So the one and only answer for the club is to throw its doors wide open and hand out free drinks to everyone?
The only way they'd stay afloat is to continually increase the membership fees of those who are crazy enough to pay. The more popular the club becomes, the less money they'd make because the ratio of free vs paid would keep on increasing, prompting even more price increases.
As Second Life becomes bigger the expense of keeping the grid operational continues to inch closer towards total income and the less LL makes month after month. That's not a sustainable business model.
The only way they'd stay afloat is to continually increase the membership fees of those who are crazy enough to pay. The more popular the club becomes, the less money they'd make because the ratio of free vs paid would keep on increasing, prompting even more price increases.
As Second Life becomes bigger the expense of keeping the grid operational continues to inch closer towards total income and the less LL makes month after month. That's not a sustainable business model.
It's true that model is not sustainable. But my great fear, and I'm sure other people share this too, is that Second Life itself is competing in a wider entertainment market and that market doesn't particularly care for any of our in-world innovations, except as they benefit it. All of the fascinating interplays with the internal market, the real money trading, the creative talent - the overall consumer market still has the power to simply say "No, it was a bad idea" to Second Life as a whole, and drop the ceiling on all of it.
And the big problem Second Life has is that it's offered content creators the best possible deal. They can own their own content, they can design almost anything they want, they can make real money, they can use their sales to pay for their hosting. That's SL's great strength, but it's also its greatest weakness. Because since SL right now gives content creators the best possible deal, the Lindens can't change anything without making the deal worse. And that would be a huge betrayal of trust. LL are proud to market that people are making their living making Second Life content, but at the same time it must leave them trembling from time to time, because they know that if they make the wrong change they could destroy someone's livelihood.
So while the content creation system gives SL a beautiful ability to adapt to the changing market for virtual content.. it devastates its ability to adapt to the changing market for SL itself, which is the market for entertainment experiences. Even among content creators there's a "tragedy of the commons" created. Creator A decides that they'd have many more sales if SL was more popular, and so starts putting time and effort into popularising SL as a whole, and so more customers do come into the world.. but they all go to the store of Creator B who during that time was working on his business, and outcompeted Creator A while she was distracted.
Online "games" have to do this kind of adaptation all the time. World of Warcraft just released a patch to make their game easier, because new users didn't like being stuck surrounded by older, higher level users. How could Second Life do that? If someone complains that it's too hard to succeed on Second Life, they have to be told that's just how it is; it's real business, it can't just be manipulated for them, it has to work like that. Other "games" have had the same thing, where players complain it's too hard to achieve and the high-level players have told them they just need to work harder and shape up. One such game collapsed last month while still in beta, and the developer went out of business. "Ah, but SL is a platform, not a game." Maybe it's right, maybe it's wrong, but it's not your choice, nor even the Lindens'. If the virtual paying consumer market wants SL to be a game and it continues to offer a platform, the ceiling will fall. Maybe consumers who refuse to compete in a real market are psychologically weak people and should be ignored.. but do you really know how big (or otherwise) the market for psychologically strong escapists is?
Thinking about it, I'm starting to feel sure that this is why LL would bring external companies into SL: I think they hoped that those companies wouldn't need to make money in SL, but they _would_ want to bring more people in, because that means more people viewing their advertising. So the hope was that they would do the popularisation for us, leaving all the in-world creators to benefit from the increased userbase. But it didn't work. Do you remember that one blog post where they talked about selling SL as a live music venue? Same thing - most live musicians are far more about getting their music heard by many people, as a route to RL success, than about performing for L$ to cash out. But neither of them worked - big companies didn't need to popularise SL, they only came in wanting the existing base to look at their ads; and if live musicians had the influence with the media to popularise SL, they'd use it to promote their bands directly. So the Lindens are desperately seeking for some group of residents will benefit directly from popularising SL, and who will be able to do it.
So.. no.. the only answer isn't for the club to open the doors and give away free drinks. But sooner or later all of the people providing things to the club might get together and discuss how they can get more people in through the doors, and it might involve taking risks, and it might involve taboo changes..
