4 Ways Charging SL Users for Excess Inventory Would Work -- and 4 Objections Not Worth Worrying About Much

My suggestion that Linden Lab experiment with charging Second Life users for excess inventory provoked a pretty interesting discussion last week, most of it negative to the idea, so it's worth a follow-up to explain why I still think it would (and should) work in greater detail. There's roughly 400,000 active Second Life users who buy and spend Linden Dollars, so if, say, 300,000 started paying $1 a month for their inventory, that would translate to $3,600,000 extra annual Second Life revenue for Linden Lab. And as I said in last week's post, Linden staffers have seriously considered charging users for inventory back in my time; as sim owners (the company's main revenue source) continue to drop away, it's fairly likely they'll start thinking about trying that inventory pricing proposal again. However, there's ways to do it that have a better chance to work -- and some objections to the proposal that are worth thinking about too:

It should be very low cost. This is why I suggested USD$1 or L$250 a month as a price point, a quite bearable cost for power shoppers. As reader Alazarin Mobius pointed out, "SL's shopaholics with their bloated inventories are already spending a small fortune on their SL experience."

It should exempt already well-monetized SLers. Premium subscriber? Boom, unlimited inventory for you. You too, land owner. Buy more than $8 worth of Linden Dollars a month? You can keep your bigass inventory for free. (And I like this last idea quite a bit, since it would incent users to buy at least $8 in Second Life a month.)

It should be rolled out after releasing improved inventory management tools, and help subsidize further improvements to the inventory UI. No point punishing people for having large inventories when the inventory management UI is so horrible and difficult to use. So before charging longtime users, create some basic tools to make inventory culling much less of a headache, and iterate over time. (I'd personally love a way to delete all inventory accessed only once or not at all with a single click.)

It should be matched (if successful) by land tier decreases. Land owners are paying exorbitant rates for owning small amounts of virtual real estate, which subsidizes the rest of the userbase to own large amounts of virtual items, but who pay nothing to own them. However, it's impossible for Linden Lab to decrease tier without replacing the revenue they'll inevitably lose from a tier price cut. So let's spread out the costs of running (and profiting from) Second Life more evenly among the userbase.

That in mind, let's look at four objections to this pricing structure, which are easily addressed:

It will be evaded by the use of multiple alt accounts. Yes, it's likely that some users, rather than paying $1 a month, will spread their inventory out among several alternate accounts. My guess is this will be fairly rare, since it's so time consuming, and since inventory items are so intrinsic to avatar identity. However, there's an easy solution to this: Charge users who own alts with excessive inventory a premium fee too.

It punishes content creators and consumers. Linden Lab's best consumers -- land owners -- are already being punished, so to speak, by high land tier which effectively subsidizes virtual object content creators and consumers. So better to think of charging for inventory not as a punishment, but as I said, a fairer distribution of costs among users.

It will cause people to leave Second Life. This is the recurring threat any change to Second Life engenders, but here's the thing (which I'll talk about in more detail): Historically, Second Life policy, viewer, and pricing changes have not generally caused a decrease in usage -- only a change in user behavior. So while it's quite possible charging for inventory would cause some user backlash, it's unlikely these users would simply leave SL. Past behavior suggests they'll just figure out ways of staying in SL without incurring the inventory cost. If that happens (and it's unlikely), it's still easy enough for Linden Lab to drop the inventory charge as a failed experiment.

I don't like it, and therefore it will fail. I just wrote a whole post about that one. But it's interesting how passionate many readers get against the idea of having to pay a very minimal fee for owning thousands and thousands of objects. But I think the heart of this passion is fueled by a categorical misunderstanding:

At heart, Second Life objects are not actually objects, but data. On servers. That are owned by Linden Lab. Which are now largely paid for by the minority of users who own land in Second Life. Which is not actually land, but also data on Linden Lab's servers. But because this fact is often forgotten, asking everyone who actively uses SL to pay their fair share of data usage is prone to provoke passion. And while no one likes having to pay for something that used to be free, surely there's something everyone reading this dislikes even more: A Second Life that cannot sustain itself beyond the next year or two. Which is where this categorical misunderstanding is leading us.

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Comments

[Shockwave Yareach]

Then you pretty much wipe out 95% of the people who'd pay anything. Spend 8$us a month? I think most basic accounts easily clear that hurdle by having to rent some land from the land baron. About all it would take is a reasonably sized 2K parcel a month and paid for by buying L, and you'd be set.

Otherwise, 1$ a month wouldn't bug me a bit. But if the tier doesn't go down, it won't stave off the exodus one bit. You've all said for us to vote with our wallets -- we have. Fixing the mess after our wallets are closed will be pointless, as we won't trust you with our money again. Fool me once...

[CronoCloud Creeggan]

Hamlet Hamlet Hamlet...not this...again.

This is a "stick" approach to increasing revenue, they'd be better off using a carrot approach, adding features TO premium accounts to get more people to sign up for one.

but I want to respond specifically to this comment:

Linden Lab's best consumers -- land owners

Actually, no, Linden Lab's best consumers are the ones that PAY the land barons the L$ that they in turn pay to LL. In other words, the person who rents a 1024 from generic ebil land baron. The land Barons are just middlemen...the real consumers are the masses.

Look at it this way, if everyone in Caledon stopped renting, do you think Des would keep those regions open? No way. So that means LL's real customer/consumer isn't our Great and Glorious Leader Shang, it's the people who rent from him.

The thing we want to do is get more of THOSE kind of people spending, and it isn't tier costs that's stopping them because THEY don't own entire regions. To paraphrase Bill Clinton and not implying you as an individual are stupid: " Part of it is the Freebie Economy, stupid"

The builder/scripter who bought his furry form in 2006 and hasn't bought anything since...he's part of the problem.

The Fashionista who spends all her time on hunts for freebies and group jumping just to get the newest group freebies, so she doesn't have to buy L$.

The people who are so used to pirating other content like movies or games, that they refuse to spend money in SL and try pirating content in SL as well.

Look, those of us who do spend money in SL ( I have a premium account AND buy from the Lindex) have budgets. SL is part of my unofficial "fun budget". I have a limit to that. Others like me also have limits. I am really not going to be increasing my spending in SL anytime soon. So while I agree with monetizing those not spending in principle...but not with you "stick" approach.

I think you'd understand that better if you spent more time in SL talking to the masses.

[Metacam Oh]

Great post Hamlet, I agree completely. Some people would rather speculate the SL will die rather than pay $1 extra while SL is being kept afloat by people paying $295+ a month for an arbitrarily sized plot of fake land. You can lease a BMW for the same price as a sim. Obviously you can see the value doesn't match the price.

[Iris Ophelia]

Don't content creators essentially pay for the data storage already with upload fees?

Do upload fees go away if users become responsible for storage fees?

Does a content creator have to pay TWICE for the right to make stuff and keep it?

When/if I buy my L$, am I then paying a fee for the right to buy things that I then also have to pay to keep?

What if my inventory items, which I am paying LL to store, go missing from the database (as they often do.) Does LL have greater responsibility now because the service I am specifically paying for has failed?

You also overlooked the biggest exploit here: What if I just put all my stuff in a box and put THAT in my inventory?

I see your point, but I think this idea needs a lot more work. Ideally from the people it would actually affect, namely content creators and hardcore consumers.

[CronoCloud Creeggan]

Metacam, no one is forcing anyone to rent regions.

And people weren't complaining about that in the past...so what has changed. I'll tell you what's changed, RL economy. That's the villain, not LL. The real reason people are complaining about tier is RL finances restricting their "fun budgets". You can't blame LL for that, especially when LL has to support 10X as many users as it did in 2006.

You expect them to pay support costs and hosting costs for the same amount of people and MORE land with less money. That's most likely a no go.

[Ciaran Laval]

@Crono "Metacam, no one is forcing anyone to rent regions.

And people weren't complaining about that in the past...so what has changed."

People have long been complaining about the cost of land tier and paticularly with private regions, once upon a time they were USD$195.00 a month, only the grandfathered ones have survived the transition to USD$295.00.

The tier is too damn high, it's not a new problem though, although the march of the marketplace and the RL economy have both made revenue streams for sims harder to achieve, one is something LL have foisted upon the masses, the other isn't.

[Ciaran Laval]

The horse has bolted on inventory fees and limits, this is a non starter.

Inventory would need a drastic overhaul, all those landmarks, notecards and adverts all add to the size of the inventory, not only would this suggestion hit merchants due to consumers being more wary of purchases, even with regards to freebies, it would also hit communications.

I can just imagine profiles that currently ask customers to fill out notecards and send them being changed to people begging people not to send notecards!

I'm all for LL finding alternative revenue streams but this isn't the way to go.

Crono is on the lines I support, more features for premium accounts. New revenue streams need to come from new perks, not nerfing existing perks.

[A.J.]

It wouldn't be a bad idea if people were lining up to get into SL... but they're not!

The problem isn't that the SL dwindling population needs more money milked out of them.

The problem is LL needs to pay attention to the existing population and get them motivated to want to bring their friends into the world and play.

That's what we used to do when we loved this place. The Lab needs to bring back that lovin' feeling before it's gone, gone, gone.

[Ciaran Laval]

There's no tenderness like before in our fingertips, good point A.J.

One thing that is oft overlooked in ways of getting more revenue is that of new users. The new user experience remains pretty horrid.

To be fair to LL, they are on their Amazon adventures with that link and Steam will hopefully arrive one day.

[rjs]

All I can say is that for mere technical reasons, I believe it should be implemented in OS/Aurora-Sim.

SL most likely wouldn't want to take the risk of such a drastic model change where watching the amount of inventory becomes paramount. But make no mistake about it, technically, if it were possible to limit via the software, it would provide a better overall experience to the wider audience.

Loading 105,000 inventory UUID's/Items vs say 20,000 is more than noticed in terms of system resources. It's not just a UUID, and inventory does indeed take up a large amount of resources. Images alone can run a database size through the roof. And this space does indeed cost. Whether the Lab ever contemplates implementing this measure or not, I sure hope at some point the developers for OS/Aurora do.

--rjs

[rjs]

Another thought addition, Aurora-Sim has a module called BlackHoleAssets that allows all assets to be pulled from the hard disk storage via UUID. This is also something else that scales better than having a mySQL database structure that holds and stores the countless duplicate entries. Part of the Linden issue since the beginning was the "scale" factor. At some point, throwing more hardware and bandwidth at the problem becomes more than obviously a negligent remedy.

--rjs

[Chav]

Hamlet, haven't you said you have a tiny inventory in SL? That makes you weird, if so. Most people have masses of stuff and that stuff is integral to how they enjoy SL. Do you really think those who pride themselves on never buying anything are going to pay to keep stuff? Or just leave? A dollar would never happen, the Lab overcharges for everything.

This just reads like the mutterings of someone who doesn't have much stuff to worry about. It's not different from midgetatars complaining that everyone else is too tall.

[Angie Mornington]

Correct me if I'm wrong but all people would have to do is stuff their stuff in a few boxes to solve their inventory 'excess'.

[The Tier Is Too Damn High Party]

LL bet the house, basically, in setting itself up as a rentier during a time when the credit economy IRL was riding an unsustainable high. It is now in a psychological deadend of still thinking 2007 in 2013. Reality has changed dramatically *everywhere* except in the minds of Mrs Havershamesque SL.

A measly L1/month for inventory isn't the issue for someone like me, bascially a consumer resident. If I had $295/month in fun money to spend on having a region of my, I would, why not? Since that's not the case, I've always rented and spent a great deal of rl dollars on top of that, (my piece of SL heaven ran about USD60/month - and that on a free account!) So, again, $ is only part of the story here.

Among the reasons I cut back drastically on SL is 1) lag 2) empty -- but lag free! -- sims 3) landlord issues like shutdowns (not landlord's fault) 4) utter lack of response from LL concerning issues. These are technical issues LL can and should address.

Expensewise, by far the biggest was rent. Even if LL lowered tier, that doesn't mean the so-called landbarons would give renters a break. They have their own margins to consider. Yet, I don't want to give LL $72 for a teeny house on the mainland, sorry. If I'm going to spend, I want more space, more prims, etc.

Seriously, rather than trying to squeeze blood from a stone, LL might consider makingSL an easier, user friendly, diverse world. I don't want an account so I can have a teensy house and some "free" lindens thrown at me, hello I spent plenty without that inducement. FB, apps, etc. -- fine as far as they go, but if they don't bring in new residents who spend, well, Second Life good night.

[Samantha Atkins]

My objection to this proposal is that anyone competent in web-scale database can tell you that the inventory of SL users is not exactly Big Data. This amount of information should be trivial to support at very low cost these days and with much better performance than we currently suffer and with far less clunky and limited interfaces. To say we should be charged extra for already paying more than a 'normal' share of SL goods tax to LL is absurd. In my opinion it shows a singular lack of understanding of what is really killing SL - too high costs to users who are there for more than a bit of entertainment - those who wan to create at some scale and those who want to run businesses and events.

I predict than within the next 2-3 years Kitely and other opensim alternatives will be the new home almost all of the creatives still in SL who don't move away entirely to something like Unity3D. SL today has slower performance, very expensive regions, much more restrictive terms, no user accessible content backups and is becoming a relative ghost town compared to its former virtual world place to be.

[Ilsa Hesse]

A few "wonders"
1) when I buy something from a content creator, am I not helping pay the tier on the island they rent? do you think they would continue to have the island if people like me did not buy their stuff? in effect, I pay tier, even if I only personally own a 512 lot.
2) you want to rent more sims out? go back to charging less for non profits and schools... you cant tell me that it costs monthly 199 times however many sims they put on a server to keep it running... The reason SL is of value is because it is a large grouping area, if you start removing reasons for people to come here (like colleges and non profits being here) then eventually you kill enough of the reasons, and people go away.
3) do you think buyers of SL products do not own land? where do you think I put all the junk I buy? land either I own, or borrow from other owners.
4) want more people to buy sims, bulk bulk bulk... if you charge less, you create more interest. you cant just create sims and expect people to buy them, there has to be a logical reason, and has to be reasonably priced... if I am going to be here as a hobby, 299 is way to much for me to pay for a "game"
5) want to monetize SL? allow bridging to other grids... if SL bridges to others, then they can leverage the Linden in to a position as a true "internet wide" monetary unit... till then, it is just the "EQ Plat" of SL, replaceable by any other sort of unit, from pixel shells to pixel gold...
the big complaint I hear about this mostly is that it would allow people to own cheaper land on other grids, etc. well, since those are the places where the "intelligentsia" is going since LL decided to get rid of them, then maybe LL should worry about that... in addition to leveraging the Linden to make it the wider used monetary unit (seriously, do you think that some other unit from another grid would replace it?), in addition, you could force other grids to own a sim in SL as a "crossover point" or something.
6) I am not really _against_ Second Life being a bit more expensive for some random reason, a dollar doesnt really mean that much to me... but basically, when LL never responds in any sort of timely manner to ARs, seems uninterested in what we, the payers (did not forget the L) think, and seem more interested in creating "whiz bang" something else rather than improving quality here, it makes me wonder if they dont realize that without residents it is very very hard to keep stock holders.
thanks
Ils

[Ilsa Hesse]

It is counter intuitive, and a bad business model to push people away from SL, then make the people who stay pay more to cover the losses of bad leadership.

[Orca Flotta]

Stupid idea, could be one of LL's own.

I show you in a very small, but very real, example what's happening in the virtual world:

My inventory is about 32k. Not too huge for a 6 y/o avie, isn't it? So LL didn't earn much from me in sales tax, also coz I buy my shit inworld wherever possible and seldom make use of the MP.

Ok, with that out of the way I'm paying my annual premium fee and tiers for 4096 m². I guess that makes me kinda the typical small time resident, the woman in the streets.

Anyhoo, lately me and many of my friends in the sailing community are so disgusted with LL's subterranean service level we just keep dropping our parcels and sims. Yes, mighty mouse me is about to tier down and drop my premium account. Why? Because it's just not worth the price. Premium fee + 29 US$/month for crap? No, not any longer.

OTOH, if LL would be wise and lower the tier substantially, I would even feel tempted to buy more land. See I love SL, love to be here, hate to spend less time and money ... but as things are now I can't find any reasonable excuse to keep up even my minimalistic existence in SL. My hubby is already complaining about the amount that's misssing from our bank account and that he gets less sushi and beer just because I'm playing that stupid computer game.

Catch my drift?

So, clear course of action for me: getting rid of my land and back to basic account. Will become a freeloader now, keep hubbby happy and save up for a new computer.

[WW]

Over the years, I've spent more money in SL buying things than I have paying tier or rent, even counting my premium membership. And I would like to think of myself as in for the long haul. Although I do wonder sometimes how long that haul is going to last or what direction it may take. Having said all that, I would gladly kick in a modest and reasonable amount regarding inventory management, as an additional monthly fee, or an increase in my membership fee, if I had the means to do the following:

A. Give me an improved, solid, feature-rich means of managing my inventory, either in the viewer itself, or perhaps an off-world accessible website, or maybe even an additional, dedicated inventory management client.

B. Allow a reasonable number of alts (maybe four max?) to be linked to one, certified, paid and funded account, and then allow inventory to be shared across only those alts.

I don’t consider myself a whiner or complainer, just a consumer/creator, but if I *did* complain about something in SL, the primary thing would be the lack of robust inventory management. Even without my “shared inventory between a limited number of certified alts” wish (item “B” above), which I suspect has been talked about ad infinitum and beaten to death in other discussions, I think it would be great to have item “A” above, having an improved means by which I can easily manage my inventory, in the viewer, on the web, or another facility (perhaps a dedicated inventory management client).

[Tracy Redangel]

If Linden Labs wants to generate more revenue, they're going to have to get creative in a way that will give something beneficial back to the consumer. If I saw the benefit in having a premium account, I would. I buy over $100 US dollars worth of Linden $$ each month to spend on my land rental and to shop with. I had a premium account for several months. It was a waste of money for me, because I don't own a full sim, I rent a 1/4 sim. I don't need the free chachkis, and the "extra" support provided is laughable. There is no real benefit in having a premium account unless you own land.
And btw, let's say for argument's sake the Lindens did charge for extra inventory. They wouldn't mention it, they would hide the cost in another "user" fee. They might raise the premium account fee from $9 a month to $10...$11...$15 or whatever. Granted, that plan probably wouldn't go over well either. But judging from these responses, if they were to announce "Hey everyone, we're charging for inventory storage now!" The mass mass bitching and kavetching would never cease.

[melponeme_k]

I'm totally against charging more for inventory. First because I'm a power user with a premium account and land (both LL land and Rented). I spend a lot of Lindens buying housing items and landscaping items. I already keep an eye on the size of my inventory and keep it below 25k (simply to load up faster).

I don't think I'm the only one who acts this way in SL. Most power users try to optimize where ever possible. To try and pull more money from us without any advantages is just extortion.

And to everyone complaining about Tier...it isn't going to change. Who do you think the sugar daddies and mommies are, backing up all these new, silly little games coming out of LL nowadays? Us. Our tier makes "Patterns" and other products possible. They are counting on our tier. Not going to lower it....ever.

[Lette Ponnier]

I'd like to respond specifically to the counter-argument to "It will cause people to leave Second Life." It's very true that every time LL considers or implements something unpopular, masses of people scream about leaving... and then almost none of them do.

In my experience, though, one of the main reasons they don't is, precisely, their inventory.

Inventory represents the investment of time and money that people have already put into SL. You could go to other grids and put up with their 2007-level technology and content. You could bring some of your friends with you, keep in touch with the rest out-of-world, and make new ones there. If you're a creator, you could even re-upload everything on your new grid that you made for SL. But you'll keep thinking about the thousands of lindens' worth of damn good stuff still sitting in your stagnant inventory in SL.

Everything about virtual worlds is transient and transferable. Except inventory.

Inventory is the hook that keeps us fish flopping on LL's line. Charging for inventory might not cause them to lose enormous floods of people for that choice alone... but it would be like trimming the barb off of the hook. They would lose one of the primary factors keeping people in SL after they flail their arms and rant and threaten to leave for all the other reasons that crop up.

The more inventory people have, the more firmly rooted in SL they are.

It would be unwise for Linden Lab to do anything to inventory that would make it less desirable to accumulate for the same reason they would never intentionally make it easier to export.

[rjs]

@Samantha Atkins

You wrote:

"My objection to this proposal is that anyone competent in web-scale database can tell you that the inventory of SL users is not exactly Big Data."

I assure you that you are not at all correct. The images alone that Linden stores in SL would blow your mind in terms of how much space and resources it takes. Binary globs are no different than the image itself when uploaded to the database.

SL users inventory is part of the issue.

[AmyNevilly Resident]

What about content creators??????

I have to have tons of prims in my inventory because I am building things.

I'm not some ditz who has 1000s of skirts she will never wear but can't be bothered to delete.

This would really piss me off!!!

[rjs]

"What about content creators??????"

If an SL resident "purchases" an object from another resident, the images being used are not altered and no access to those images are provided to the one making the purchase. In other words, those images were not duplicated and the images you view on the prim were already within the database.

There is a difference between someone in SL who "purchases" someone elses data and pulls that data via UUID vs the content creator whom uploads the images and content to create with.

Anyone purchasing textures in SL have a "copy" of the binary. Which is where the real issues in having excess inventory resides.

Make no mistake about it, it's the content creators and their textures that warrant a cap on inventory more so than the user who purchases other peoples items and stores UUID's to those items.

Just a small local database I have with a mere 32K items is the equiv of 4-5Gigs of storage space. This is the user that need most targeted. But to be fair, everyone's inventory should be limited to a certain amount of items. After this, you will have to package those items, clean up your inventory and offload to simulator space or pay a bit more to have a better entitlement.

That's my perception of how this would work anyhow.

[kdm]

The inventory consists of links to the asset server. Hamlet! Should Facebook charge their users for befriending and liking stuff too?

[sparky]

Charging for inventory won't delay the inevitable. The real problem for LL is the rapid and massive shift away from the desktop. 3D graphics overheating killed my last laptop and it's the reason I no longer play. I don't want to buy a desktop just for Secondlife, nor pay the steep premium for a gaming laptop. After nearly a decade, affordable mobile hardware for the masses still hasn't caught up to the software. And SL on a 7 or 10 inch tablet wouldn't do it for me either. For now, I'll just find less demanding apps.

[Dartagan Shepherd]

Not sure where the logic comes from for finding ways for SL to come up with more revenue streams.

SL decline does NOT indicate lack of profit. LL had and STILL has plenty of profit, as they've often stated and as you can see by the money that they're blowing in developing new products and spending to acquire new products.

I realize that coming up with new revenue streams seems like an answer to providing an easy "cost of entry" barrier to equalize out of control product glut for merchants and to reign in what you can do for free. Coming up with some new cost is the easy answer.

On the other hand, between high costs and sinks which take already purchased Linden Dollars out of the economy, SL is already OVER monetized.

Taking more money out of user spending means less dollars for merchants, land barons and everyone else which only speeds up the process of decline as even more people leave due to lack of ability to break even or profit.

Gaining more revenue for SL isn't going to stop the decline.

LL already knows this which is why they're investing their ALREADY SUBSTANTIAL profit into other products.

If they wanted something to play with to offer as deals, they could redo their entire monetization schemes (exchange, sinks, etc) and put them as fees that could be then offered as packages. (For X amount you get X free texture and mesh uploads, X free amount of advertising, etc.)

However, they don't due this because their over monetization is ALREADY lucrative enough to invest in other ventures and still make a profit.

In short, more revenue has absolutely nothing to do with saving SL. It only serves to line LL's pockets more during a decline that's happening with or without the extra revenue.

The shortfalls of the product itself, perceived value and the general market are what affects SL. Not the revenue streams.

[Amara]

This remains a stupid idea. Coming from a six year resident who builds, is a premium member, a content creator with a 40K inventory, and owns land, I refuse to see the plus side to this. Charging anyone for what they have in their inventory, big or small, will not solve LL's money problem. I'm not convinced they have one really. LL's completely forgotten (or maybe they don't care anymore) what and why people still bother with SL. Why some of us still spend money here and see value in all that data.

LL will NEVER charge a $1 fee for anything, Hamlet. No. Way. As someone else mentioned, they are likely to simply raise the premium fee and the rants and screams will continue. If you are an avid user of SL (i.e. builder, scripter, someone who sells anything, or owns land) a premium account will likely be great for you. But for most, it's got no purpose when you can lease land without being a premium member. There's plenty of high quality freebies out there put out by content creators to bring people to their shops. Sure not everyone is going to shop but the ones that do may keep doing so. Add a fee to that, and people will change their habits. They will become very critical about what they want to keep in their inventory. It will no longer be about entertainment; it will be strategy. And a lot of folks depending on someone who buys things are going to be in hot water.

I have owned four full regions in my time and all are gone now because of the high tier. I had four originally because the renters I got over time who leased the land from me fully covered the cost. I did not pull funds from my wallet to pay tier for a long time...then the price went up. And up again. And the renters, fed up with SL for one reason or another, started to leave, settled for a Linden home, or decided they didn't want an SL home that much. The renters fund those high tier paying residents, who then fund LL. Go ahead and target the people that buy anything in SL. See how many land owners will be willing to shell out thousands on their own when folks start limiting themselves and think heavily on whether they really want to add a house, shop, or that new spring line of clothing to their inventory.

I now have a marketplace only store. Any ads, upload costs, shopping, and such are supported strictly by the profit I make from people buying my items. That's where the funds for my "fun budget" come from. Linden Dollars that go right back into SL. As long as profits come in, I will make new things to keep people coming because I want them to stay and enjoy what I made. If I have a slow month, I'm not going to raise the cost of my items so I break even; I'm going to look at what is being purchased still and market on that.

LL stopped doing this with SL a while ago. Nothing new. Nothing special. Just adjustments and sparkle to act like something it is not while gradually alienating the ones that tolerated the changes. The decline isn't from lack of funds; it's from more and more people realizing LL doesn't care anymore so why should they? Punishing, and yes, this is exactly that no matter how you try to sugarcoat/rationalize it, the ones that still care will not lessen the decline in the least.

[Iggy]

I've been doing a bit of half-serious research on Steve Jobs' business strategy. I suspect someone at LL read this interview with Jobs, not long before he returned to Apple as CEO and began to pull the wool over the eyes of we Mac OS fanatics:

"If I were running Apple, I would milk the Macintosh for all it's worth -- and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago."
-- Fortune, Feb. 19, 1996

You think LL knows that the next big thing is most certainly not immersive 3D virtual worlds? So they milk the cash-cow for all it's worth until it dies and get to work on the next big thing?

You think? If not, you wish so hard you are scaring me.

[Ciaran Laval]

@Iggy absolutely nobody knows what the next big things is, have you ever read Robert x Cringely's Accidental Empires? Superb book and the IT industry remains a domain of Accidental Empires.

[Ilsa Hesse]

* 9 dollars a month, for which I get 450 a week in lindens, all of which goes back in to SL
* 5,000 lindens in pay for work, all of which goes back in to SL
* over a sim's worth of land, rented for me for work, living, etc,
* content creation, mostly given to others for free, or a nominal price
* several thousand usd spent on land at various points for pet projects and living

grand total probably 100-150 a month spent by me/for me in SL

please explain how and why LL needs to charge me a dollar for my inventory? do I really take up 100 dollars of server time/effort? do I take that much time in (laughable) customer service?

When I played Everquest (thank you by the way, my SL addiction finally kicked my EQ addiction) there was _always_ a GM online when needed, if there was a bug, they fixed it... when an inventory item did not owrk or was gone, they replaced it...
when was the last time a Linden made their presence known in SL? when they do come on they hide...

Make a game that I respect, as well as am addicted to, and I will pay more for it, otherwise more and more resentment is built up, before I just go look for the replacement of my EQ addiction again... (I dont pay for an EQ account anymore... so when I figure out something else, why would I pay for SL?)

[2013]

I see why the person in the picture has over 100k, delete that crap from 2009, 2010, even some of the horrible stuff from 2011.

[Iggy]

@Cirian, yes, read and enjoyed it, as well as Rose's West of Eden and Wu's magnificent The Master Switch. Jobs knew, and David Sarnoff knew for radio and TV. Good ad men know it. Bill Gates knew when he licensed his OS and did not sell it to IBM.

I'm more convinced than ever that some individuals in IT and entertainment know what consumers want before we even know we want it.

Perhaps with the right approach, mass-market consumers might even want 3D immersive virtual worlds. If so, the Linden approach has certainly been the wrong one. Right now, they are milking the cow until it dies, and with all the purchases and roll-outs of mobile apps, flailing around for a new hit.

As for Hamlet's suggestion, I don't see much in it except monetizing some of SL's free accounts. It won't bring in the new blood needed to sustain what is gradually becoming unsustainable.

[Ezra]

As always, SL's growth problem isn't that new users aren't arriving, it's that they doesn't stick around.

Second Life's problem isn't that some Steve Jobs-esque mind isn't at the helm predicting what it needs to be in the future, it's that when someone installs Second Life, 9.9 times out of 10 they probably think they've installed a virus or otherwise something running so badly they don't want it on their computer.

It isn't glorious to wonder and talk about over and over, but just because we're numb to all of Second Life's technical and usability issues doesn't mean they aren't still at the top of the pile of reasons why SL's user growth is flat.

[Adromaw]

"So while it's quite possible charging for inventory would cause some user backlash, it's unlikely these users would simply leave SL." - OP

Careful when supposing what users might and might not do. CCP have ugly mass subscription cancellations in their history with Eve Online you might want to keep in the back of your mind when ever you draft proposals that impact people or change the attractiveness to learn and engage SL because of the potential cascading effect from changing behaviours and habits.

There are many different uses and approaches to SL and it's land over the years—assuming there is only one or that it should be boiled down to it can do just as much harm. You're going to have to be absolutely sure that the wished for behaviour doesn't impede use and growth and doesn't dissuade transition.

True LL have weathered a lot of drastic changes over time fairly well, but who would want to boldly take that for granted?

If you're going to help me understand where you're really going with this Ham, make an article that follows precisely where the USD cash flow goes when I buy lindens from the site. Who gets it and what cuts go where and exactly how important or unimportant is that currency exchange to SL?

If you're going to persist in telling people how they should and shouldn't consume and use SL at what cost—you may as well start from the beginning and map out the whole thing. Doing that might help you spot things left unnoticed that may need to be addressed for your persistent vision.

Convince me the idea harms nothing.

[Wolf Baginski]

1 USD per month (or 250 L$) for non-premium residents over a certain inventory size would be manageable.

I think making it a L$ payment is the only way to do it. The banking charges on small real-money tranactions would be too high a cost.

But if we have to wait for the Lindens to program a better inventory UI, I'm not sure it will ever happen.

And at 12 bytes per item, most of my inventory is pointers, not the originals, my inventory is under 400 kbytes. 25 million total signups, half a megabyte each on average, that's under 14 terabytes, which is not many current hard drives.

[elizabeth (16)]

@wolf

on your numbers that about average 3 million kbps coming out the inventory servers just to get them down to the viewers

is not the storage that the real problem. like costly in spacetime. is the tranmission

[Max T]

SL doesn't have a profitability issue. SL has a growth issue.

I fail to see how extra charges for users to engage with content fixes this growth issue.

This whole idea of inventory charges is entirely nonsensical.

[Echo Kinsella]

I think this is just stupid. Big inventories? If you have been in game for over 8 years and had any businesses what do you expect? Why should we delete things we paid for? I have been a premium member that entire time as well as a land owner so I think I've earned the right to my 150k inventory.

[rjs]

Another thought..

If Linden's grid software is anything like os/aurora, the asset databases are not stored along with inventory items/folders.

There are separate tables for inventory, folders, and assets. When deleting an inventory item, it_does_not remove the asset from the asset tables.

The problem isn't just the number of inventory items. But rather how much of that inventory data is your uploads or purchases that take up the asset space.

If most of what you have in inventory including textures and your own work were uploaded by you, and you have a large amount of inventory, then you are indeed using up a significant amount of asset storage space. This is where the problems are.

Limiting is good, but even if you were to delete your inventory it wouldn't necessarily delete all the assets from the assets tables.

Again, this is only true if Linden's server software works as os/aurora does.

The answer IMO is to limit the amount of storage from the get go and charge more for uploads.

[slutrix]

Once again, Hamlet Au thinks that the problem is *active users* (i.e the ones who shop, buy L$, rent land) etc and targets *them*. No mention whatsoever of LL's historic lack of basic housekeeping and pruning of inactive accounts. Inactive accounts do have inventories, too. And some have large inventories.

LL could very easily enforce an enhanced version of the policy companies like Gameforge (known for its browser-based strategy game Ikariam) or InnoGames (developers of Grepolis): stay inactive (whether you're "premium" or "free") for a period of time and you'll be asked to log in again or your account will be deleted. If you don't, your account and your inventory will go "poof". Plain and simple as that, and you can't say you weren't notified or warned.

And I also propose something else: Do you want to stay away from SL, but you still don't want to lose the investment in inventory, L$ etc that you made over the time you've spent there? Then pay LL to keep your inventory while you're away. And I propose a pricing scheme for this:
$5 for one month
$10 for three months
$15 for six months
$20 for a year

Also, end the "five free alts" policy. It only helps griefers. Reduce the number of free alts to ONE per account, regardless of whether they're free or not. From that point on, charge $50 (yes, USD) per extra alt. And, when someone violates the ToS with his/her alt, LL must block both accounts, as they belong to the same physical person.

Oh, and LL doesn't subsidize *anything*. Enough with the Randian terminologies, which only show a heavily prejudiced individual who views the world through ideological blinders (mind you, Rand was eager to get the medicare she railed against when she "caused herself cancer" by chain-smoking, to use her own words, so she was a hypocrite and, therefore, no one has reasons to take her and her psychopath-loving ideology seriously).

As for Mr. Au's proposals, at best they'll do nothing. At worst, they'll once again fan the flames of the "premium" vs "free" account holders war and cause a self-regenerating shrinking of the virtual economy, as consumers will start abandoning SL (without deleting their accounts, of course - so their inventories will still be there, keeping LL's significant maintenance costs in place) and content creators, in turn, will abandon it too, as their income will be diminished. And then, seeing reduced diversity of products and services, other users will start leaving etc etc.

Mr. Au's proposals are pure business suicide for LL. I definitely wouldn't want him to work for me. But I'd be glad to pay him to work for my competitors.

[Zarkinfrood Miami]

Even as a content creator, I manage to keep my working inventory to somewhere between 6-10k. Textures,sounds, animations, and sculpts? Stored in a SkidzPartz TMat. Scripts? Created and edited offline using LSLEditor. Old builds get boxed up, bought inventory stays boxed unless I am using/wearing it frequently.

I have to echo Max T's sentiment here - LL doesn't have a profitability problem - it has a growth problem. Linden Labs has made a choice in who they perceive as their customers - the land barons. Yes, they could change their customer base to the hundreds of thousands of people coming in-world...or they can continue to make a mint off of a few people and leave the headache of real-estate to the middle-men.

I realize that without the people coming in the lab would lose all the money of the land barons, but as it is they have 2 jobs to keep their money flowing at a steady rate:

1. Keep their land barons happy.
2. Make sure the software and databases function.

As long as they can do that and continue to ignore everyone else, why WOULD they care to change their pricing model.

Hamlet, I love reading your stuff, but sometimes I wonder if you write posts just to watch the flame wars in the comments :)

[Hitomi Tiponi]

For once a post that I agree with Hamlet. I knew that eventually you would have a good idea ;)

[Masami Kuramoto]

As a fan of OpenSim, I absolutely love this idea. Anything that makes Second Life less worthwhile to freeloaders is welcome in my book. A tax on inventory would not only keep free accounts from collecting freebies; it would also limit their ability to make friends on Linden Lab's grid, since each friends list entry is also an inventory item.

Unfortunately the Lindens are not stupid enough to implement something like this. Believe it or not, Linden Lab loves us freeloaders. They don't want us to leave, because the grid would look empty without us. This is why every proposal to block/restrict/penalize freeloaders has been ignored by the Lab.

Mark my words: You can discuss these things until you're blue in the face, the Lab won't listen to you. I wish they did, because the only thing that keeps OpenSim from reaching critical mass is its lack of freeloaders.

[Penny Patton]

"the only thing that keeps OpenSim from reaching critical mass is its lack of freeloaders"

The biggest thing preventing OpenSim from "reaching critical mass" is that it's still basically SL, including pretty much all of SL's failings.

OpenSim devs and grid operators need to realize that and take steps that would make OpenSim a decisively better experience than what SL provides.

That needs to happen before OS can ever hope to achieve any sort of "critical mass"

[Arcadia Codesmith]

I don't think that a recurring charge would fly. You might be able to cap inventory and then charge one-time unlock fees to open additional slots. Many of the "free-to-play" virtual game worlds have a cash charge for additional inventory and bank slots, but none of them charge a monthly rental. That's just begging your casual user base to go away.

I have to agree that "subsidization" is a red herring. Most of the inventories of most of the residents consist of pointers to resources that are shared amongst hundreds or thousands of other users. Those resources are paid for upon upload.

If the problem you're trying to solve is database bloat rather than revenue generation, there are a lot of ways to approach that with minimal impact on residents. Here's one: ditch notecards and put in a state-of-the-art email system. And perhaps you can monetize that by charging a modest fee for mass mailings and other advertising.

[Adeon Writer]

Lots of comments here... I'll just say I think this blog post is a fine idea.

But there's a big detail that needs working out:

What is the limit, and in what units? Item count? Bytes? People can Rez a box and put half their inventory into it, then take the box. Thousands of items converted into one.

[Henri Beauchamp]

I won't be adverse to having a fee paid by abusers, but the fee should not impact people with reasonable inventories (mine is less than 16000 items big, after over 6 years of SLing and despite the fact that, as a creator, I keep many versions of the various items I created as archives).

I think any inventory with less than 32768 (that's a power of two, thus the weird looking number :-P) items should be kept "free".

As for the alts, while I do have a couple, I only use them to test my scripted items (as a creator, you need to test your scripts on avatars that don't have full permission on your creations), but found it impractical to use them for the very purpose I'm using SL for: role-playing. Why ? Because I can't share my inventories between all my alts, meaning that I cannot share no-transfer items between them, for example.
If an inventory fee is to be implemented, then inventory sharing between alts should be allowed (it would then allow you to reduce the total number of items in your alts' inventories and, for LL, to count your alts' inventory easily to compute the fee).

There is however a problem with inventory items counting: objects in your inventory can (and usually do) themselves contain other items, which can take even more room on LL's servers than the inventory object itself !... I'm not sure it would be possible to charge for these, and certainly not in the current state of affairs where you don't know the actual number of items you own in total (since you only see the "root" items). There's also the number of prims for each object you own, and the textures that are used on each face... all of this counts as storage space on LL's servers, but you never know how much yourself !

[Masami Kuramoto]

Penny wrote:

The biggest thing preventing OpenSim from "reaching critical mass" is that it's still basically SL, including pretty much all of SL's failings.

OpenSim devs and grid operators need to realize that and take steps that would make OpenSim a decisively better experience than what SL provides.

Never in the history of computing has quality been a factor in a platform's success. The only thing that truly matters is content. The most apps, the most games, the most songs/movies, the most marketplace items, the most people. Content is king, and people are content too. As long as Linden Lab does not kick the freeloaders out, there will be no exodus. Not to OpenSim, not to Cloud Party, not to RealXtend, not to what have you. Everyone is waiting for everyone else to make the first move.

SL is "good enough." If you build something superior, the first thing people will do is complain about its user interface.

[Metacam Oh]

I find it funny the notion that people that supposedly spend hundreds of dollars on inventory would walk over a 1 dollar charge (if you are not a premium account) If you spend all this time and money in SL and are prepared to "take your ball and go home" over a 1 dollar fee increase, then SL really wasn't that important to you to begin with.

[ZZ Bottom]

Sorry Hamlet and a few others but you are never in world time enough to know that the simple fact that is creating a outift on my outifts folder (links to the folders where are the original 1) increases the amount of objects in the inventory!
So to be straight!
Forget !

[ZZ Bottom]

And to add, i find at least disturbing that so many are speaking about charging when less and less are spendind!

[Archangel Mortenwold]

Hamlet, this is a recipe for disaster and even you have to acknowledge that. Charging people for inventory is a surefire way to ensure that even people who've stuck with SL for years will end up leaving. All those monthly charges, no matter how small, WILL add up, and since Linden Lab refuses to lower tier, it's just adding more cost to something that people can no longer afford. No business survives in the long term by overcharging customers, especially when the economy is in a continuing downward spiral from which it is unlikely to ever recover so long as right-wing economic policies remain dominant. Linden Lab is going to learn this the hard way. Let's all hope they don't take you up on this ridiculous suggestion.

[Hamlet Au]

"Hamlet, haven't you said you have a tiny inventory in SL?"

No, I said the exact opposite:

http://nwn.blogs.com/nwn/2010/01/inventory-bankruptcy.html

[Desmond Shang]

Just a quick comment on something Archangel said here, to quote:

>>"No business survives in the long term by overcharging customers, especially when the economy is in a continuing downward spiral from which it is unlikely to ever recover so long as right-wing economic policies remain dominant."

I understand the spirit of what you are saying here, but there are some big exceptions; in fact the very business of being ridiculously expensive can be quite good in a recession. I could list a number of high end luxury brands in fashion, automotive, tech and so forth to make the point but I think it's not necessary.

It's the old Pareto principle: "80% of your sales come from 20% of your customers" ~ this is not uncommon, in fact it's a normal condition for most businesses. And businesses do change. Consider a company like Honda, which started out making engine parts and then motors for bicycles. Eventually they made tiny cars, then split off an entire luxury brand (Acura).

The point of all that is this: companies do evolve and change. I've got a 1968 Honda Super Cub, which is a fine little motorcycle; with a tailwind it can do about 30mph (when it's running). Within the parameters of its purpose, anyone would be hard pressed to engineer something better; it is *fantastic* local transportation for most of the world. The trick for Honda, then arguably the most successful small motorcycle manufacturer on the planet, was to look far, far over the horizon at what they could do, rather than further perfecting the Super Cub or staying within the budgets of people who could afford motorcycles.

I wouldn't be surprised to see SL's user demographics change over time; in fact I am pretty sure most of the people still here are on average older and wealthier than those who left. Should SL aim to become a sort of luxury brand? Personally I'd rather not see that happen as I don't want a lot of good friends priced even further out of SL, but from a business perspective, it might make sense for SL's survival. Might. It would depend a lot on how it was done.

[CronoCloud Creeggan]

@Henri:

I am being amused and amazed by the inventory sizes that are considered large in this discussion. Don't you people ever SHOP? I actually feel shame as a fashionista because of my small inventor of around 74000 items. I should have 200000 by now. Yes, Really, 200000, I just haven't been shopping enough.

@Masami:

I totally agree.

I've said dozens of times to opensim proponents, there will be no exodus because Opensim is SL....without the people and without the "stuff". Sure the sandboxer crowd loves it, they can have a cheap vanity sandbox of their own and script to their hearts content...but they are a tiny niche in SL. Everyone else will be where the people are.

Cheap land isn't enough, you have to offer more and better, and since OpenSim IS SL under the hood it has the same limitations. Sure OpenSim has that cheap land...but the only reason they have it is because they don't have users to support. A guy can host Opensim regions on a rack in his basement...but what happens when users want 24/7 uptime and support, a web marketplace, a currency, etc etc. That would up support costs and then the OpenSim owner would have to charge more, just like LL does.

@Metacam

It isn't that it's a "small charge" that's the issue, it's the fact that it's "taking away" something Basic accounts have always had.

It would be different had Basic Accounts always had limits. In fact I don't think LL ever even implemented the login queue thing they had mentioned they were going to do, in which Premiums would receive priority login.

@Des

I wouldn't say wealthier per se...but perhaps more willing to spend money in a virtual world than most. The hardcore residents in the steamlands DO seem to skew a touch older, other places a bit less so. And no, I haven't been actively collecting demographic or economic information on the sly, though I do have hunches based on what I've seen, but you know as much about that as I do.

[Penny Patton]

@Masami Kuramoto

Even if what you said was true (It's not, not entirely at least and not in the narrow way you interpret it.), blindly mimicking SL's failings, which limit content creation, is no way to gain the upper hand in content.

Why should I, as a content creator, create content for OS when it is trying to be nothing more than SL with fewer people? I've already got SL!

Meanwhile I'm chomping at the bit for a virtual world that allows me to create more engaging content. The ability to create content with a broader appeal that would draw in both SL users and people who, due to SL's failings, turned their noses up at SecondLife.

If OpenSim developers can't see that, they have more in common with LL than they realize.