Transcript of Discussion of SL Changes with Philip Linden - 1-13-05 - Part 1

You: Welcome everyone to a discussion on the recent changes in SL
You: I'm happy to present the CEO of Linden Lab
You: Philip Linden

Philip Linden: hi all!

Philip Linden: exciting times... like the chinese say.

You: Philip will do some intro remarks and then Ill take questions and comments

Philip Linden: Well I'll not take much time before the questions...
Philip Linden: But I suppose I can give an overview of what it feels like we are mostly debating this week....
Philip Linden: the changes to ratings stipends,
Philip Linden: and event support.
Philip Linden: I think it is important to point out,
Philip Linden: that by reducing stipends and supporting less events,
Philip Linden: We aren't passing any kind of judgment
Philip Linden: on what people should or shouldn't do with their time in SL
Philip Linden: we are simply making gradual steps toward the state of affairs that Second Life,
Philip Linden: as a platform,
Philip Linden: is designed for.
Philip Linden: The meaning of jobs and games and fun and socialization,
Philip Linden: and everything else here.
Philip Linden: Is created by you,
Philip Linden: not by us.
Philip Linden: This means that the subsidies that we pay into the economy,
Philip Linden: and the things we support with our work,..
Philip Linden: they are temporary.
Philip Linden: SL is growing much too fast for us to do them indefinitely.
Philip Linden: I don't want this to become this huge world where we all do some similar job
Philip Linden: for the Linden Lab 'empire'.
Philip Linden: That isn't our thing.
Philip Linden: We want the jobs and purpose to come from you.
Philip Linden: I think this may get lost a bit in the debate....
Philip Linden: it isn't and shouldn't be our choice...
Philip Linden: whether clubs or events prosper or wane.
Philip Linden: the idea is you decide it.
Philip Linden: So with that,
Philip Linden: let's take questions.

You: Taco Rubio: Philip, do you anticipate fiscal corrections to take place often, and if so, can we look forward to a certain day each month, or quarter, in which they'll be announced?
Philip Linden: I think a fixed schedule makes a lot of sense.
Philip Linden: So we'll work on that... perhaps once a quarter to start.
Philip Linden: Ideally I'd love to see us use a more formal process, including some sort of overall review,
Philip Linden: for all economic changes.
Philip Linden: So we'll shoot for a fixed schedule.
Philip Linden: I suppose 'emergency' changes could still happen,
Philip Linden: if things are totally getting screwed up,
Philip Linden: but a review every few months seems good to start.

You: Pendari Lorentz: Question for Philip: Has any thought been given to wiping everyone's current ratings so that everyone can start with a clean slate? Making it so that newer players can actually compete for ratings now that they cost more and to some mea
Philip Linden: We are listening to feedback on this, but haven't decided yet.
Philip Linden: We can wipe or change ratings chronologically,
Philip Linden: so if we all decide that is best thing to do next week or something,
Philip Linden: it is OK - we can change stuff before today, etc.
Philip Linden: Very important to think carefully about wiping... folks have spent a long time in SL.
Philip Linden: But it does seem like an interesting possibility. No decision yet.

You: Talen Morgan: The rating system has never worked...why can't we get rid of it completely?
Philip Linden: I believe that we need some sort of ratings system to create some minimal confidence or knowledge of history
Philip Linden: when dealing with others.
Philip Linden: In the real world,
Philip Linden: we have all the physical stability of real identity
Philip Linden: to fall back on.
Philip Linden: you can look at someone and make decisions about whether you want to talk to them, etc.
Philip Linden: Here we don't have as much of that data.
Philip Linden: I think that longer term,
Philip Linden: roughly...
Philip Linden: we have two types of possible systems...
Philip Linden: and perhaps we want both.
Philip Linden: This has been debated to good progress in forums.
Philip Linden: One is transactional ratings....
Philip Linden: you buy something and rate the seller.
Philip Linden: these seem important for buyers and sellers.
Philip Linden: by increasing the rating cost...
Philip Linden: it makes the existing system more like that.
Bonecrusher Slate is offline
Philip Linden: but another system is the sort of thing that,
Philip Linden: for example,
Philip Linden: Cory Doctorow captured with his idea of 'whuffie'...
Philip Linden: indirect or passive measurements of how people are related.
Philip Linden: I think there are some possibilities for other directions there
Philip Linden: that could be very compelling.
Philip Linden: But I do think we need something,
Philip Linden: and that the L$25 fee will help stabilize the existing system a bit.
Philip Linden: BTw,
Philip Linden: I compared how many ratings were given out today between noon and 4pm
Philip Linden: to the same period last week.
Philip Linden: it was interesting.
Philip Linden: there have been about 1/7 the ratings given out.
Philip Linden: But the price is 25x higher.
Philip Linden: I'm not sure yet what to make of that.
Philip Linden: But I thought I'd share it with you.

You: Cristiano Midnight: My question would be why has Linden Lab spent so much time attracting a casual consumer class of playmy question would be - what would you say to players who would say that without event support/stipends, they cannot afford to enjoy SL because they are not creative, and cannot afford to buy currency from a third party
Philip Linden: I think the answer to that is in what I said at the start.
Philip Linden: We want everyone in SL.
Philip Linden: Not any particular group.
Philip Linden: The economy and decisions made by the community should support (or not) different classes of use.
Philip Linden: I don't want to pass judgment.
Philip Linden: I think there is plenty to do here for someone who isn't 'creative'
Philip Linden: and SL can be a great place for them.

You: FlipperPA Peregrine: Can you have Philip explain the basic premium account math that is costs US$10, over the course of a month, you get L$2000 more, which equal US$8.30, so really, premium costs US$1.30 per month?
Philip Linden: The growth in the economy...
Philip Linden: the fact that you guys are adding value rapidly,
Philip Linden: coupled with the smaller percentage of money traded versus held,
Philip Linden: makes that math work.
Philip Linden: If everyone was turning around and selling those dollars,
Philip Linden: we wouldn't be standing here.
Philip Linden: They are keeping them and reinvesting their time in SL to make it grow.
Philip Linden: Thanks for that!

You: Travis Lambert: Q: Will there be any short-term changes to developer incentives?
Philip Linden: The dwell program is unchanged.
Philip Linden: So no, no change.

You: Surreal Farber: Can we expect to see some guidelines on what is an Educational Event, and about when will we see that?
Philip Linden: Yes, we are writing those now.
Philip Linden: Let me look at a rough list... hang on...
Philip Linden: Examples include SL Basics, Building, Scripting, Texture design, Land Tools, Group Tools, Land 101, Using the SL Interface, Starting a Business, and Intro to Particles.
Bianca Baggio: adult education?
Philip Linden: There is a rough list of the kind of events we are thinking.
Philip Linden: Hah! Adult I think not.

You: Cinda Valentino: Is there anywhere specific that we can advertise the jobs we need filled?
Philip Linden: Great question. I don't know.
Philip Linden: Send me an email with thoughts on that if you like. I will think about some solutions.
Philip Linden: Yes the forums are one choice.

You: Terin Martov: Do see all Linden support eventually ending, including base stipends?
Philip Linden: As long as we are growing the population, there is an ability to create incentives.
Philip Linden: In a way similar to a country.
Philip Linden: So I anticipate that we will be able to do different things for a long time to come.

You: Weedy Herbst: Q Does LL have an economic consultant and from which model is that economist following?
Philip Linden: We have a guy on the advisory board who is a real-estate economist.
Philip Linden: We have an investor who started a successful bank.
Philip Linden: We talk to lots of different folks about economics.
Philip Linden: We are still looking for a formal advisor.
Philip Linden: So no specific model.

You: Sharn Musashi: are there any concerns that players will leave the game with the current changes to the system? and or act against linden labs?
Philip Linden: I hope not.
Philip Linden: No one has been leaving so far.
Philip Linden: I think that we have earned some trust
Philip Linden: in how we do things here.
Philip Linden: I know we can always do more.
Philip Linden: But we try to be very responsive and listen carefully.
Philip Linden: Bear in mind that taking a vote isn't always the way to listen.
Philip Linden: I've mentioned this before...
Philip Linden: study game theory and the 'tragedy of the commons' for more info.
Philip Linden: sometimes what folks do individually is not best collective outcome.
Philip Linden: So it is very hard sometimes to listen and also make it clear that we are listening,
Philip Linden: and also make good decisions.

You: Madison Rutledge: We pay, like myself high tier prices, and a fee monthly to be here. I don't think reducing what little we get to spend here if right or fair. If anything every one should get a livable wage or stipend. You have tossed all this into flux w your major plan and cost us L big time and that means US too. I am along w all I talk to not happy, many are thinking of leaving SL
Philip Linden: The overall stipends are tied to growth and the economy,
Philip Linden: as I've explained.
Philip Linden: We will not have the economy fail,
Philip Linden: to meet a collective income expectation.
Philip Linden: The numbers are as large as they can be.
Philip Linden: And we will periodically update them as we've been discussion,.
Philip Linden: But remember that all stipends are a bonus,
Philip Linden: justified by growth.
Philip Linden: The economy in a closed system is of fixed size.

You: Clio Anansi: Given that Linden output to players will be decreased, any chance of to-Linden payments (file upload fees, for example) being lowered too?
Philip Linden: the upload fees do not have a huge effect on money supply,
Philip Linden: as they are pretty low.
Philip Linden: I think the right answer there is technology.
Philip Linden: We need better tools for deleting textures and other assets that are unwanted,
Philip Linden: for example,
Philip Linden: Right now we have something like 3TB of assets.
Philip Linden: that is a huge load.
Philip Linden: we have to get that number down and load times better,
Philip Linden: before we can allow lots more uploads.
Philip Linden: Not really an economy issue.

You: Bianca Baggio: If you want everyone in SL to enjoy themselves then why take away their fun and pleasure because you think we should have more "educational" events and they are the only ones that deserve reimb. you are passing judgment in a way..isn't this really about cleaning up the SEX in 2nd life that has gotten so out of hand
Philip Linden: Again, as I said at the start.
Philip Linden: We don't determine what is fun...
Philip Linden: I suspect that many folks will find ways to fund these experiences
Philip Linden: privately.
Philip Linden: I know some folks are doing that now.
Philip Linden: I have no opinion about sex in SL.
Philip Linden: That is not our concern ... whether to 'clean up'.


You: Cinda Valentino: I made a business decision to pay $125 a month to play here, now I feel that I have made that decision under false pretenses. You took 1/2 of my weekly stipend and 100% of the small help i had with hosting events. Am I able to change how
much I'm going to PAY YOU a month?? I think not
Philip Linden: What you pay us is based on the real cost of servers and bandwidth.
Philip Linden: What we give in stipends are related to growth and the internal economy.
Philip Linden: we do not profit from L$.
Philip Linden: So different issues.... not related.

You: Schwanson Schlegel: Are there any plans to either increase or decrease land tier fees?
Philip Linden: No plans to change land tier fees.
Philip Linden: But certainly listening to feedback.

You: Lillitha Tabla: I want to know if you considered the fact that the changes in the policy regarding ratings can be abused by people in a negative way, i was attacked twice today by some random person and it costs more to negative rate as well
Philip Linden: Our hope is that frivolous rating... just to annoy people for instance,
Philip Linden: will be reduced by the higher cost to rate.
Philip Linden: Let's see what happens.
Philip Linden: The money collected from ratings,
Philip Linden: like the uploading costs,
Philip Linden: isn't very much.
Philip Linden: A few hundred thousand L$ per month, so very small.

You: Cristiano Midnight: why are stipends given to wealthy players? I long ago stopped relying on a stipend, yet I receive one like clockwork - wouldn't it help to reduce stipend payouts to only those who have under a certain amount in their account, the way
You: it was handled with taxes in the past (the 3000 limit)
Philip Linden: I agree that might stimulate the economy,
Philip Linden: but our general principle has been to try and be fair and uniform where possible.
Philip Linden: I can see a strong argument that making more money shouldn't cost you your stipend.
Philip Linden: but of course I could argue the other side as well.
Philip Linden: It's a good and deep point. I don't know the correct answer.
Philip Linden: Would love to see discussions on that one.

You: Lukas Thetan: I am under the impression that LL wants SL players to provide for themselves, and with these changes we will have to be doing more to have events which are successful. Will LL provide us with improved tools to be able to succeed? Better event notification and filtering systems, a reservations system, and event management and administration tools?
Philip Linden: Yes we will, and we are hiring as fast as we can.
Philip Linden: we've already been able to get some great people on in the last few months,
Philip Linden: so we will be able to add tools quickly.

You: Danny DeGroot: Any chance of floating the Lindens For Land program against GOM or something similar?
Philip Linden: Lindens for land?
Philip Linden: I'm sorry I don't understand... what is that?
You: paying land tiers in $L
Philip Linden: Oh... OK.
Philip Linden: well the challenge with doing that is twofold...
Philip Linden: one is clearly it takes away income from LL,
Philip Linden: because we can't change the L$ into US$.
Philip Linden: But I think the bigger problem is that it makes the amount of money
Philip Linden: removed from the economy highly variable....
Philip Linden: we would have to vary some other supply or something,
Philip Linden: to match the % that program was used.
Philip Linden: But I agree I'd like to see L$ usable for everything.
Philip Linden: The problem is we'd need a fair way for Linden Lab to turn hard cost items (like those) into dollars.

You: Surreal Farber: Question for Phillip: Are there any figures on what percentage of people are in world as opposed to those in the forums?
Philip Linden: Good question.
Philip Linden: I don't know current data on forum posters versus in-world people.
Philip Linden: If I had to make a rough guess I'd say that something like 10-20% of folks are using forums.

You: milady Guillaume: community should support (or not) different classes of use: adult themed education classes ARE part of sl society..why not add them in some way to educational events supported by SL?
Philip Linden: Something to consider...
Philip Linden: I guess it is a question of how much interface education,
Philip Linden: etc,
Philip Linden: is involved there.
Philip Linden: we're open minded...
Philip Linden: but would have to be useful to everyone.

You: Nefertiti Extraordinaire: Weren't all stipends based on the rating system? If so, how will you decide 1/2 of what # we will get now that rating is more difficult?
Philip Linden: good question again.
Philip Linden: In essence,
Philip Linden: the ratings stipend is on a curve...
Philip Linden: so it gives money based on where you are relative to others.
Philip Linden: that doesn't change with the change is ratings cost.

You: RacerX Gullwing: how about rebates for deleting unused textures
Philip Linden: I'd LOVE that... as I mentioned earlier.
Philip Linden: we just need to build a tool to make it actually work.
Philip Linden: right now there is no way to quickly search the world
Philip Linden: to find whether something is anywhere out there.
Philip Linden: but yes we will ultimately do that.

You: Sam Rockwell: I have apartments Phil and I want to provide decent living with enough prims for each tenant to enjoy sl, with the intention of having it pay for the tier fee... it looks difficult at this point and breaking even on the money is a tough cookie
Philip Linden: I think that the rental business is very strong in SL,
Philip Linden: and will likely continue.
Philip Linden: If you mean that basic users will not be able to afford rent without
Philip Linden: the ratings stipends...
Philip Linden: well that may be true for some.
Philip Linden: But as I said yesterday... here is a statistic.
Philip Linden: There are about 2400 basic users affected by this change.
Philip Linden: The median ratings stipend they get is $75.
Philip Linden: So we are talking about a L$37 weekly change.
Philip Linden: I think that is not too bad.

You: Elle Pollack: Q: I trust you guys to not trade $L and $US internally, but I know some people are dubious. Can you think of some way to make that transparent, or is that already meant to be handled by the regular economic reports?
Philip Linden: Hmmm.... good issue.
Philip Linden: Well I can't think of how to do that in an auditable way...
Philip Linden: without giving away other folks privacy...
Philip Linden: like we can't publish the name of everyone who trades currency, for example.
Philip Linden: But I can tell you.... clearly this is a fundamental principle.
Philip Linden: we don't trade on the market.
Philip Linden: and won't without telling everyone what we are doing...
Philip Linden: like I said earlier...
Philip Linden: that is why we can't change L$ to $USD.

You: Jamie Otis: What is the rough population of SL? (active accounts)
Philip Linden: We are approaching 20K users.
Philip Linden: rapidly.

You: Doctor Bombay: A rumor is floating that you are considering taking a portion of stipend/bonus/whatever and pooling it to provide LL Event support.
You: Will you please address this AND couldn’t the "pittance" of rate money and upload fees be used instead?
Philip Linden: I asked a question about that at an event...
Philip Linden: because I wanted to understand opinion.
Philip Linden: I don't think that would be a majority desire,
Philip Linden: and so I do not think that it would make sense to do.
Philip Linden: But the folks I was talking to were largely supportive,
Philip Linden: which I found interesting.

You: Chase Rutherford: What are a few of the other solutions you considered other than the ones you implemented?
Philip Linden: hmm... good question.
Philip Linden: well we could have reduced basic stipends...
Philip Linden: a 40% or so reduction there would have been close to the effect of what we did.
Philip Linden: But we thought that the ratings bonuses and event support were of lower value to SL overall.

You: Laura Skye: question for Philip, u just said u are not trading, your trading on ebay
Philip Linden: We do not trade our currency anywhere.
Philip Linden: Not GOM or IGE or Ebay.
Philip Linden: If you are referring to auctioning the featured listings...
Philip Linden: in the find menu.
Philip Linden: that is different...
Philip Linden: I have posted about that...
Philip Linden: it is simply an experiment in how to give folks who don't have high dwell
Philip Linden: more uniform access to the finder.
Philip Linden: So that they can advertise SL content.
Philip Linden: Using an auction provider to sell the spots was like 1 hour to set up...
Philip Linden: our auction software won't do that kind of thing.
Philip Linden: I'd rather fix bugs that extend it for a test.

You: Musimba Yellowknife: I had read that the Lindens want the in game currency to stay balanced with the U.S. dollar, but the U.S. dollar is on decline and is expected to continue declining in value this year. Why link Linden dollars to U.S. dollars?
Philip Linden: Boy that is a profound point.
Philip Linden: I agree the decline in the US dollar is anomalous.
Philip Linden: We should base currency exchange on global markets...
Philip Linden: and shoot for aggregate stability I agree.
Philip Linden: We've got LOTS of users outside the US
Philip Linden: But the rate of change of US currency against Euro,
Philip Linden: for example,
Philip Linden: is pretty slow.
Philip Linden: So I think we are probably within the noise to follow it,
Philip Linden: relative to SL versus USD volatility.

You: Jamie Otis: and plans to give us a breakdown on where the 8 million in private investment is going in Linden Labs?
Philip Linden: Easy...
Philip Linden: R&D
Philip Linden: Hiring more people, fixing bugs,
Philip Linden: and doing stuff to make SL better experience.
Philip Linden: That is pretty much all.
Philip Linden: I don't have any other way I think I could use funds outside of improving SL.

You: Ed Baron: Q: what is the legal stance of people who are losing money and would like to take LL to court?
Philip Linden: We act as a provider of a service, with a currency.
Philip Linden: So there are risks you take on by doing things here.
Philip Linden: But I think they are very much like other service providers...
Philip Linden: hosting, etc.
Philip Linden: I think that is the right position, and a fair one.
Philip Linden: I've got time for one more question....
Philip Linden: Gotta go at 6, but will be back on later.

You: Jamie Otis: is it possible for you to give us a plan for 2005, key stages you hope to achieve this year?
Philip Linden: Well, roughly...
Philip Linden: I think we will have 2-3 major releases.
Philip Linden: On a schedule similar to that we've hit for 2004.
Philip Linden: We are still mainly focused this year on getting the tools in place
Philip Linden: for creating great content.
Philip Linden: So things like better physics,
Philip Linden: graphics,
Philip Linden: performance.
Philip Linden: We've given out more detailed plans for the near term releases.
Philip Linden: No time to repeat those right now.
Philip Linden: But thanks for the politeness and the time.
Philip Linden: Certainly big issues of late. Appreciate giving us a change to talk.