Not Ready For Prime Time

The “oldsters” reading this will recall Belushi, Ackroyd, Radner and the rest of the original Saturday Night Live crew. I wish that I was talking about such a fun topic but instead think it’s time for yet another sobering analysis of the ever-evolving culture that is Second Life.

In fairness, this post has little to do with SL art and Oyster Bay directly – but the global implications of these issues DO have an impact on the entire Metaverse. That being said, let’s take a look after the fold at some of the major headlines (with followup commentary/analysis where appropriate) of the past couple weeks…

Economy/Demographics

Thoughts to consider: Second Life membership signups are slowing. People are spending less money. Companies are spending less money. Ridiculously few people are able to make a real world living in Second Life. Linden Lab is going to further devalue Second Life land through the creation of a new continent, even further crimping the ability of landlords – what Prokofy Neva accurately calls the “middle class occupation” for SL residents – to make money in SL to at least cover their expenses (forget PROFIT!). Major corporations are going public with their reticence about Second Life as an effective marketing vehicle. Note that SL promoter Millions Of Us are now advising clients on alternative virual worlds beyond Second Life.

You also need to look inside the numbers. Consider this: The median income for the SL Developer community is US$9,000/year. (As a point of comparison, the official 2007 United States poverty threshhold for a “family” of ONE is $10,210.) The number of earners making US$2,000 per month (US$24,000 annually is DOWN to 405, and the number earning US$5,000 per month (US$60,000 annually) is 132. That’s right, 132. 132 people against an in-world population of over 8,000,000. That’s .00165% of the SL population making a good living. And you thought that the real world was living in a new gilded age! And I can’t help but marvel at the comment in this blog entry:

Perhaps most interesting, median income (the value half way along the scale) is only US$9,000 – not enough to make a living in most of the counties well represented in SL (although a huge income for China amongst other countries).

Ah, if we all could aspire to attain the impressive living conditions provided for the masses by the Chinese economy! (Never mind that “Second Life has no Chinese port yet,”and China appears to be building its own virtual world – presumably to protect its citizens from the cultural and political influences of Western culture, as well as fair and equitable trade with its free trading partners around the globe.)

Let’s also jump back to the rough and tumble business environment of SL: 12 companies have been delisted from the SL-heavy World Stock Exchange at of today. Past experience and current evaluation of the WSE shows that companies listed on the WSE are raising L$1 million per IPO at minimum on average – meaning that at least L$12 million has been lost entirely through mismanagement by amateurish company operators or outright theft of company assets by “CEO’s”. It’s common knowledge to traders that the WSE is MAYBE a step or two better than playing the slots at any of the many SL casinos. Roughly L$1 million a day changes hands on the market, but there are no consumer protections at all for this activity, which operates outside the economic purview of Linden Lab. Perhaps that’s why trading volume has dropped precipitously over the last quarter. (Could also have something to do with the fact that a rival exchange has emerged, but I can’t believe that a new exchange with only 12 listed companies could have that type of effect on the more-established WSE, with its more than 50 traded companies.) After a harrowing personal experience with one now-delisted company, I’m getting out altogether.

[In a spirit of full disclosure, readers should know that I was once a “Board Member” of Hope Capital, the parent company of the WSE. I was never given the opportunity to vote on a single Hope Capital action, never was invited to sit in on an official Hope Capital board meeting, never saw minutes of a board meeting and never saw a financial report on Hope Capital while serving as a board member.]

Music

Thoughts to consider: The Second Life Community Convention, a major publicity venue for Second Life, stubbed its toe badly by booking acts for its convention and THEN attempting to force a waiver of creative rights upon the artists. The artists, understandably, cried foul. The Convention gets a (deserved?) black eye and loses some drawing power. (Neva offers much more on SLCC in this post – with many of the same conclusions about the music side of things but even more insight and perspective.)

Law (a/k/a the Stroker Serpentine saga)

Thoughts to consider: Even for the guys who ARE making money in SL (like Stroker – regardless of what you think about his niche, there’s no question that it’s lucrative), intellectual property is not safe. In a world where anonymous entities are allowed to create Second Life accounts and purvey all sorts of grief upon the grid, it’s next to impossible to police these matters. I mean, Stroker figured out that an account (maybe one actual person, maybe more than one) stole his property and is profiting on it. But he doesn’t know who to target when looking for redress! That’s a sobering thought for creative minds, both those in-world and those considering entering.

Now further consider the two-pronged message being sent out to the great unwashed via “Power Lunch” and the other media outlets: 1) SL is about sex, and 2) SL is the Wild West, with no safeguards for the rights of property owners – especially the all-important intellectual property. Nice message. (To “Power Lunch’s” credit, they really focussed on the legal issues of intellectual property in Second Life and minimized the sex element. But the sex was there….sigh.)

This issue hits home with artists much more closely than one would immediately think, as it hasn’t been too long ago that ArtWorld Market posted a blog entry, “The Artist-Gallery Contract and Intellectual Property Theft,” which covers many of the same legal concerns but doesn’t have the marquee value of a court case and commentary on CNBC. Still it’s a VERY real concern – one that you can read about how Oyster Bay has handled in the comments.

LET’S REVIEW: The Second Life culture and economy is clearly evolving and has come a long way since its inception. But it’s also clear that the culture and institutions of Second Life are nowhere near close to being caught up with the technical capacity of the grid (which, while still being uneven in its reliability, is getting much better – let’s give Linden Lab credit where due).

  • The real world businesses are realizing that their Second Life presences aren’t REALLY worth much more than a few press releases at present.
  • People in-world and in the real world are coming to the conclusion that protections for intellectual property in Second Life are fantastic as a principle but incredibly hard to enforce.
  • This “American Dream” notion of people becoming self-sufficient through the Second Life virtual world is currently a pipe dream, and the stats prove it. (I can’t speak for the other virtual worlds; I know nothing about them.)
  • Some SL community created constructs (perhaps including the SLCC and select publicly-traded SL businesses) are not operating in a professional manner – and sometimes are getting called on it.

As a creative world predicated on an economic base, these issues combined are cause for concern. This is on two levels:

  1. Real world corporations, the apparent economic lifeblood of Linden Lab, need to have confidence that their investments in Second Life are bearing fruit to continue their investment.
  2. The individual user, the cultural lifeblood of SL, needs to have confidence in their institutions. They need to trust that those who wield power in-world are doing so wisely. They also need to know that their small dollar investments will be protected. More importantly, the protection of intellectual property is needed to at least preserve the notion of integrity of their works and – for those who want to make a go of it in SL – the “American Dream.”

I firmly believe that residents of Second Life WANT to see SL succeed – if only to see something of their investment in time, energy and money. We’re here by choice. But isn’t it clear that Second Life as a culture and economy just isn’t ready for prime time? And what does that mean to the fantastic creative minds who are making virtual miracles happen in scripting, building and the arts?

I am concerned. Deeply concerned…for myself, my SL friends and the entire Metaverse. Let’s hope that this is just a bump in the evolutionary road and not an indication of a wider trend.

[15 JULY UPDATE: Here’s my nightmare commentary. I’m amazed that someone put it together so quickly. Unbelievable.]

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