In my previous post I suggested including inworld items in Marketplace search<\/a>, with Linden Lab getting a commission from sales of those inworld items. How about further expanding upon this and saying that if you opted for a higher commission, that commission could be used to offset some of your tier costs. Now the problem with sinks (and Marketplace commission is a sink) is that it’s hard to evaluate how much revenue it raises for Linden Lab because it’s not direct income, but as Zee’s quote at the start of this post points out, in theory Linden Lab could accept Linden Dollar payments in lieu of land sale and maintenance fee payments, that was the case in 2007 and I’ve seen nothing to suggest it still wouldn’t be the case.<\/p>\n

There was once a merchant survey from Linden Lab that asked if people would be interested in free mall space inworld if Linden Lab took commission from sales, I think it may have been as high as 30%, but the idea about using Linden Dollars for fees is certainly not new and has been kicked around Linden Lab for a while.<\/p>\n

Another area Linden Lab could examine is charging sim owners a pro rata fee, so you’re not dinged with the full USD$295.00 fee a month for a private region. This could work along the lines of you always needing a balance of USD$295.00 in your account, as private tier is paid ahead (unlike mainland which is paid behind) this could work by the owner paying USD$295.00 first month, but if during that month they only had their sim online for a period which billed them USD$195.00 their next due payment would be USD$195.00, which would be USD$295 – USD$100 unused fees. This way people could decide they only want their sims online for certain hours a month.<\/p>\n

The problem there being that Linden Lab would take a revenue hit, the challenge would be whether it perked interest for people who have never thought of owning a sim due to the high tier costs, to decide that with managed billing, they could actually afford a sim.<\/p>\n

Whatever happens here, the tier issue will eventually come to a head. Tyche reports that we lost another eighty six private regions this week<\/a>, however we still have a very healthy 20,835 private regions on the grid. There’s plenty of time for Linden Lab to do something, income is still very healthy, but they do need to consider how they’re going to take this platform forward and addressing tier is a very big challenge, however it’s one Linden Lab need to meet head on. The tier is too damn high!<\/p>\n

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