Something is rotten in the state of Battery Street

Alex Hayden carries an interesting blog post today. It appears that, for a limited time period, Linden Lab are offering “Starter Homes” to SL users.

No, not “Linden Homes”, available to Premium Members only, but “Starter Homes”, available to anyone who wants them.

The LL email on Starter Homes

For anyone who has chosen a Linden home, the e-mail will appear very familiar: an introductory graphic leading to a web page where you can select your home from a range of options or, if you prefer, an empty lot of land.

Options

The promotion actually started on April 19th, and runs for the month through until May 18th. So what are LL doing? Going into competition with themselves? Are these some kind of “next generation” Linden Home being offered on the basis that after 15 days you must up to Premium to keep yours?

No and no.

The truth is revealed in the offer small print:

Linden Lab is sponsoring the Start Home Program, which will be operated and supported by Anshe Chung Sims. You acknowledge that if you agree to participate in the Starter Home Program, in addition to the Linden Lab Terms of Service you also agree to be subject to the terms of service required by Anshe Chung sims. After 15 days you decide whether you want to keep your home or not. If you do want to keep it you will need to pay for it pursuant to the applicable terms of service. If you don’t want to keep it you won’t be billed for it.

Yup, Linden Lab are “sponsoring” ACS; which, when you look at it, is mind-boggling in itself – but I’ll refrain from digressing… I’ll also avoid re-treading ground Alex covers so well.

One cannot actually blame ACS for this per se – unless some form of unequal leverage was brought to bear on Linden Lab in order for the “sponsorship” to be initiated, as least.

The problem here is, as Alex points out, LL’s willingness to start playing favourites, and in the process, tilt the board in favour of one reseller.

Over the last couple of years, Linden Lab has been trying to repaint itself as a service provider. Well, this is all fair and good, but as Crap Mariner pointed out via Twitter, in the service provisioning business, one does not advantage one reseller over another. Yet that is precisely what LL are going here. Whether or not they opt to repeat the “offer” down the road, it still results in a very unpleasant taste in one’s mouth at the thought of the market being so blatantly manipulated.

Of course, LL may feel justified in doing so inasmuch as there is little their other resellers can do. Their power is limited, and their finances are almost completely locked-in to SL. Again, as Crap observes:

This has been pretty much an ace-in-the-hole for Linden Lab in many respects, and doubtless a comfort blanket for them when they do opt to start tinkering around with more than the technical aspects of their service. Which is not to say that at some point it won’t come back to bite them on their collective arse.

In his piece, Alex asks, “How can you justify sponsoring the Starter Home Program and yet not sponsor a collection of Sims so that the Annual SL Birthday Celebrations can take place?”

Well, the answer is simple. This sponsorship programme carries the promise / potential of financial gain to Linden Lab; providing sims for SLB doesn’t, period. If this scheme is successful, ACS may well end-up ordering additional regions to handle the demand. And if they do, who is to say other estates, their feathers ruffled, won’t be offered a piece of the action as well. As such, the Lab may again feel perfectly justified in poking their collective mitt into things. It doesn’t, however do much for the growing number of SL users who, like Alex, are feeling as if they are being treated as little more than a commodity ripe for the financial picking.

The offer also raises some wider questions as well, such as what prompted the deal in the first place?

  • Is it that estate owners are growing increasingly jittery over region losses, and have been demanding LL “do something” (and, however much we’d like it to be, simply “lowering tier” isn’t going to be seen as a “safe” option within the Lab). If so, this approach is still decidedly one-sided, unless offered month-on-month to other estates, which is hardly likely to happen
  • Is it that LL themselves are worried about the continuing decline in regions and, having seen that the “Land Sale” from last year failed to achieve long term benefits (although the immediate benefits cannot be denied), they are desperate to try something else in the hope of hitting upon a magic formula to recover “lost” revenue?
  • Or is it, again as Crap wryly observes, “merely” the case that “ACS may be squeezing Rod’s nuts”?

You decide.

There’s another aspect to this as well. A month ago, Rod Humble made a big play about talking community and getting back to the family / frontier “feel” of Second Life. In it, he said, “I will be kicking off another monthly roundtable (probably Monday) to chat about getting that family/frontier feel back with an eye to some area-like project,” [my emphasis]. Shortly thereafter, this promised “round table” morphed into “closed door” discussions. Now I may be doing Rod Humble a great disservice here in linking the two – and if I am, I’ll say here and now, I’ll have no hesitation in apologising openly – but, if this arrangement has anything whatsoever to do with developing “some area-like project”, then I’m fast losing faith in what is going on at Battery Street.

With thanks to Alex Hayden for his kind permission to re-use screen captures from his blog.

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40 thoughts on “Something is rotten in the state of Battery Street

  1. Volume discounts for your high roller resellers is a given in any industry, whether it’s an open rewards program or a hush hush contract/deal like Atlas was, but out-and-out directing people to a particular reseller tends to piss off the other resellers, who have seen higher prices, reduced concierge hours, cutbacks in community staff, and a lit of undelivered promises regarding tools to make things easier.

    To be blunt: Pathfinding don’t pay the motherfracking rent, Rod.

    One thing ACS can’t sell is turnkey community building. Those bonds develop over time, and all the marketing and buzzwords won’t turn a Quarter Pounder into a Porterhouse.

    Maybe we could grab up these Starter Homes en masse and make a flash birthday srties of builds out of them? Or does ACS AUP prohibit this? And would a violation of ACS AUP have any falliut beyond Anshe’s crew being annoyed at you?

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    1. Rubbish. The sky has been falling for the last 10 years. This is not a sign of anything save perhaps a misguided and poorly thought through collaboration between the Lab and a customer.

      I don’t have a problem with the Lab trying to sell me items from in world merchants. It’s a very under exploited route to market. I have a problem when that route to market isn’t clear and transparent for all merchants.

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      1. To me, the desperation seems all ACS’s rather than the Lab’s. This pick-a-partner trial is completely in character with LL’s estate practices since forever — have we so soon forgotten the MOTD Estate Ad trial, for example? — but it surely makes Anshe appear desperate to try even the most unpromising marketing approach.

        Still, this could be instructive, if we can figure out how it is being targeted. Do we know who is actually getting these offers?

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  2. If this is such an ace idea why didn’t they offer up empty Linden Homes on a 15 day trial? The other day I counted 17 empty homes on my patch. I’m sorry, but this whole thing stinks of favouritism and back room deals. I await Prok resurrecting the FIC and I think I shall have a fair amount of sympathy for the notion this time around.

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  3. Is this being advertised anywhere on the SL website? I’ve been asking around and as yet nobody I know has had this email. Those I have asked are not new signups though so has this offer only been pushed at new signups and kept hidden from the wider SL population?

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    1. I have no idea how LL handle e-mails. I did not receive anything myself; however, in the past I’ve received offers and e-mails that have passed others by – as happened recently when I reported on these pages about an e-mail I received from LL and several commented that they’d not seen hide nor hair of the e-mail themselves.

      I assume LL have some mechanism in place that somehow selects / filters recipients. Maybe it’s to limit response: only so many people are e-mailed a week. Really have no idea. Also have no idea if receipt of an e-mail on one offer somehow bars you from receipt of e-mails dealing with the next offer.

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      1. In my experience a bulk mailout from the Lab takes up to… well, somewhere around the 10-14 day mark before all of them get delivered. I’m not sure if there’s any particular ordering, but usually I get my copy of any bulk email about five days after the first reports of the emails are heard.

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        1. I’ve tended to wonder if there is a throttling process overall, as mentioned above. That said, there are still the instances where I’ve received something, others haven’t, and vice-versa. As we’re approaching the half-way mark in the offer, it’ll be interesting to see!

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        2. Many mass emailing companies that handle the delivery of these things for clients – the mail server – put restrictions on how many you can send per day and per year, as a part of the pricing structure and to prevent being caught up in the ‘can-spam’ anti-spam laws in the US.

          Some tell-tale signs that the emails use such a service will be looking at the URLs of links or images (for hosting, or for data to capture analytics), and any ‘contact info’ / subscription removal info.
          – you’re required by US law to put in -functional- links for unsubscribing, and real-life contact address:
          http://business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business

          LLs appears to be using ‘yesmail’ to handle their needs.
          – That is where any throttling that might exist will take place.

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    2. Hey, Sy, I just checked my 2nd-Gmail account, and I got one of the “Try a Starter Home in Second Life for 15 days!” emails on the 30th. (I had started a new avatar account to test the links that are on the SL-feed)

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        1. I’m really “not” trying to start a conspiracy theory, but I made an alt this morning and I now have the promo email sent to that new account. My main and old alts are yet to receive the email.

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          1. Interesting, I have a week-old account I created to check on the new Destination Islands (required after the last one was booted out of the Destination Island it was on, presumably the result of the sim having been taken off-line). So far, no e-mail received.

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        2. It makes no sense for Linden Lab to target this at established users – or even ones who have been around more than a few weeks, really. This looks to be about raising retention to me.

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  4. LL is failing in more areas than one. They can’t even enforce their own TOS or CS. While ACS is chosen for this new venture, I am sure they didn’t come out of a draw from a hat. LL is shooting itself in the foot and not with a six shooter but an automatic. The camel awaits another straw.

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  5. “Poorly thought out….”misguided”….”desperate”…all epithets that someone or other has applied to Linden Lab over the time I’ve been in SL. “Sly”…?? Now that’s a new one: since when have Linden Lab shown signs of having enough brain to be “sly”?

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    1. I used “sly” not so much as a denouncement, but because, as Tateru does point out in her comments that follow, this is something that can be slipped in, tried, and if it doesn’t work, quietly removed. Admittedly, and upon reflection, “cunning” might have been a more appropriate term – but that risks shades of being taken to mean I’m having a “Baldrick” poke at LL (as in “cunning plan”), which again wasn’t the intention :).

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  6. “Tateru Nino
    on May 3, 2012 at 11:45 said:
    It makes no sense for Linden Lab to target this at established users – or even ones who have been around more than a few weeks, really. This looks to be about raising retention to me.”

    Agree entirely with you Tateru and I don’t want to speculate too much in case the email lands in my inbox very soon, but if it is not being advertised on any SL websites and emails are only being sent to new signups then it only reinforces the notion that this a shady deal that neither LL or ACS want widely known. Did other estates know of this deal before it was announced?

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    1. If it was me doing it, I’d have picked exactly one estate-holder partner. Because the trial programme might be a success or a failure. Something you offer for X days, evaluate and then decide to keep or throw.

      If you had to coordinate with a *bunch* of estate holders, of all different sizes and foci – the complexity of having a short-lived trial programme would be so much that it would not be worth trialling it. Also, it’d *really* complicate your success metrics – it just wouldn’t be worth the effort.

      If it turned out to be a success with one estate partner, then it could (and should) be thrown open to a wider group of partners. If it was a failure – well, it can be killed with little-enough hair-pulling.

      There’s also the possibility that ACS approached the Lab with the idea, rather than the other way around. Anyone consider that?

      There’s costs involved in this programme – who is footing the bill?

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      1. Fair point on retention; that it is a pilot scheme did cross my mind. The involved costs are minimal, tho, I’d say. E-mails are eay to send out; ACS need staff on-hand – but don’t they anyway to deal with enquiries as people teleport in? Benefits on both sides would seem to outweigh the costs.

        Assuming people do go on to get a fair bite of the apple, good – although there is still a danger that the offer could be baised towards the larger estates, who aren’t necessarily feeling the pinch as much as others. That said, it’s easier to be an armchair critic than to offer-up alternatives, and in this instance, I’ve been precisely that.

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        1. I always try to work the angle of how and why would I do a thing, if it were me planning it. Would I do it the same way? Would I do it differently? And if so, what benefits would my way bring?

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          1. It’s a wise approach, and one I’ve generally tried to emulate, following your lead. In this case, I felt that there was more of a whiff to things; and while the piece did go through a couple of iterations, I still feel that the selection of partner, etc., does tend to put the wobble on good intentions on this, especially when at the same time we have things like this apparently going on.

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        2. Oooh, yes. The Lab does *not* respond well to people trying to alter the ranking of parcels in search results. Some of them see it as a banning offence, per the posting they made on it a couple years back.

          On the question of costs of this programme, however, let’s say… Oh, that a percentage of new users decide to take up the offer. Let’s call it 25%. So that’s 2,500 homes per day, minimum, on users that might not provide any ROI at all.

          Not cheap. Even at 3%, you’re still talking a floor value of 300 homes per day. Still not pocket change.

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          1. It’ll come down to how many remain after the 15-day trail (at least for ACS). They seem to be taking more of a punt on this than anyone, which does comes back to your question as to who approached whom? Pay-off clearly comes if a large percentage of those remain. That translates to new tier; while not offsetting initial costs per se, it does does amount to increased revenue.

            Flip side is, how many of those incoming via the offer are taking-up rental space that is otherwise already fallow within ACS (as opposed to “new” land having to be provisioned), and thus running at a loss?

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        3. One full sim, crammed to the gills is 128 x 512sqm plots, yes? Smart money says neither the Lab nor ACS is going to pack 128 homes onto a sim. What feels right to you? 80 perhaps?

          Change the math: Let’s assume just a 1% conversion rate (people taking up the offer)

          That’s a minimum of 1 and a quarter sims of housing per day (and possibly up to double that). Assuming nobody stays with the house longer than the 15 days, you get those parcels back in two weeks to recycle into the programme.

          So, assuming a 1% conversion rate (people taking up the offer) and a ZERO percent success rate (nobody keeping the house at the end of the 15 day trial period) the absolute MINIMUM provisioning for the programme is between 19 and 30 sims of housing.

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          1. Parcels are 1024 sq m with between 44-48 units per sim. Unclear if these are sims specifically purchased for the offer, or recycled / regrouped from within the ACS “pool”.

            ABOUT LAND for the parcels does read: “The Anshe Chung Sims team welcomes you to your free land trial home. Please don’t hesitate to IM Jasmine Chung, Judy Chung or any of our other avatars for help. Enjoy! :)” – but no further info

            Parcels appear to be freely available outside of the promo offer at a rate of L$399 (going on the vendor boards) – and direct payment is enabled. Visitors are referred to the ACS website, but there is no info there on the promo. I didn’t actually attempt to pay a board to see what would happen.

            All interesting stuff.

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    2. That’s an interesting change to the math then. Unless you’re expecting even less than the already alarmingly poor 1%/0% rates that I worked out, the minimum provisioning for the trial programme is 35-70 full regions.

      Plus, you’d have to be able to bring more sims online within hours if rates were substantively higher than that.

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      1. I did a very hurried count. Looks like around 70-90 regions, grouped in “islands”, a-la Linden Realms, comprising 8 housing regions ranged around 4 OpenSpace landscaped regions. Take-up is hard to judge, but at this point, half-way through the offer period, I’d say potentially on the low side of half of the total available parcels.

        ETA: Map was taking a VERY long time to load, so the numbers are rough-and-ready (other than “island” size), and based on overall available area & surrounding regions / land masses.

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        1. I’m guessing they planned for about a 1%/3% takeup rate then. Not exactly an optimistic forecast – though in practice it seems to be performing just a little below that.

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  7. This just highlights another reason why mainland is better for the grid.

    Lots of small customers – who can’t be an individual threat to LLs, so not only can those individuals not hold the company for ransom – but LLs would gain less by favoring one over another.

    When estate owners get so big they can eat LLs profits, and hold the entire rest of us hostage – that’s dangerous ground to be in.

    Anshe Chung might not be intentionally trying to do anything – but a simple sigh from a customer that big and the company has to come running or risk shutting down.

    Better for them to get as many of us as they can into mainland – something they have been doing of late… This is probably a reaction to the success of that; with this estate owner voicing a concern over losses to mainland that has now motivated the left hand of LLs to try and hack off the right hand.

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    1. Works out the same way, really, Pussycat. The tier system offers efficiencies to larger mainland holders, and makes it profitable for them to sublet. You might not get as much control, but you can still represent a significant economic force to the Lab’s bottom line.

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  8. I ran some figures.
    I am in Europe, so I have to pay tax on Premium Membership.
    For 1024 sq m, paying Premium for a year in advance, assuming 250 L$ per US$, and with the 300 L$ weekly stipend, I would be paying about 400 L$ per week
    For somebody in Europe, not wanting that long-term commitment, this deal makes a lot of sense.
    For somebody in the USA, they would still come out ahead on this deal, compared to the monthly Premium+Tier

    There are all the qualms about tying this to one Land Rental operation, but it might cost LL less than running, and supporting, more Linden Homes. Given how well LL informs new residents, I could almost sympathise with ACS over this. I spend time around a Resident-run help location, and I see what LL dumps on the grid.

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