Tier Fees & Land Pricing

Due to the current land value crash, why not reduce the Linden tier fees to stimulate the market and other economic activity? You could also re-introduce 1st land!!

One alternative is to reduce the cost of smaller plots of land; the way the current tier system works is that the more land you own, the less you pay per square metre. However this means the barrier for entry is increased, as you pay the following for each level. I've given the values as per 100m of land as it gives better values.

$1.17/100m - Premium allowance; 512m on a yearly subscription of $72/year
$1.07/100m - Premium allowance + 512m = 1024m of land
$0.91/100m - Premium allownace + 1024m = 1536m of land
$0.82/100m - Premium allowance + 2048m = 2560m of land
$0.67/100m - Premium allowance + 4096m = 4608m of land
$0.53/100m - Premium allowance + 8192m = 8704m of land
$0.48/100m - Premium allowance + 16384m = 16896m of land
$0.39/100m - Premium allownace + 32768m = 33280m of land
$0.30/100m - Premium allownace + 65536m = 66048m of land

As you can see, someone who only has 512m of land is paying almost 4 times as much a month per square metre as someone with a whole simulator.

While I can understand LL's desire to offer a discount to its larger customers, the difference in prices is IMO a bit high. What I would like to see is this the lower tiers reduced in cost so that 512m is closer to 2 times the cost per square metre. Besides that a more flexible system where you can pay for only what you use, with the cost being determined what tier "bracket" you fall into would be better as well.

E.g - using the figures above if I owned 13254m of land, I would fall into the less than 16384m "bracket" so would pay:
132.54 * $0.48 = $63.62 per month for my land instead of paying the current $81 a month for premium + 16384m of land allowance.

Hmm cheaper tier sounds great , but I fear for the adfarmers with cheap land that will be like making email free for spammers, oh wait we have that now, great isn't it. A couple thousand adplots will be so near free who cares if half of them only are seen by 1 person a year let alone clicked.

ive always felt that the system was mostly a rip off, and that tier should be lower

especially when at the time i bought my first land they listed parcels as holding OBJECTS and not prims, 11X objects is quite livable, 11X prims is just a waste of time joke

but i do like the bulk discount idea, it would actually give me more incentive to get a bigger piece

It should be obvious by now that the last decision to lower the price of private island sims have accomplished several things
1. Its made more money for Second Life Company as everyone and their grandmother has purchased a Regular or Open Space Sim
2. It erased 40% of the assets of the current Sim owners
3. It has forced the Tier prices down on Private island sims so that up to 50% of a private island sim owners Net income has been slashed.
4. It has driven 1000s of residents to buy cheap open space sims who are now finding out that the lag on those if they try to do anything with them is worse(if possible) than living on the mainland.
5.They have created a buyers market they did that as now you can buy virtual land "Dirt Cheap".
6. They have also broken the back of a lot of people who bought sims from them at the old prices.

I really don't have a complaint as I have to assume that what they did was for a good reason but i will note that they didnt make any changes on mainland which seems a bit selfish to me.

Duke

Oh, I forgot to post a link to a JIRA issue a filed a while back asking for the division in tier levels to be reduced:
https://jira.secondlife.com/browse/MISC-765

Do feel free to vote if you want the divide in pricing reduced, there are probably other proposals for things like pay per metre squared but I can't find them just now, if someone else does please post!

LL is selfish. They are a business, and their primary concern is the bottom line, not fairness, not doing the right thing, not serving their customers. You and I experience SL as a community, and so we expect some sort of order and decency from the 'rulers' of SL. That is our problem.

Anyway, the whole ball of wax in the land market hinges on this idea that LL has a good reason for depleting the value of land, both island and mainland. I believe they do, it's just not apparent yet. My concern is when we the residents will be let in on the plan, and whether this plan includes a mainland and private island market into the future. It could very well be that LL wants to take out the profit in buying, selling, or renting land from everyone. Everyone from Asche Chung to the owner of an old first land 512 they rent out to a friend would be up shoot's creek and stuck with tier. However, if this is not the case, if they aren't trying to get rid of the real estate markets, then their plan will benefit these markets long term.

The whole SL economy is based on land prices and tier liabilities. Afterall LL is a data center that sell server space as a backbone. The fact that they provide a 'community' platform that allows a different form of usage from say a webmaster hosting Uncle Joe's ant farm blog, is a diversity from the norm.

The baseline is, you buy a sim, you 'buy' a server (or one core of it and a % of resources), you pay for your sim to be setup, they install your software and give you root access, you use your sim, you pay for bandwidth/support/resources by the way of tier.

All the relevant fringe cashflow from uploads, 'currency' exchange etc are paid for based on useage. Support and upgrading the platform, are partially financed by Premium account fees and % of other revenues.

Altering the Land values and teir fees, will upset the core balance of LL income, quite significantly.

While I feel that mainland sim tier pricing should be lowered proportionally to the previous lowering of private island sims, I do not support the balancing of rates across all tier levels. The bonus given to those who buy more is an incentive to expand and build.

The SL economy is in the dumps because there are too few people playing and spending to support the amount of content currently available. I would rather see LL suspend the creation of new islands until the population and economy need expansion.

LL crashed the land market on purpose. They even warned us they were doing it.

I'd sure like to pay less each month but I don't see it happening due to them lowering tier any time soon.

And for some people it works, I don't want rid of the "discount" entirely. But for a lot of people it forces them to "make do" by sticking with what they have because owning a small amount of land isn't good value, but buying more isn't feasible because they'd be paying more overall (though less per square metre). I know a lot of people with small plots who are put off getting more because double the land for almost double the cost is too much for them when they just want 25% or 50% more land.

It might not be so bad if we could buy any amount of land we wanted within the tier level, so if I was in the 4096 - 8192 bracket then I could buy 6384 square metres and only pay for that amount of land, rather than paying for the full 8192 square metres. If we paid for the land we owned, but still used the tiered pricing structure to determine what the cost per square metre was, then it would be a lot easier for people. A resident could then expand their holdings in small increments rather than having to double their land, or put off increasing tier until they can afford it.
I'm in precisely this situation, my store is earning enough money that I could buy another plot of land in the simulator where it is, but I can't afford the charges for the next tier level. As such I'm not buying the land at all until I'm confident I can afford to double my holdings. Meanwhile if I could just snap up an extra 1024 square metre plot and only have to pay extra each month for that plot alone, then I would happily do so.

My advice to Lindens concerning the tier fee is to increase the fee for small plots like the mostly 512sqm and to align the fee between the quarter, the half and the full sim;

) As you increase the fee for the smallest plots (i would suggest on new sims the minimum size is 1024sqm) in relation with a timescreen of 4, 8 and 12 months. As longer the owner holds the land as lower is the fee they have to pay for it. You can sort this stepping by a discount of (per example) 5% by 12 months. By 8 month 3.5% and by less than 4 months is no discount. My thoughts concerning it are that a discount for constancy prevents landdealers from increasing of prices for land who is sold in a time of (per example) 3 days 3 times. (I have seen that, a 8146sqm plot who has started at 15000L$ and ended by the third party with a price of 56000L$) ((and i was not concerned in this deals!)) To make money is good, but remember SL is a game!

) further as you adjust the fee for larger plots like quarter and half sims more people are able to buy larger land. As lower the price for them as lower the littering is and as more LL takes tier for it. I guess the recalculated average of Landsize to tier is just eliminated.

)You use the same discount system as above to prevent landdealers to increase the landprices (what is best known on mainland). The reverse side of such a system with larger plots and fewer handchangings is that the land littering may go down to a acceptable level. If one owns a sim and would resell it under the timescreen of 4 month the cost where at a normal level - if the ownership is longer the cost goes down and the littering of land perhaps decreases. The second is that this would prevent anymore from this allside hated ad farms around SL. If ppl pay more for small plots they think over if they put ads on their land or if they use it for regular circumstances! Or have you seen a full sim who is a ad farm?

)my thoughts to Lindens concerning tier fees are the following:
65535sqm mainland = 150$ monthly, payable by month, special rebate system if more then one sim is owned. subdividing allowed
32264sqm mainland = 110$ monthy, payable by month, rebate system, subdiv. allowed
16384sqm mainland = 95$ monthly, payable by month, rebate system, subdiv. allowed
8192 sqm mainland = 48$ monthly, payable by month, rebate system, subdiv. allowed
4096 sqm mainland = 28$ monthly, payable by month, rebate system, subdiv, denied
2048 sqm mainland = 19$ monthly, payable by month, rebate system, subdiv, denied
1024 sqm mainland = 12$ monthly, payable by month, rebate system, subdiv, denied

As counteraction to the adjusted landprizes the premium membership increases a little bit
but premiums receive not longer a free parcel.

For estates i didnt have thinked over but my thoughts are that open sim's must be able to buy for non sim owners also! Such of this landlords are really rooks and put a charge of 25% on their sims monthly by rentals. I prefer for this case of landowning and stronger bonus system and that tenants who rent such sims longer then 4 months reveive a bonus in form of a repay from linden. That would be not more then fair and assits more clearance between landlords and renters. If Linden sells open sims to non sim owners such a behaviour would be lowered and the pricelevel becomes a bit to be similar to mainland.

Usually a noob has seen the most of SL within 3 months, this timescreen is enough long to grant them for rebates.
I know this model has holes and is not finished but it will be a base for further decisions.

Wait a second, you want to INCREASE tier charges? No. Just no, all you'll do is make it even more unfeasible for people to own smaller plots of land, resulting in more people having to rent. All due to respect to rental services but this is not ideal, as there is simply no protection; end result is that you encourage more land-scamming through dodgy land rental businesses.

When I first logged into second life over a year ago I took one look at the "land" situation and said to myself "been there done that." This is absolutely nothing new and I predicted then how things would progress based on how I saw web hosting progress at the beginning of the WWW. And everything has gone EXACTLY as I predicted.

You can debate this up, down, sideways, and backwards but this is what is going to happen. Eventually land prices will drop to zero. Land sales will go the way of "set up fees" in web hosting. Argent Stonecutter has been saying it over and over in the blog and I will repeat it here, land prices are not an investment, they are an operating expense. if you don't see the business logic of having land basically free and only charging tier...try a land search for estate land and look at all the land for sale for 1L. And most of the people selling that land for 1L are the exact same people screaming in the blog that LL is being greedy for trying to do the same exact thing.

I will add that big land dealers are NOT LLs customer base. They are a small group of middle men inserting themselves between LL and its customer base and it was the greed of some of these that falsely inflated the start up cost for the small land owners. LL has taken a huge step in making it easier for new players to get land and they are going to do far more. Just before the "land crash" I began selling off my land at 10L/sq. Land flippers were grabbing it and jacking it to 12L/sq. Many got burned bad as they should have but some of the worst are still doing the same thing.

On the WWW it started out with one pop mail account with an expensive hosting account and you paid extra for more. Almost everything was that way. Now everything like that is virtually unlimited. At first knee jerk people think that the prims in SL will go that way. That we should have more prims allowed on small plots of land. But that isn't the way it is progressing nor should it. The last thing we need is for ad farmers to be able to put ads every 50 meters all the way up to the new 4096 building limit on a 16m plot. Think about that for a minute while you enjoy the view from your skybox. Cramming more prims on smaller lots is not going to ease the mainland crowding everyone is complaining about.

The answer is to make it cheaper to own large plots of land. This in itself will clear out a lot of the mess. It already has. I have a mainland 8196 lot and you can't see a single ad from anywhere on it. mostly what I see is wide open spaces with a few nice houses and some great landscaping. I owe this to LL. Thanks to them I was able to dump off all my assorted property being squeezed by ad farmers and land speculators and get one very nice clean rectangular lot with great neighbors. It is obvious that SL is going this way. Look at all the land they opened up. They did that for their REAL customer base and they are going to open up a LOT more.

The one thing I would suggest with tier is to base it heavily on the amount of property you own in ONE region. If someone owns 512m in one sim, they should pay a lot less tier than someone who owns 512m spread over 32 regions (16m per region). This would give land owners trying to expand their holding in a sim a big advantage over land flippers and ad farmers. This, again, would greatly increase the amount of green, open space and that is what everyone is really screaming for.

Does anyone else here remember the beginning of mobile phones? Cable TV? the WWW? DSL service? CB Radio? Like I said, been here done this...a few dozen times in my life. Ho-hum.

Like i said, this 1L offers are lure. If you didnt see the sense behind it you have nothing understood here. The most of the estate owners are rooks and steal the moneys from their participants. As cheaper the buy price for land on estates as bader the covenant and the terms behind are. And as more expensive in the most cases then usual (main-)land! I have over a dozen names from landlords in mind who follow straight this practices.
I suppose you never have owned land cotytto.

I hold on my last statement; tier fee's has been to increase especially for the smallest lots! That are this who make the most of land littering and the ad farms. Subdividing not allowed

Sorry. I don't mean to be harsh, but I do not recognize the statements or opinions of people who reply to my posts when they clearly have NOT bothered read or understand what I have written.

Lol, in one case you are right. I just overflyed your post, now i readed it more exact. And you are not wrong in your foretell. I dont have taked it harsh.
I think in mind we come close concerning the tier case. For me its a thing of landregularities, economy and at least the fun.

Yes, you are correct, in some ways we do come close in our thoughts on this.

Jane, do you have a source for this? or is it your opinion? It's very defamatory.

I've been thinking about two things...
Competition between Mainland/LL and Islands/Non-LL landlords.
The fact that tier is step changes.


To create a level playing field I think there should be a basic "land rental" cost per square meter. This is for zero supervised/managed land, e.g. Islands. Different landlords including LL should then charge a management fee which reflects the degree of management of the land. This includes covering the costs of and maintaining public land and also the effort to maintain any covernant or rules.

The current pricing has a premium for Islands which I assume was because these were marketted at businesses and other organisations that wanted exclusive land for their organisations use. The problem is that where Islands are owned by landlords they have a financial disadvantage over LL. Economies thrive better when there is free competition and this difference has similar to a protectionist import tax. Experience of protectionist practises, eg the car industry in the USA, suggests that the protected industry becomes uncompetitive over time and then suffers pain when the barriers are eventually removed. Based on these economic principals my belief is that if it hasn't happened already this will tend to happen to LL's managed land.

That said protectionism can work in the short term to give an industry time to get it's act together. We might be at that stage right now as LL is clearly trying to up it's game in land management. I think this should be combined with restructuring the pricing accordingly with a view to creating a level playing field.

[For the record I am not a landlord and have no current plans to be one.]


In a different discussion people are considering what to do with small 16m plots of land if some of the current uses are no longer desirable. I would like to see these incorporated gradually back into neighboring plots. One barrier to this is the current pricing structure. For example I own a 512 plot. If I wanted to purchase a neighboring 16 plot then this would move me to the next teir level and the incremental cost is prohibitive.

I would like to see the cost being per square meter. I have no problem with discounts as the holdings get larger but if you draw a graph of square meters held against rental cost you should get a continual line not the current set of steps.

Perhaps related to this I would abandon the concept of premium membership and instead simply charge for land. This would make land rent more transparent. Membership costs should be funded from land rent.

When it comes town to bottom line technicality, tier fee is really nothing more than a server hosting fee. I'm not actually getting anything except some space on Linden Lab's servers. Tier always seemed to me like a complete rip-off fee and its why I flatly refuse to own anything more than 512m.

Its my own source and also from some friends i know over a year in SL. Then make a landsearch ingame and take a look of the several offers you find. Then compare the offers and compare the monthly price they want with the price linden does charge for it!

Again; I never advise to anyone who is interested in owning of land to go to a estate. When you readed my post accurate then you know that i stated that the most of them are rooks. The give wrong promises and when you leave they didnt want to know what they have told as you was in front to rent or buy it! That starts by the refund of the landprice and end by the promise to protect you. They rent out open sims starting from 100$ to 135$ monthly and Linden does take a tier of 75$ for it monthly. Business is good but stealing of my moneys i cant underwrite, especially by a extra charge of 25%! I advise anyone who wants to go to a estate to compare first the covenants very carefully! Take also a look how many traffic is counted to the land. Then you are informed if the estate has a good flush of visitors and if their business is running good or infrequently. LL has to control the business behavior of the open sim owners more exactly and has to set closer terms to them concerning the re-renting of it.
Thats my conclusion after a long time of second life and im free to recirculate it as long i didnt have named someone.

On some of the sims where we have land, the owners quite often sell land plots at 1L$. Crazy you may think, but if you buy at 1L$ you can only seel for what you paid for it. Whats important is the teir liability for the owners of the sims.

Its a good system to only sell for what you paid for it, irrespective of when you bought it, as this maintains stability in the economy and prevents the resellers of making gains from buying the 1 sq mtr prim hog, in the middle of a nice estate and banging up For Sale signs, whilst they make good profits for reselling over and over. It also means that whilst you don't have an asset earning money, you do know, buying or expanding anywhere else on those sims, you know your costs up front.

I think bringing back first land would be an excellent way to stimulate growth.