Abundance and scarcity in Second Life

SL is an interesting laboratory because it is entirely based on artificial scarcity, i.e. making a business through designs that can be easily copied.

Jonathan Bailey has an interesting analysis of this, showing that SL administrators fail to enforce copyright, yet many designers are making a living despite the massive breaches.

Here are excerpts from his analysis:

1. A Protection-Free Environment

For all practical purposes, SL residents are forced to assume that they have no protection of their works and that they can and will be copied regularly. Worse still, there seems to be very little in the way of means for getting them removed after the infringement took place, especially if they are held in inventories.

This has put Second Life creators in a strange position. How do you sell works at a retail price when illegal copies are available for either free or pennies on the dollar? With so little in the way of traditional enforcement to deter people from just copying and running, creators need to find other ways to reach customers.

However, for the most part, they have been successful. Though copying is still rampant and some designers left the service due to these issues, most have stuck around and continue to sell goods, with at least some success.”

2. Lessons Learned

When looking at the relationship between content theft and Second life, the following elements leap out.

DRM Fails: It is as simple as this, DRM does not work. Protecting your content with DRM will only frustrate legitimate users and will not prevent copying. Reliance on DRM is the path to madness.

Community Enforcement Works: The SL community has banded together and protested content theft as well as in reporting and ostracizing people who copy without permission. Since SL is a social site, this has proved as effective, if not more so, than DMCA enforcement.

Most People Are Good: Despite the abundance of free or low-cost illegal goods, most people who buy products in SL still try to buy from legitimate stores. The bigger problem comes when the copycats are able to fool others into thinking that they are the authentic source.

New Works Trump Old Copies: The longer a work has been on the shelf, the more illegal copies of it that will be distributed. Thus, the best designers are constantly turning out new items to ensure that people come to them, not the shady dealers.

Name Recognition is Everything: If people know who you are and trust you, they will come to you. Well-known designers in SL are among the most copied, but continue to receive business because people know to go to them first. In short, advertising and word of mouth mitigate against plagiarism.”

There are more conclusions and links to further material at the original.

Here’s a question to readers who may know more: is the original success of Second Life due to its market approach, or to the relative openness and easyness of their metaverse? Is it volunteering or self-interest that created the success story?

4 Comments Abundance and scarcity in Second Life

  1. AvatarGwyneth Llewelyn

    IMHO, a bit of both of your first two questions. Second Life’s very open attitude to allowing almost any type of content, without supervision or pre-approval, has given the message to the content creators that they would be allowed to do pretty much anything without constraints — and, unlike other tools/platforms, Second Life has always included the required tools to create content (and program it!) inside the free and open source SL viewer, available for Windows, Mac, and Linux. So this openness definitely attracted content creators — many of which never dreamed to be a 3D content creator anyway (the tools for that are way too expensive and require a lot of experience and courses to be familiar with them — e.g. Maya, Blender, 3DS).

    The market approach is naturally vital. Allowing content creators to retain their intellectual property rights, and being able to license it to other users of SL (this is, for all purposes, what happens when someone “sells” content in SL: you get a license to use content produced by someone else, for a small fee. A tiny fee in most cases: fractions of cents!), was the ultimate discovery to create and manage a successful and thriving digital content creation economy, which, even though each transaction is so little in value, sums up nicely to about a million US$ per day. No other company designing virtual worlds has embraced this route (although a few have come close). Most feel they would completely lose control over what kind of content is sold, and would be kept away from getting a share of the proceedings. They would be quite right! Linden Lab (LL) does not produce content neither charges any fee for selling licenses to use that content. They use a completely different business model — content has to be displayed somewhere, both at the seller’s location (“in-world shop”) and on the buyer’s location (their home or group). Both will require server space to display that content, so LL is in the business of hosting 3D content persistently, for a small monthly fee. Again, this is completely innovative, and even after a decade since Linden Lab was founded, the model is so novel that “nobody understands it yet”, as Philip Rosedale, Linden Lab’s founder, put it so nicely on a recent interview.

    As for “volunteering” vs. “self-interest”… I’d say that volunteering might have given a huge help on the very beginning of Second Life and during the early beta stages. One year after Second Life opened, however, it was the economy of digital content that made it attractive — specially because you could make real money out of it. These days, SL’s economy has gone way beyond merely buying and selling digital content (the services are is probably outgrowing pure digital content production) and has complexified to a degree coming closer to real life with every day that passes, but it was definitely the “economy” that jump-started Second Life, and not “volunteering”.

    There are still volunteers in Second Life. Thousands and thousands of them. All of them very helpful and doing it all for the pleasure of it. But 3D content creators that regularly offer their products for sale, as well as service providers of all kinds (from live musicians and DJs to their agents…), are perhaps a hundred thousand… “self-interest”, in the sense that people can earn real money from this, even if it’s just a little, is a far greater incentive for those hundred thousand

  2. Pingback: P2P Foundation » Blog Archive » Market incentives vs. volunteering in Second Life

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