Wednesday, September 5, 2007

Leegin, DRM and Second Life

The current supreme court, according to a lawyer friend of mine is "the most monopoly friendly court in a century." I will take his word for it. What I do know is that the decisions that are coming down from the United States Supreme Court touch on issues here in second life. One in particular is the case of Leegin v PSKS, which struck down an almost century old rule that "minimum prices" are always illegal. Not necessarily legal, but not necessarily illegal either. In fact, i would argue in the case of digital goods, maximum prices are almost as devastating to competition as minimum ones. Consider how the "FreeView" television makes it very hard for anyone to enter the tv market in Second Life.

In the case of physical goods there is a limitation on how low merchants can go, because they have to physically pay for the object. In the world of digital goods, where it is often possible to make unlimited copies of something, a minimum price might well be the only defense against every wholesale item turning into a freebie.

However, there is a larger issue here. And one of the problems that I fnd when searching through thinking on second life, is that almost every proposal treats this place as if it were a closed cut throat came of poker. People demanding thet LL tilt the playing field one way or the other, so that some particular group of people have more power than others, and the ability to enforce monopoly prices.

But this is not the case. The reality is that Second Life is in competition against other places for people to spend their time, effort and money. If people are busy slitting each other's throats and exploiting newcomers, those newcomers would leave. The sad reality is that copybot and the freebie ooze have helped retain people, myself included. I would not have stayed if forced to stay in the chimpanzee with lipstick waddling like I had a full diaper phase for long. Nor are the wages paid here for services sufficient to make it worth it. In a world where many of us are paid sub-minimum wages for Szenchen China, charging first world prices is a good way of driving people out.

However there are solutions, and there are root causes of problems. Let me point out the root cause of the problem: we are spat out ugly ugly ugly. People are not willing to pay to get to 2007 standards of acceptable, when they can, and are, going elsewhere. Now what they don't realize is that they could look much better here eventually, but I've read enough accounts where a reporter or other person wanderd around sl for a week, and could not find the exit from newbiedom, to side with content providers against users unequivocally.

As is often the case, I think, the solution is to realize that SL is not a market economy, and it does not have a working economy at all at this point.

When I started escorting, I charged 400L :15 and had to pay a 20% club rake. Meaning 320L :15 effectively. I charge 5 times that now for vox, and that is walk up, some clients pay me more, in effect, to be free for them at their convenience. The same thing is true with content creators and providers: they need to be able to work their way up the scale, and learn the craft. Right now, that is very hard. Either you are a designer with a following, or you are forced to sell in bits and pieces, and watch much of your work go into the freebie system.

The solution here isn't to give people a set of powers that are "not obviously illegal," and then invite others to use not obviously illegal technical means to circumvent them. That damages everyone all the way around. Instead, the solution is to realize that there are newbies coming in, and there are new designers and content creators whose work can be purchased and offered to newbies as a way of improving the quality of starting avatars.

The way to do this would be to change the start page of avatars, which are obsolete and too few, and have LL purchases the rights to much of the better freebied content out there, the prices of which are very modest indeed. People could be walked through builing an avatar, from shape to skin, to hair to cloths to shoes and accessories, which is much more like the process of building an avatar in world. The content could be turned over every 6 months, on the assumption that a designer has made it or not by that point. Designers could be paid a bounty for each avatar that goes premium who selected their goods in the sign up process. LL wins: more retention. New designers win: a market for goods that is in line with the quality they are producing. The community wins, because once content is no longer selectable on entry, it would be released into the public domain, forming an open source base where new variations could be produced.

No it won't make greed fueled dreams happy. But it would grow the content creator class with chances early in their career before they have a large base of merchandise, it would make it so that people would not drop in looking like playdo. Top designers command a premium now, and would continue to do so.

The business in a box racket was always open to abuse. I've seen the advertisements that promise people the ability to sell bad skins, ones below skins that are already in freebie circulation legitimately, for "1000L each!" You can't cheat an honest avatar, many of the business in a box contents are just not good quality. However, the ones that are are the ones that suffer: there is a perverse incentive to distribute the good, and ignore the bad.

But then, when I started escorting I didn't know how to use lockmeister, didn't have xcite, and had a sex bed that broke on me while a client was there. We all need to learn, and there need to be entry points for those who have just crossed the threshold into salable product. The "business in a box" route is not working, and it would take legally marginal technical changes to make it work. While banning it would be legally questionable, after all, one of the most important rights that a person can and should be able to sell is the ability to resell in turn, the present arrangements are driven by the difficulty of breaking into being a designer. A designer who has made one or two items of a particular kind is not going to develop a following, nor be findable.

Therefore, there needs to be a road opened which will both get people started, and curb business practices that have not served sl well. This fits in with ending the traffic/camping system, and finding ways to in world aggregate content so that shoppers can more easily compare goods and services. But even by itself it is a needed change: give sellers the DRM control that they should have now. Give buyers the assurance that their content is not going to be DMCA'd away, and a better starting place for their second life.

It won't do much for camping farms, but it will do something for sl.

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