Crap Mariner's blog addressed an analogy in my last blog, which I have read thoughtfully, and I have to say, I have to agree with him. Second Life is not like TODAY's web hosting services.
I think Second Life is more like the web hosting services from which they had evolved: frontier family set-ups using crap (sorry--TM) machines in someone's garage. Wise entreprenuers hooked up with these little hardware holders, repackaging and marketing their hosting as affiliates and reselling the hosting to individual users, providing at times, the go-between for the customers and the hardware/software guys.
Now that was in the '90s, when I knew what web hosting meant because someone in my household worked for one of these start-ups. They literally plugged into a main line in downtown Chicago with a bunch of crappy little PCs and hosted people's websites. They were glad to have those middle men for a while because the middle men kept the customers off their backs so they could keep the machines going. They were ostensibly outsourcing their customer service. And did it cost $1000 to set up a web site? No, but it cost considerably more than the nearly free cost that is quoted nowadays, as set up was not automated nor was registering a domain cheap at the time.
That worked great until they automated their web hosting sign up, troubleshooting, etc., and also as technology improved through the data stream. And the market was heating up. Technology was making it so one big ol machine from Cisco could do what their 200 PCs could do and firms were professionalizing their web hosting companies so that they WERE doing "managed application hosting," as Crap names it. They couldn't compete--their cost to run was too high. One big guy could come in and eat them up, and that is what happened. My family member's company closed its doors, not in bankruptcy, but with their customers sold off to the bigger tuna. Could we do anything about it? Nah. We went on.
Compare my knowledge of web hosting from the 90s to today's Second Life. What I describe is what Linden Labs is doing with allowing "land ownership." They allowed land owners to be their middle men for their crappy little machines, while they tried to keep it all together. (We ALL know they are having a hard time keeping it all together right now, but that warrants someone's else blog.) A lot of the decrease in their start-up cost (I refuse to call it "land price") it is due to the same forces experienced by web hosts in the 90s: technology is improving and more companies are entering the market. Something's gotta give, and in this case, it's the cost to set up a website--oops, I mean, a sim.
While I concede to my friend Crap that my analogy was outdated, I won't back off my argument that "land ownership" in Second Life is nothing but a sales tactic by Linden Labs that worked. They got you to be their middlemen by calling you "land owners." And now they are responding to real life market forces that are saying "Your membership is plateauing, you have some 400+ machines sitting around unused (hello, Gaeta!), and you better do something quick to make some bucks because someone's gonna be calling you on that loan soon enough (*cough* Mr. Kapor)." Linden Labs had to risk devaluing current land by flooding the market with new land and pricing it more cheaply to take care of business.
I will reiterate that basing your business model on the arbitrary pricing whims of a private enterprise is risky business. It's called "speculation" for a reason. If you got stuck with land that you paid more for, well, whatcha gonna do? It's a product. It's not "land." Real life land is limited; they put another 400 machines on the grid, and you bet the price should go down. Supply and demand, baby.
And if Linden is not giving you what you need as a provider, go out and find the one that will. Cuz they are out there somewhere. Linden's feeling it--aren't you?
Thanks, Crap, for addressing my blog thoughtfully. I hear what you are saying.
Saturday, April 26, 2008
Tuesday, April 22, 2008
"Land" ownership
The strangest thing I encountered when I first entered Second Life was the concept of "land" ownership. A "sim," ostensibly a physical computer serving as a server in a network of other computers, included the opportunity for a wee avatar to have 65,536 sq. m. of horizonal space, which included the privilege to drop about 15000 prims on to that space.
Well, the concept of place didn't phase me in the least. I had been on a MOO. We had networked our rooms and homes through a series of doorways leading "n," "e," "s," or "w." The space, in and of itself, constituted one object. The consideration of trading quota for services rendered or currency was not a consideration, though I am sure some engaged in the former. Therefore, when I entered SL, the idea of paying for land did not seem absurd. The idea of paying someone who was not the holder of the server, however, did.
What was the deal with the "land barons"? Were they actual land owners, with all the worries, costs, considerations, mortgages, taxes, and maintenance (or lack thereof) that is involved in that?
Turns out the land barons do have a lot of duties. They argue on behalf of their residents with Linden Labs over their sims, they parcel the land, sell it, improve it, and generally police it. But what they are maintaining is strictly a function of the features provided to them by the program. They are middle men (or women, if that applies).
Lately the land owners have been up in arms about the new sim pricing. As we all know, the cost to get a new sim went down from $1675 to $1000. The cost for tier has increased for new mainland from $195 to $295, equivalent with the cost of tier for island sims. What this has done, according to sim owners, is lowered the value of land they currently owned by 40%. A huge hullabaloo has arisen over this as estate owners look at the multiple sims they have purchased, added up the extra $675 they spent per each, and tallied the "loss" they think they have incurred because they will now not be able to push this set-up fee, in the form of "land sales," off on the next guy.
We need to remember in RL terms that Linden Labs is a company with approximately 250 employees, on track for very fast growth and trying to wrangle a relatively new paradigm in virtual worlds. They are physically in an office full of people on computers linked up to colocations full of servers with all the same crap we all have our offices: guys like Dwight, people with toys on their desks, hushed conversations in the lunchroom, higher co-pays on their health insurance, some weirdo who silently steals other people's lunches. Linden Labs is a company, a private enterprise, with bills, employees, overhead and all the rest that Real World companies have to put up with. Well, heck, they are--us!
If we remember they are a private enterprise, we can see this for what it is. What Linden Lab's move *really* has done has allowed them to lower pricing for entry-level sim ownership, and it's potentially providing more income for Linden Labs through increased tier on mainland parcels (which, for some reason unbeknownst to me, are very popular for settling).
Back to this "land" thing. It's kind of a misnomer to call it land. What "land" owners have "purchased" is actually the set up of a server with their tier payment going towards "maintenance" (like the electricity to run the server, the health insurance with the increased co-pay, Philip Rosedale's hair gel). It's not a lot different than someone renting space on a server for a web page. In fact, it's nearly identical.
If you think about it, all Linden Labs really is is a glorified web hosting company. They have wrapped it in this magical package of Love Machine and kumbaya, forced us to use their browser, branded their name legally and literally. They are not "God" (God wouldn't have opened up Gaeta right when he lowered prices on sims). They are not the police state, as some would have us believe. They are a private enterprise.
This is the thing, my fellow residents of Second Life: we are not residents (as Robin Linden's clever name so makes us believe); we are consumers.
If my web hosting company announced that they were lowering my set-up fees and raising my maintenance fees, I would think about this two ways: first, I would be bummed that I paid an increased set-up fee on my other web sites and second, I would think darn hard about whether I wanted to continue with that company and would look to either move or get out of it altogether. Complaining that Linden Labs has not treated you well as a land owner by not announcing a price decrease with enough advanced notice, which has lowered your land "value" as a "resident" is like me whining to Volkswagen that they have not given me enough Fahrvergnugen (which they haven't, but that's another story). Put up or leave!
So land owners, think hard. Please stop complaining at public meetings and deluging the Lindens with requests to change their policy. It ain't gonna happen. Act like responsible business people. Adapt to the change, come up with a new strategy, pull in your belts. And consider: maybe you *would* be better off There.
Well, the concept of place didn't phase me in the least. I had been on a MOO. We had networked our rooms and homes through a series of doorways leading "n," "e," "s," or "w." The space, in and of itself, constituted one object. The consideration of trading quota for services rendered or currency was not a consideration, though I am sure some engaged in the former. Therefore, when I entered SL, the idea of paying for land did not seem absurd. The idea of paying someone who was not the holder of the server, however, did.
What was the deal with the "land barons"? Were they actual land owners, with all the worries, costs, considerations, mortgages, taxes, and maintenance (or lack thereof) that is involved in that?
Turns out the land barons do have a lot of duties. They argue on behalf of their residents with Linden Labs over their sims, they parcel the land, sell it, improve it, and generally police it. But what they are maintaining is strictly a function of the features provided to them by the program. They are middle men (or women, if that applies).
Lately the land owners have been up in arms about the new sim pricing. As we all know, the cost to get a new sim went down from $1675 to $1000. The cost for tier has increased for new mainland from $195 to $295, equivalent with the cost of tier for island sims. What this has done, according to sim owners, is lowered the value of land they currently owned by 40%. A huge hullabaloo has arisen over this as estate owners look at the multiple sims they have purchased, added up the extra $675 they spent per each, and tallied the "loss" they think they have incurred because they will now not be able to push this set-up fee, in the form of "land sales," off on the next guy.
We need to remember in RL terms that Linden Labs is a company with approximately 250 employees, on track for very fast growth and trying to wrangle a relatively new paradigm in virtual worlds. They are physically in an office full of people on computers linked up to colocations full of servers with all the same crap we all have our offices: guys like Dwight, people with toys on their desks, hushed conversations in the lunchroom, higher co-pays on their health insurance, some weirdo who silently steals other people's lunches. Linden Labs is a company, a private enterprise, with bills, employees, overhead and all the rest that Real World companies have to put up with. Well, heck, they are--us!
If we remember they are a private enterprise, we can see this for what it is. What Linden Lab's move *really* has done has allowed them to lower pricing for entry-level sim ownership, and it's potentially providing more income for Linden Labs through increased tier on mainland parcels (which, for some reason unbeknownst to me, are very popular for settling).
Back to this "land" thing. It's kind of a misnomer to call it land. What "land" owners have "purchased" is actually the set up of a server with their tier payment going towards "maintenance" (like the electricity to run the server, the health insurance with the increased co-pay, Philip Rosedale's hair gel). It's not a lot different than someone renting space on a server for a web page. In fact, it's nearly identical.
If you think about it, all Linden Labs really is is a glorified web hosting company. They have wrapped it in this magical package of Love Machine and kumbaya, forced us to use their browser, branded their name legally and literally. They are not "God" (God wouldn't have opened up Gaeta right when he lowered prices on sims). They are not the police state, as some would have us believe. They are a private enterprise.
This is the thing, my fellow residents of Second Life: we are not residents (as Robin Linden's clever name so makes us believe); we are consumers.
If my web hosting company announced that they were lowering my set-up fees and raising my maintenance fees, I would think about this two ways: first, I would be bummed that I paid an increased set-up fee on my other web sites and second, I would think darn hard about whether I wanted to continue with that company and would look to either move or get out of it altogether. Complaining that Linden Labs has not treated you well as a land owner by not announcing a price decrease with enough advanced notice, which has lowered your land "value" as a "resident" is like me whining to Volkswagen that they have not given me enough Fahrvergnugen (which they haven't, but that's another story). Put up or leave!
So land owners, think hard. Please stop complaining at public meetings and deluging the Lindens with requests to change their policy. It ain't gonna happen. Act like responsible business people. Adapt to the change, come up with a new strategy, pull in your belts. And consider: maybe you *would* be better off There.
Monday, April 21, 2008
The first entry
Who knows how long this will last, but I will put up my own blog, regardless of the constraints on my "not-first existence." (Did I skirt that one ok?)
Thank you, Mr. Almo Schumann, for the blog title. It fits my experience in SL entirely.
I am gearing up for my first substantial post.. it's about land prices and land owners. Allow me to put my neck out there......
Thank you, Mr. Almo Schumann, for the blog title. It fits my experience in SL entirely.
I am gearing up for my first substantial post.. it's about land prices and land owners. Allow me to put my neck out there......
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