An alternative model

Have you ever considered commoditizing traffic?

Looking at popular places and adding everything up I get 1163811 total. My tests have consistently and predictably shown that traffic is calculated as 1 point per avatar per minute. Dividing by 24 hours in a day and 60 minutes in an hour that comes down to an average of 808.2 residents at any given time in just those 20 spots.

Concurrent logins fluctuate between 6000-11000. This means that at any given time 7.3%-13.5% of all online residents will be in a popular place. Put another way, just 20 locations (half of which aren't even full sims) are responsible for give or take 10% of your consumed bandwidth 24 hours a day, day after day.

As Zee Linden pointed out, current tier pricing is costing you money rather than making you any, or at the best letting you break even. Your current solution is to raise prices for everyone who owns land (new sims now, and it is clear from Zee Linden's comment that the rest can expect similar changes soon).

Despite the uniqueness of SL, LL is at the core a content provider and a hosting service. I'm having a lot of trouble understanding why you don't adapt a pricing scheme that has proven itself to work for other business and allows them to flourish and grow and still offer services that is within everyone's reach and budget.

I pay for web hosting. I get a bit of space on some server and an allocation of traffic/bandwidth. I can choose to not use any of it at all, host a personal site for my own - and hopefully other's - enjoyment, or start a commercial site. Were my site to become popular I would run out of either disk space, or find that my allocated bit of traffic just doesn't cut it at which point my host will offer to either throttle access to my site or bump me up to the next payment plan.

When comparing this to SL I clearly see that the paying for a bit of space is present (amount of land I own). If I need more land then I need to tier up, which comes at an increased cost. However what is missing is the undeniable fact that a piece of land with 1 resident consumes far less resources (be it bandwidth, processing power, etc) than if I were to put 50 residents on the same bit of land day after day.

I would respectfully urge you to consider going down this route. None of your residents are upset at having to pay more for more land and I suspect few will be upset at being asked to pay more when they consume a very disproportionate percentage of all of LL's resources.

The impact of such a pricing scheme will be minimal to the majority of tier paying residents and it doesn't price anything out of anyone's reach. If current tier pricing just doesn’t cut it, then you will have to increase it, and there is no way around that. But I’m not sure how you can defend that an empty sim has the same running cost as one that is overcrowded 24/7.

On a side note I have very little doubt that you can come up with other ways to increase income that will appeal to corporate customers specifically. Like the customized last name you introduced. If you can figure out a way to appeal to IBM's caution that SL isn't currently suited for meetings because chat passes through your services, I have no doubt that companies will be willing to pay you good money for having access to secure means of communication.
If you get to the point where sims can be hosted outside of the LL grid, offer that service with a intial payment for the sim server software and on top of that you can charge significantly more than tier would be for 24/7 support, development, assistance and what not.

Hi Kitty! Yourself and some others have sent similar ideas to us. So now that we're aware, we can look at it closer -- it's interesting you were bringing up the topic of webhosting, because that was, without a doubt, on my mind the other day.

I don't know of any further details we have right now to share about changes to traffic, but thank you graciously for sharing, and we will certainly consider it!

The long-term dream for some is "host your own grid", and realistically that would be sometime away, even hypothetically. But as you lucidly explained, always a good thing to keep in mind as we go through some really big changes.