Tuesday, 24 November 2009

Ex Street

This blog, when I first conceived the idea, was supposed to chronicle the exciting things I discovered around the grid; instead I find myself once again Linden-bashing. Which is just as entertaining.

Colossus Linden announced last week that he and the rest of the team responsible for managing XStreetSL (from this point on to be referred to as XSt) had devised a brilliant and watertight new pricing system for listings on the virtual e-commerce site.

Until now (well, actually for another 30-60 days) XSt has been a free listings service. Anyone who had created any content that could be used within the Second life Grid – be that textures, scripts, prim builds, sculpties, hair, clothing, even Island files – could list these creations for free on a giant, searchable online marketplace. It started out as a private enterprise - (called SL Exchange, or SLX) but last year Linden Lab threw a big fat dirty cheque down in front of the creators, who in turn eagerly handed over the keys to the office to the Lindens.

The idea was that you could list your stuff to save residents the time of trying to figure out how to use the easily manipulated Search facility within the viewer, teleporting all over the grid and finally trawling through vendors trying to find exactly what it was you were after. And it worked brilliantly. I have purchased many things from XSt over the years, from vendors who I may never have found in-world. Because the listing was free, many vendors actually relied on XSt to manage an income, being unable to afford shop rentals or find a suitable location that would guarantee them optimum footfall. You paid a small percentage fee in commission, but I never kidded myself that ‘free’ meant 100% free. Someone somewhere would have to pay to maintain the site, maintain hosting, etc. And if those enterprising people made $1L profit (after all of those costs) out of each sale I made of a $50L, so what, I thought, well done to them.

But then The Lindens got hold of it (primarily so that they could have the revenue, rumoured to be around $1million USD). It didn’t matter that they were already a multi-million dollar company, they were still going to charge commission, to a maximum of 5% for those nice costly items. They set about changing things. Just small things at first; they tried to make it look like they were doing things to help merchants and customers alike by integrating the Marketplace within the main SL website. They’d send out e-flyers (if you were lucky, just once. Unlucky folk would get two or three of the same promotion mailed to their Inbox). We’re making it better, they claimed!

But there was a problem; some pesky folk were listing items for free, but charging $0L for them. Some folk were throwing out low-free priced marketing tools. Some folk were giving away stuff because they were kind. Obviously, trying to take a percentage of nothing meant that the Lab made, er…nothing from each of these sales; yet the customer would still walk away with something useful in their pockets.

Some merchants objected to this; if someone else gave away for $0L that was similar to something that they’d made and were selling $250L, they had obviously lost out on a sale. Not really true; for example I, as a customer, have spent a good deal of time before looking for a carefully-crafted and lovingly textured house build than some free slap-dash affair. Nonetheless, The Lindens took these objections on board and decided that because they shared a common concern (i.e. they weren't making enough money), that they’d try and do something to rectify this issue. So, they held a meeting. Well, actually, they decided to discuss it as part of their regular office hours meeting.

Office Hours are times when Lindens decide to log into the Grid. It’s only a couple of hours a week so undoubtedly they can tolerate sitting with their buttocks and teeth clenched for that amount of time, listening to the concerns of a carefully-considered cross section of residents. Only, they’re not; because usually the only people who attend office hour meetings are people with an agenda, a point that they (the Residents) feel the need to try and hammer home to the people (the Lindens) who actually have the power to change something. Heck, the tinies of Raglan Shire are guilty of doing it! For three weeks in a row when Group Chat was shot to hell after an ‘update’, they turned up en masse to protest the lack of action to resolve the problem. Happy days!

The XSt issues were considered so important that they were discussed across three separate Office Hour meetings (no fanfare given to any). Colossus Linden reported that thirty-five (yes, 35) residents attended the meetings to help round out the proposals. Except not 35 at each – thirty-five IN TOTAL. That’s about 0.0000035% of the total population of residents. A fair cross section? Not really, is it? And as there was little fanfare given to what actually is a very important issue for a great number of people, unless you were regularly checking to see what was happening in those meetings, many people would have just taken them for granted.

The plans (as they stand) now amount to LL charging anyone who lists a free item (of $0L price, guaranteed return of, er $0L) a staggering $99L per listing per month.

Anything over $1L will now cost the seller $10L per listing per month.

Oh, and you’ll still need to pay that commission. A minimum of $3L. So don’t even think about putting those freebies up to $1L – we’ll still be taking $3L of each one you sell, they’ve said.

So, if (like me) you have 41 items listed, it will now cost you $410L per month to list all of your items. You will need to make about a minimum of $450L per month to come out with any profit, after commission. And then instead of coming out with the $427L you used to, you’ll now walk away with a paltry $17L. I consider $450L in revenue a good month for me…

Paraphrasing, the Lindens’ reasons for these taxes are: it will help the marketplace easier to search through; the marketplace will be less cluttered; customers won’t be directed towards freebies and those who are trying to make some money will finally be able to make money.

Well, in some regards, they’ve succeeded already. Thousands of items have already disappeared from the marketplace, pulled from the listings by disgruntled merchants who have already anticipated that they absolutely cannot afford to cover the new costs. I myself have reduced my offer from 41 items to a mere 11, and have made a point in my listings’ descriptions to tell anyone looking why there isn’t as much there as a week ago, throwing an SLURL in there to direct people to my in-world offer for good measure. I’ll probably see how well I sell over the next 30-60 days and see if I can make enough to cover my first month in a listings fee culture. Then I’ll pull the rest down.

There are so many better ways that the problems with XSt (which have only intensified, in my opinion, since the Lab acquired it) could have been resolved. Arrehn Oberlander has pointed out just a few in this post, which seem perfectly logical and easily achievable. The assessment of the reaction of the Lindens is also spot-on; they’ve become defensive and have blamed the merchants posting all those freebies and not properly managing their inventories for allowing XSt to become the mess it is. Um, what? I used to be a manager for a popular chain of coffee shops; I didn’t demand that customers pick up their crumbs or drink every last drop of their beverage before they left. I let them in, they paid me for a service already. That’s it, job done. Whatever they leave behind becomes my problem, so I deal with it. If that means throwing it out, so be it. Free items - heck, anything $10L or less - could easily have their own listings section, seperate from the higher priced stuff.

I felt myself fortunate that Colossus Linden took the time to reply to an IM I sent to him in-world; I expressed a huge concern that merchants who make niche items for a niche market (I make musical instruments for tinies: small market within a small market) would be driven away from XSt, and possibly be driven out of business altogether. Unfortunately, his response amounted to “we’re not trying to drive out nice merchants” and an even less useful “why not put your prices up?” Well, it might not have been your intention, but without thinking about it, that's precisely what is happening. That doesn't help me; I can't guarantee I'll sell something at $250/300/400L, so what chance is there that it'll sell at twice that price? How does that help my customers either? I'm not stupid, I price my items in line with what I think they're worth. If I charge a customer over-the-odds, what benefit does that have for them? Nothing: we both lose.

When the whole Homestead sim fiasco was announced a couple of years ago, it also resulted in a massive resident backlash, that the Lindens seem to be genuinely shocked about and reacted to. Back then, they compromised. They admitted they’d made an error by not garnering feedback from residents beforehand and revised their announced policies. However, this time around, there seems to be no retractment, no amendment and no concern towards residents. The only concern seems to be making enough revenue, propping up the loss felt from downgrading Premium subscribers so that the Lab can look forward to a healthy end-of-year bonus. It's another turn for the worse for resident faith in the Lindens. Personally, and I know this also goes for several others within the Raglan community, I couldn't trust any more than two or three now.

Happy Thanksgiving M and the rest of the Linden Mafia (which does not necessarily include all Lindens); thanks for nothing.