The End of Freebies?

Immersion is entertainment

There is naturally a problem here with conflicting motivations. 3D content creators have focused on Second Life, as opposed to continue to develop for other environments, because here they have an expected return on investment. Put in other words: while elsewhere on the ‘net, content creators are more worried about promoting their skills and having a good portfolio to get the odd contract or two (or getting employed by a 3D content development company), on Second Life there is an expectation of direct sales, and this motivated a lot of content creators — probably hundred thousand or more — to develop (almost) exclusively for Second Life, where they can measure the return quite effectively.

Of course not all modellers are after the money; a lot simply create for the fun of it, as an artistic expression. They might tag their items for sale or not at a whim. However, the majority of the content creators that are the most active have a huge incentive for continuing to develop content and deploy it in SL (at the rate of 250,000 new items per day!): the effort pays off (even though, of course, it’s not as easy as it seems, as many wannabe creators have quickly found out — the market in SL is as tough as in RL!).

The “freebie economy”, no matter what its ultimate motivations are (ideological/political or otherwise), is a strong deterrent for content creators to continue their output. There are good reasons for that. There is little opportunity for content creators to use SL as merely “another portfolio site” — its lack of widespread availability (not everybody will log in to SL to view content in search of a modeller to hire) and hard-to-search-for features are not as good as, again, the Google 3D Warehouse. While this might change, it’s certainly not the case now, although some content creators are hired based on their SL portfolios (Beta Technologies definitely handles their recruitment that way, and there are at least another 250 developers on LL’s list which very likely do it as well). Most content creators, well, just sell content.

But freebie/very cheap items are getting better and better (again, I’m excluding the pirated content, which just aggravates the problem), to the point of having a level of quality that is often hard to distinguish from market-price content. Well, it’s a free market, right? People are allowed to tag prices as low as they wish, and compete as they like. Content designers feeling that they’re failing to attract customers should work to increase their output and quality so that they address their customers and make them more willing to pay for a good item some L$ instead of “shopping for freebies”.

Why should residents pay for something when similar items are available for free? Well, consider that virtual goods are not really physical goods, although I’ve heard that often enough; but sadly, no matter how much we would like to have them as equivalents, they’re not. Still, they do have value! Not an intrinsic value — in the sense that you buy, say, a real-world shirt, because it provides you some degree of protection against the weather, so besides being a “pretty item” (in the fashion sense of the word!) it also confers the owner some benefit, and shoppers may pay different values for the characteristics of the material (if it’s warmer or lighter) as well as subjective values like “brand recognition” or “being fashionable”.

In Second Life, the utilitarian aspect is naturally not present on digital goods, only the other subjective aspects. But there is a new aspect, which is often quite neglected: the entertainment value!

How many of you have started to watch less TV because you were connected to Second Life? 🙂 Even if it’s just 5 minutes less per day, it’s a start! What happened was that you’re taking your time from one entertainment channel — TV — and putting it into a different channel, your immersive experience, Second Life. Nothing’s wrong with seeing Second Life as a “substitution” product for entertainment, but that means it also gains value. You pay for your TV network channel subscription because you get entertaining content for your money. Second Life is not different: spending some L$ in SL is just giving your entertainment a “price tag”, if you wish, in the sense that you’re happy to be around and willing to spend a bit to get some extra entertainment. You can see the analogy with someone who acquires first a pack of “basic” TV channels and then some extra channels as you start to give more value to time spent in front of the telly. This is not unusual: people having fun with some type of entertainment are willing to spend a bit more on it, investing in their primary forms of entertainment.

Now obviously getting entertainment for free is a huge advantage, and this happens everywhere, of course. If you like books, getting them very cheap is a joy (or just borrowing them from friends!). If you’re more into movies, nothing makes you more happy than watching them for free on YouTube or similar sites. So although you value entertainment, you might enjoy it even more if it’s for free.

But there’s a catch. If all entertainment is for free, high-quality entertainers and performers will feel less motivated to create entertainment, since it will become less and less likely they’ll be able to sell it (or at least sell enough to make it worth the time spent in creating that entertainment). At the beginning, this might actually work better for entertainers. The first generation of free entertainment is usually very low quality: high-quality performers are professionals with special skills and a lot of experience (and that’s why people are willing to pay to watch them perform!). Thus, between listening to your neighbour’s attempt at singing opera on YouTube, or buying a ticket to a concert by Cecilia Bartoli, a true opera lover will prefer the latter; in fact, just by watching the horrors on YouTube, you might at the beginning feel compelled to pay more for a ticket, just because you might think “oh my, I really need to listen to a real singer for a change, I can’t hear these dreadful wannabe singers any more!!”

But suppose that actually all other opera singers start to put their performances on YouTube for you to watch for free! Will you still be willing to go to opera and watch Bartoli perform? Perhaps not — the cost might not be worth the amount of entertainment you get in a couple of hours, compared to watching dozens, hundreds, or thousands of hours of top dramatic singers on YouTube. You might invest in a better Internet connection instead, and start making selections of the best singers on YouTube and suddenly find out that, after all, even though they have no international fame and recognition as Cecilia Bartoli does, they might sing as well as her.

This is the turnpoint at where things start looking quite bad for Bartoli. At the beginning, she might put her performances on YouTube too, fearing that if she doesn’t, people will “forget” that she exists and just watch the free performers. But sooner or later, Bartoli’s fans will just watch her on YouTube and ignore the concerts. Concerts get cancelled — although, for a while, studios and networks might capture Bartoli in high quality, sell some ads to pay for the costs, and upload the video to YouTube, distributing it for free. This just works until Bartoli finds out that she can just get pretty well the same results with a reasonably decent digital camera and a good podcasting microphone (after all, these days, many recent computers can produce 1080p HD quality videos) and upload her own videos — and forget about the studio or producer, who will slowly disappear in this age dominated by amateur videos and podcasts. But… the next step is Bartoli disappearing herself as well, since she now “competes” with free content creators everywhere, and is just another singer in the middle of the network traffic jam. How can she differentiate herself from the masses?

She can’t. Ultimately, she’ll be forgotten and just another voice in the background, and probably get a job at the nearest Wal-Mart as a cash register operator. What a sad ending for such a talented and experienced professional singer!

In the real world, we’re not that far yet, but on Second Life, this is slowly — very slowly! — happening. And this is what Linden Lab has figured out: freebies, or very cheap items, completely flood their e-commerce companion shop for Second Life content, XStreetSL.