Should Linden Lab Charge SL Users to Keep Excess Inventory? It's a Hidden Subsidy Hurting SL's Economy
In the ongoing conversation about ways Linden Lab could replace the revenue lost from disappearing sims, Metacam Oh made a very sharp point last week: "Inventory takes up space but you are not charged for inventory. There could be 10,000+ free accounts with unlimited inventory that others are paying the freight for." This is very true, especially when it's not uncommon for SL users (with free accounts, even) to have tens of thousands or even a hundred thousand items in their inventory. Back in my Linden days, Linden Lab considered the idea of charging people to own inventory over a certain amount, and I'm even more convinced it's a plan they should finally put in place. Because spinning off from Mr. Oh's point, well-known SL "land baron" Desmond Shang added a comment which explains the huge problem of allowing so many users to have so much free inventory of virtual items:
"Basically, SL is a vast maze of unspoken subsidies.
"Every time someone logs in, buys a bunch of freeware and chats on voice all day, never spending a dime, that gets paid for. With hard currency, by someone.
"Now, of course, there are more ways to contribute to the world than with money. A non-spending resident's mere presence can be considered 'content' -- a compelling reason for other spenders to visit the grid. I have been a merchant and content creator myself for years; putting labor into the grid for reward isn't lost on me.
"The problem is that the subsidy structure doesn't make sense any more:
"Once deployed, Marketplace items have zero cost to the creator... forever. That's a long time. Contrast that to someone with over 70,000 USD annual fixed fees in place. [I.E. a land baron] I don't expect anyone to be an actuary, but seriously... a fixed expense line of exactly zero for Marketplace merchants makes no sense. Even if land was 100% free and out of the picture, it's basically locked out generations of new merchants. This is why I'm not surprised at seeing old guard merchants so opposed to the Marketplace subsidy taken away.
"As for me... my estate mostly adapted away from commercial ventures for the most part, a looong time ago. It had to. I'm out of this picture, and it's pretty clear that even if changes were made, anyone with any financial sense would just use Premium/Linden Homes or even mainland to offset costs, not estate land. The people that are punished by the Marketplace subsidy are largely the little guys, and anyone new. Not so much the land business any more. For us, that ship sailed two years ago.
"Incidentally... some of the big content 'fortunes' were made before SL Marketplace came around. Now to make a mint, you need to do all the art and scripting of a top breedable maker -- basically you need to become nearly a professional content business. Which is great, if you are a business! But not so great for the average person.
"What baffles me most, is how people hoping to break into the content business, or grow, are desperate to uphold the very thing that prevents it: The bloat of content still in place by the old guard of creators, and the giant wave of embedded competition that ensures they will be just another drop in the ocean until they too have thousands of items for sale.
"That's what a zero fixed cost expense line does. It's about like when a multi-billion dollar corporation pays no taxes... the fact that you don't pay taxes either, starting out to compete with them, is dwarfed by the advantage they have.
"Now, I'm off to make sure Linden gets my 5700 USD + 3.5% this month. I wonder how many zombie~merchants who left SL years ago, will be playing World of Warcraft or Skyrim during the same time... though granted, cashing out once a year takes a zombie merchant a good solid five minutes."
Emphasis above mine. I'm not sure, by the way, if Shang or Oh necessarily support the idea of monetizing excess inventory, but I sure do: Charge each user account (including alts), say, $1/month for inventory items in excess of one hundred, and you're bound to see SLers deleting old, unused items from their inventory. That will reduce load on Second Life's asset server, while also giving content creators a fairer playing field, while also giving landowners a new reason to rent out space to content creators on their property, which will help them cover tier. The loss of sims and revenue is staunched, while the economy grows more active and vibrant. Win-win-win all around.
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