Stipends and Economy

yes, someone else suggested a "no-land but more stipend" type of account which is between basic and premium in terms of cost (assuming I'm understanding your suggestion). Linden Lab might end up doing this.

Right now, however, they are trying to build demand for L$ (they know this is in their long term interest). Instead of someone paying $10 a month to Linden Lab for some currency, LL is encouraging people to go spend that same $10 instead on the currency market they will be releasing.

One nice thing about the currency market approach is it allows you to buy as much or as little as you would like. So if one month you don't feel like buying anything in world, you don't need to spend any money.


[p.s. csven, you make some good points to Zeta. I think i've explained about as much as I'm going to there -- zeta and I clearly have radically different perspectives on the value of people's time and talent, as well as why its a good thing that SL gives you a choice to spend or not spend as you see fit and as makes you happy]

Well, I'm addressing specifically your assertion that the solution is to chase high volumes: "Again sell cheaply to many is the key". You seem to be suggesting that it's the answer to several issues (note use of "again". And as for the free Basic Account, that's a measured effort - this one only 48hrs worth. It may not even be repeated. So we're back to your Volume theory. Is it or is it not "the key"?

[Edit: just realized I misread the announcement and thought it said "For the next 48 hours..." when it's actually "Beginning in the next 48 hours..." (maybe the edit to that post added "Beginning". In any event, it appears as though we might get a stress test after all.]

Why bother doing this? they could just sell $L directly. It would be the same thing.

Of course that would mean they would be printing L$ to cover the sales.

"What needs to happen is that SL needs to reconize that 70% of the people in SL are here to have fun, and that 15% of the people are content makers. Then the bonus needs to be restored to the way it was 1500 lindens."

Just curious what are the remaining 15% of people there for?

you are suggesting the stipend should be $1500 Lindens a week?

And if Linden Lab does this via an account (creating a "source" it would then flood SL with currency driving the value of the Linden down and forcing a number of merchants to raise their prices to maintain a consistent exchange for US $'s. In the end, someone has to pay people RW prices if they expect someone else to spend RW time making content for their pleasure. So regardless of how many Lindens are thrown inworld, in the end a sale will need to be a consistent US$ dollar value (and I suspect many merchants set their Linden pricing this way). It doesn't matter if the stipend goes to L$100,000 in the future - if they're worth the same amount of US$'s as L$500 is today, it doesn't matter. I get the impression people are looking at the number of zeroes and not the value associated.



*cues "X-Files" theme music*

I want to state for the record I am very glad SL's monetary policy is not decided by majority rule.

To talk about the other 85%.

yes colette. the inflationary pressure on such a move would be obvious, although perhaps no more so than a new customer signing up for a new premium account -- one key difference being that LL itself would get lower monthly revenues from such customers.

No my point was simply that consumer psychology can be a weird thing -- not always logical. LL may end up trying multiple pricing bundles before they figure out what really clicks with the market. It's part of the challenge of being an innovator... working out the kinks.

And yes, I agree that it is good that majority doesn't decide economic policy. What a lot of posters are essentially saying is, "LL, I don't like your business model." Now they are welcome to try to convince LL to change their business model... but I happen to be one of those that wants to see this SL experiment through. It may fail, but give it a proper shot!

It's one possible sollution, yes. Including benefit for the merchants in SL as well; the more targets you have to sell too, the more chance there are for sales. This leads into a whole the supply and demand structure of basic economics (Higher Demand and Less Supply = Higher Prices, Lower Demand and Higher Supply = Lower Prices)

((Persoanlly I think the Land deflation problem is due more to lower demand and Higher Supply then to the current RL$/L$ excange, the lower demand caused partialy by the loss of some of the stipend and bonus stipend in January. And the Higher Supply due to all the new Sim's that have some online.

Really though thats a different issue.))

I sited one case before where AW did the reverse, and went for higher prices from less users. To the end they lost 2/3's of profits and were forced to sell, (twice now i think).

Hope that explains better.

No. It doesn't.

And no need to explain economies of scale - I design/develop real mass-market products in RL. I know the game all too well having dealt directly with both Wal*Mart and Target. What I haven't seen you explain is how a Volume-based system works when the system itself hasn't proven itself capable of supporting the concurrent use of the current resident volume (40k+).

If Wal*Mart suddenly existed in a world where more than 20 people in each of their stores caused all of their cash/credit registers to freeze up, all the volume in the world wouldn't make a difference to them - most of it would likely sit in the warehouse. And people would find another store that could actually sell them something... even if the price were a few cents higher.

One case is imo insufficient to support your theory given the scalability issue you've not addressed. Please address that issue.

I just cant come to terms with those who seem to think that somehow Linden Labs should give out more in Linden Dollars Per month than the USD value you pay to play.



I dont think I can understand why anyone would favor this policy.

if right now it costs $10 USD to get 2500 $L How could LL even contemplate giving you anywhere near 2500L for $10 US a month?

To be honest even the $2000 they are giving now seems excessively High, Since you can pay only 6$ a month (prepay) and get the same stipend.

I really think the stipend needs to be adjusted Directly to the Exchange rate. And some minimum favorable advange for Linden Labs should be maintained.

When Linden Labs print more value in USD then you pay in the system, literally they are forcing All the other players who earn or buy Lindens to Subsidize their Welfare Payments.


----------------------------

My point about the teir program for stipend increases only seems a totally false mechanism. It would literally be Lindens printing money in order to get USD. And it would of course be inflationary. In addition would put them in direct competition with those Content producers who sell Lindens.

Do you think it might be a result of too much blind generosity? The tendency is to place less value on that which they get for free and, further, to come to expect that much and more. When I joined in December I thought all the freebies were due to the holiday spirit. Being paid for attending an event surprised me; still does. (No way did dwell ever come close to covering the costs incurred by a host generous enough to provide a commercial free entertainment venue.) Providing the means to help people learn the system and get started via mentoring, tutorials, classes is not what I'm talking about. LL markets the social aspect to the gaming and online chat communities. There are no time limits set for the come on in and party hardy set. Where is the surprise?

I am here for diversion not a second job. My way of showing appreciation for knowledge which has been shared and the generosity of individuals is by contributing in return. I consider my expenditures to be an entertainment expense. Expecting to pay my way is an attitude I brought with me, not one that was learned here, though.


p.s. Still looking for some insight on the means with which incomeless people are able to afford high speed internet but are not able to pay more than a one time $10 fee for SL.

Mommy and daddy Or Hubbie/wifey.

Csven Concord: one you jsut proved my point, free textures make it even easier.

Number 2: 5 hours at min wage is $25, most peopel are doing this in thier off time anyway.

Numer 3. Who the heck are YOU to bother me about how I talk to Ansche? she knows the crap she's pulled, and I'm by far not the only one to not like her. I made that comment so that I didn't look like I was supporting her shadier activites. So kindly go complain at some one else that needs it and cares. There's a lot fo REAL flaming going on in the topic.

Thought so. Maybe the argument over the amount of ones allowance should take place at home and not in sl.

oh forgot about College comps too......

Maybe more time in Econ class and less time on the college computer would be a wise choice.

If your point was that you should make your own content, then okay. But if your point is that the availability of free textures translates to compelling content, we disagree. If I gave you free oil paint, I doubt you could create a masterpiece (or anything you could sell for a reasonable sum for that matter).



"most"? You have access to numbers? you've done a poll? Or is this an assumption you're making?

Furthermore, if someone is going to deal with filing taxes, I'd be willing to bet they'll use the Business mark up I mentioned (or give up - inundated with suggestions from no-talent critics, tired of dealing with customers who think they're entitled to things never promised, or simply uninterested in dealing with the IRS requirements for filing and maybe having to file with the help of an accountant... assuming they do things honestly of course). So at US$5/hr that means they would charge around US$25/hr.... meaning the item has to recover $125. And of course, that's still assuming they even want to bother working for minimum wage... I wouldn't bother. I'd rather work at my RW wages and just buy Lindens to make my spending money. But I'd certainly not cry about not having money to buy things I simply don't need. People who do that exhibit what appears to be an extraordinary sense of entitlement as if someone owes them something for breathing. I don't get it.



That I stated what I thought about your needless comment is my business. If you don't like what I have to say about your behavior... either don't take cheap shots or live with my comments about your taking them. That's life on a community forum. Feel free to continue. I've no doubt such behavior will win you legions of admirers.

I already suggested this....
/130/4c/60224/1.html

I think you are missing the point completely. The elimination of the bonus stipends is being done for several reasons:
1) The ratings system is broken. People are gaming it.
2) The elimination of excess currency being put into the economy, forcing the value of the $L down.
3) To encourage basic users to purchase $L from other users.

LL has stated many times that they are not going to sell $L. The creation of the type of account you are suggesting would flood SL with freshly created $L. This is EXACTLY what they are trying to avoid. This would cause a devaluation of the $L.

Gabriella's idea has merit in that the mindset of the consumer is indeed strange, BUT the $L distributed from such an account MUST be from other users, not created for that type of account. That would mean the amount of $L received each month would fluctuate, probably causing confusion from players that don't seem to grasp basic economic theory.

You seem to be angered at people's logical replies to your posts. You accuse others of not rationally considering your ideas when it is you, who in fact, are not listening to reasoned responses. Your threat of reporting SL to the government is laughable, I applaud your comedy and am extremely eager for you to post the reply you receive.

I would also suggest that you start using a spell checker, especially on threads you create in the hotline thread, trying to promote services from yourself to LL.

Well, after catching up with this thread I am pretty
confident that I'm right on target, and you are the
one WAY off base...

But that's okay... I'm sure we all are from time to time.
I know I have been myself a time or two, but you
certainly missed the boat with what you thought
my comments were, so let me clarify...




Yes, I am one of the ones who brought up freeloading
and welfare, but I never said Basic Accounts were totally
free, or that people with Basic Accounts were total
leeches.

First, you've made it QUITE clear how you practically
went through some form of torture to earn that $10
you used to pay for your Basic Account. I congratulate
you on your effort and ability and desire to do all that
so that you could be a part of our world here! Super!

However, I think you're expecting a little much for your
$10 one-time effort. A "freeloader" is not only someone
who doesn't pay ANYHING... it's also someone who
pays a minimal amount one-time.. and then continues
to use/take above and beyond what might be considered
reasonable.

The movie theater in my town allows "all you can eat popcorn".
You pay a one-time price, and then bring the bag back for more.
The expectation is that you only use the bag during your
time for that current movie, and then buy another bag the
next time you are at the theater. Certainly (I hope) you can
see the potential problem when many people start bringing
their bags back again and again. The theater keeps having
to buy/make popcorn that you get to enjoy, but you are not
helping to support the theater (much of the profit from theaters
come from the food purchases).

Another example is "all you can eat" buffets. I don't know
of any that let you pay once, and then eat all you want for
day after day, and most will not let you take anything home
for your next meal after you leave. The reason for this
should be the obvious costs involved to buy and prepare
the food.

LL works the same way... they need to buy servers (which
will eventually get old, go bad, etc) and need to be replaced.
They need to pay their electric bill, internet bandwidth charges,
employees (research/devel, support, accounting, etc) and
various other costs... ALL of which are reoccuring costs for
them each and every month!

So, Let's make it REAL simple for you, and say that ALL
their bills total $100/mo. You and 9 other people sign
up for Basic SL accounts at $10. That brings LL $100
for that month... GREAT! They pay all their bills! Which
allow the lights to stay on, and we can continue to enjoy
SL. But.. next month only 4 new people sign up. They
make $40 that month... not enough to pay their bills.
Aside from the obvious (again, I hope) fact that LL could
not remain in biz this way... how are YOU helping LL at
this point? It was posted earlier a short list of reasons
LL allows these Basic Accounts... hoping you do things
like create content, spur the economy, etc, and so if
you are doing these things, then yes.. you ARE helping
in some way... but if not, then you are continuing to
enjoy a service while not helping to support it. and THIS
is what I meant by "freeloading".. I'm sorry you didn't
catch on to that.

Fortunantly for you, LL is being extremely generous
and taking a loss on the Basic Accounts, in hopes it
will help generate enough income from other sources.

What I find discouraging is that it seems a few of the
1-time payment people feel they are ENTITLED to
"more more more" for the same (practically) nothing
they paid last month... last year... 5 years ago.... 15 years..






Uh... I'd reply to this too, but I have NO idea
what you're talking about or what point you're
trying to make.

I think you MIGHT be refering to a "500" number
I used when talking about a possible amount
one person could/might be making from their
BONUS stipends from RATINGS and not refering
to the entire community, so again.. if' you're
making a point, please be more clear.

To that effect... do you know how much $L
you get each week from the bonus provided
from your ratings? That is the number I'm
curious about.





Fortunantly LL has said they will NOT compete with
content creators by creating and selling things like
clothes, skins, vehicles... which I think most content
creators will agree is not only good, but also would
not needed. I DO agree with you that LL should
stabilize the creation/destruction of $L so that
it remains "balanced".. they've said they want to
keep it at US$1 = L$250, but the exact amount
shouldn't really matter.





This is not necessarily true and shows you know even
less than me about the way economics work. You are
right about raising taxes not being good, but cutting
stipends/welfare is a good thing... however, the only
stipends being "cut" are the ones we should all feel are
dealt out in unfair proportions based on the difference
in the way ratings were handled a year ago as opposed
to now.

I could point out several reasons cutting stipends
would not effect the economy in the way you suggest,
but other people have already answered that.






If people have "too much" money then we'd have
inflation... that new skin you want would cost L$15,000
and you'd be in the same place you are now. You show
your lack of economic skills if you think just giving more
people more money will solve the problem.

It doesn't matter to me if you think SL is a game or not...
But at the bottom line, you have these options:

1) Work in "first life" and convert $US in to $L to have the money
you want for things in-world.

2) Work in Second Life (by spending time hosting, sitting
at moneyballs, dancing, creating content, buy/sell land, etc)
to earn the $L for things you want in SL.

3) Don't do either of the above, and make do with the pure
social interaction of the world, and/or make do with freebie
items.

4) Leave SL.

The first 3 choices are exactly what you have in First Life
as you do in Second Life.... Well, I guess choice 4 is too.


If you are going to continue enjoying SL and all that LL
provides for free (after your first $10)... and not continue
to help contribute to LL staying in biz.... while at the same
time you expect those few who DO pay a regular monthly
payment to be responsible to cover ALL the LL bills, then
I will continue to call you a freeloader.


Gabrielle

"3) To encourage basic users to purchase $L from other users."

Don't really want to go into this again, but ok...no this not not fair. Linden Labs is an acreditted business. Buying lindens from them (Or preferably subscribing to them with a mid tier account, full acoount, etc) I'm ok with. The transactions are covered by applicable bussiness laws and liability laws.

Not trying to be offencive, but with rare expecptions I doubt many users have the same credentials and liability protections.

I don't see it as fair to try and encourage (force from my point of view) people to do bussiness in RL$ without those credentials and liability protections. So basically in this new ideal I'll be fracked.

This is part of what caused my earlier angst on this thread, which I probably also did not voice well.

I take it you never buy things through eBay. This is the same deal.
Now, ignoring GOM and IGE and the others, it will be Linden Lab who handles the transaction, once thier trade system is brought on line. They will no doubt make it difficult if not impossible to defraud using thier selling tool. They will likely have method in place to to invesitage claims, also. (GOM has all this, by the way. I consider GOM even better for this, as they hold the L$ themselves, so no one can sell L$ they don't actually have, and won't end up spending the L$ they offered for sale the previous day. Hopefully LL will have a similar system.)
So buying L$ won't be any significant risk.
If you're still unwilling... well then, yes you're fracked. I guess you'll just have to learn to use one of the many ways I've already mentioned to have fun in SL without having to spend RL money.

And I could retort, why don't you all do your bussiness on those services in RL$, and leave our lindens alone? Or why not just adjust your prices on your own accordingly without getting L.Labs involved?

(above is not meant seriously)

My only complaint/comment with your entire post is this. Why shouldn't we expect more from a SL that we pay for than our RL's? If SL is no different than our RL then why bother?