Entitlement and the Consumerization of Second Life

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OK, Dusan, I get it.

People who “buy” stuff — or obtain it as a freebie — from “content creators” don’t actually own it. What we obtain instead is a license to use what amounts to a few lines of code that tells Linden Lab’s servers and/or our (and everyone else’s) viewers to accurately render that item in the manner, and to the purpose, for which it was created. I also get that in-world Copy permission does not grant permission to copy out-of-world (onto one’s hard drive) and rez it into another world. (I never didn’t get that.)

The simple fact is: no one but Linden Lab owns anything in Second Life.

3.3 Linden Lab retains ownership of the account and related data, regardless of intellectual property rights you may have in content you create or otherwise own.

You agree that even though you may retain certain copyright or other intellectual property rights with respect to Content you create while using the Service, you do not own the account you use to access the Service, nor do you own any data Linden Lab stores on Linden Lab servers (including without limitation any data representing or embodying any or all of your Content). Your intellectual property rights do not confer any rights of access to the Service or any rights to data stored by or on behalf of Linden Lab.
— Second Life Terms of Service, emphasis added

So, let’s talk about “entitlement”, shall we?

Under the current rules, and conditions enabled by at least one third-party viewer (Emerald), anyone who creates content is entitled to create a backup copy of it. Rez a prim, and you’re listed as its Creator, and the “legal” Export function creates a .xml file that describes how to render that prim in Second Life.

Question #1 — ToS 3.3 clearly states that you do not own the prim. Do you own the .xml file?

So, let’s say you use some 3D rendering software on your computer to create an object, then upload it into Second Life. By the Terms of Service quoted above, rezzing the object in Second Life automatically and irrevocably relinquishes your claim of ownership to any instances of the object in Second Life.

Question #2 — Do you own that .xml file?

The Terms of Service were written when the only virtual world that used Second Life code was Second Life. Now there’s OpenSim. Content creators are entitled to export copies of objects they created for use in Second Life, none of which they own, and import them to an OpenSim grid.

Question #3 — Who owns the object now?

Under the current rules, content creators are entitled to share content with other users of the service, with or without copy, modify and transfer permission. They are entitled to give them away for free, and they are equally entitled to demand consideration in the form of “Linden dollars”.

1.4 Second Life “currency” is a limited license right available for purchase or free distribution at Linden Lab’s discretion, and is not redeemable for monetary value from Linden Lab.

You acknowledge that the Service presently includes a component of in-world fictional currency (“Currency” or “Linden Dollars” or “L$”), which constitutes a limited license right to use a feature of our product when, as, and if allowed by Linden Lab. Linden Lab may charge fees for the right to use Linden Dollars, or may distribute Linden Dollars without charge, in its sole discretion. Regardless of terminology used,
Linden Dollars represent a limited license right governed solely under the terms of this Agreement, and are not redeemable for any sum of money or monetary value from Linden Lab at any time. You agree that Linden Lab has the absolute right to manage, regulate, control, modify and/or eliminate such Currency as it sees fit in its sole discretion, in any general or specific case, and that Linden Lab will have no liability to you based on its exercise of such right.

1.5 Second Life offers an exchange, called LindeX, for the trading of Linden Dollars, which uses the terms “buy” and “sell” to indicate the transfer of license rights to use Linden Dollars. Use and regulation of LindeX is at Linden Lab’s sole discretion.

The Service currently includes a component called “Currency Exchange” or “LindeX,” which refers to an aspect of the Service through which Linden Lab administers transactions among users for the purchase and sale of the licensed right to use Currency. Notwithstanding any other language or context to the contrary, as used in this Agreement and throughout the Service in the context of Currency transfer:
(a) the term “sell” means “to transfer for consideration to another user the licensed right to use Currency in accordance with the Terms of Service,” (b) the term “buy” means “to receive for consideration from another user the licensed right to use Currency in accordance with the Terms of Service,” (c) the terms “buyer,” “seller”, “sale” and “purchase” and similar terms have corresponding meanings to the root terms “buy” and “sell,” (d) “sell order” and similar terms mean a request from a user to Linden Lab to list Currency for sale on the Currency Exchange at a requested sale price, and (e) “buy order” and similar terms mean a request from a user for Linden Lab to match open sale listings with a requested purchase price and facilitate completion of the sale of Currency.

You agree and acknowledge that Linden Lab may deny any sell order or buy order individually or with respect to general volume or price limitations set by Linden Lab for any reason. Linden Lab may limit sellers or buyers to any group of users at any time. Linden Lab may halt, suspend, discontinue, or reverse any Currency Exchange transaction (whether proposed, pending or past) in cases of actual or suspected fraud, violations of other laws or regulations, or deliberate disruptions to or interference with the Service.
— Second Life Terms of Service, emphasis added

In short: Linden dollars are worthless. They’re like grocery store coupons, which grant the store a license to deduct a specified amount from the “manufacturer’s suggested retail price”, but have no real cash value in and of themselves. Nevertheless, you — Sir or Madame Content Creator, DJ, Host, Stripper, Escort, or other recipient of Linden dollars — are entitled to “cash out” by placing a sell order on the LindeX and receiving the going price in real-world currency for that transaction, minus the Lab’s fees. The rest of us are entitled to place a buy order on the LindeX and receive the going amount of L$ per real-world currency, minus the Lab’s fees.

Let’s look at what I bolded in ToS 1.5 again. What we instinctively believe to equal a real-world purchase, because of the use of common terms like buy, sell, creator, and owner without their common meanings — but reinforced by how content is listed in the Inventory! — is nothing of the sort. It is an exchange of licenses. “I give you license to use this amount of Linden dollars (essentially, to pass that license on to someone else), and you in exchange give me license to a copy of that code which renders in Second Life as… clothing, accessories, vehicles, houses, furniture, plants, sex toys, whatever.” Not only do you not own anything, you haven’t bought (or sold) anything.

Let’s not forget what I call the UnReal Estate market, either. No matter how large or small the “purchase” price you paid, you — Sir or Madame Land Baron — do not own the virtual land you pay tier on. You are, however, entitled to carve it up, rent or re-sell pieces of it, control who comes and goes and who may or may not rez objects on it — and you are entitled to make a profit and use that in the continual stream of license exchange that pretends to be buying and selling (including paying the monthly tier), or you can cash out.

You’re entitled, in ways that the vast majority of people in Second Life who do not make all their own clothing, attachments, and other falsely-assumed “possessions” are not. You do not own any of it, but you are entitled to gain from its distribution.

Caught on yet?

Mr. Writer got bent way out of his usual thoughtful and considerate shape by considering that what Botgirl blogged about here was a demand for Entitlement… and an unjustified one, at that. Yet he failed to mention any of the Entitlements granted to the sainted classes of Content Creators Sellers and Landlords I’ve listed above. In short:

“Life isn’t fair. Neither is Second Life. Shut up and get over it.”

The problem is: to an increasing number of Residents, Second Life is becoming increasingly less fair, and it is doing so in ways which are destroying its original uniqueness and appeal. The symptoms became clear when Mark Kingdon dropped some hype comparing SL to other “social networks”, and bellwether (some would say “stalking horse”) Hamlet Au began his occasional series on bringing SL to the mass market, and vice versa, with this editorial.

All of those Entitlements that favor the Content Sellers and Landlords Manipulators over their “customers” don’t exist out of the goodness of Linden Lab’s collective heart, and their nod-and-wink to copyright protection is merely a lure to creators who think they’re going to be safe from ripping. (By the way, have you noticed that the only people who scream for the cops over the “copybot” issue are the sellers of content?) No, those entitlements exist for the sole purpose of Linden Lab’s income.

Case in point: Linden Homes. Since that latest Entitlement program was announced, and even more so since the sample sims were opened to public inspection, dozens of bloggers and forumites have opined about them. Ironically, the very same Dusan Writer had this to say about it:

While Linden Lab is clearly focused on changing the new user experience, this is also leading to a de facto re-engineering of the way that land and other goods are purchased and will change the culture of Second Life. With more consumer-focused branding and lots of “buy” buttons everywhere, the Grid is moving towards a more packaged and more purchase-oriented environment.

What users learn when they go through the pain of buying their first parcel of land and trying to rez their first house also created benefits: more deeply understanding how SL works, and more inter-connections between people, as they ask each other for help, create real estate businesses oriented to new users, generally creating a sense of collaboration and sharing. However, the attrition that ALSO results from this, from frustrated newcomers not knowing how to get ’situated’ in the world and a wide and varying number of practices for doing so may be mitigated by the Lab’s focus on the user experience (at the expense of the existing culture). Whether the possible increase in users and home owners outweighs these changes remains to be seen – Second Life is clearly becoming more of a ‘packaged good’ and is losing some of that frontier feel, the one where we all had to just kind of stumble along and figure it out.
(emphasis added)

I just returned from a quick reconnoiter of the Nascera continent. Even before I teleported, the World Map showed me that, within each themed area, every sim’s layout is exactly the same… aesthetically awful, but useful to my purpose, which was to count parcels. Each of those sims contains an average of 50 (give or take some inaccuracy on my part). Even if every resident of a sim paid their Premium account at the discounted annual rate of U$D 72, that’s $6 x 50 = $300/month income to the Lab. If they pay monthly, income jumps to $500 per sim. Result: anywhere from $5 to $205 per region over what they get for the same area of Private Island, and who knows what percentage of that is already profit?

That’s 50 empty homes per sim… the furniture and decor sellers must be happy, right? But there you have the latest symptom of the consumerization of Second Life, replacing a self-created experience with a purchased one. Meanwhile, the Lab stands to reap additional transaction fees from Residents buying and selling L$.

“Our World – Our Bottom Line”

Don’t like it? Well, you can always go to OpenSim now… but you have to go naked, and Ruthed.

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5 responses to “Entitlement and the Consumerization of Second Life

  1. You still have no license to export content you did not create to your hard drive. Yet. As soon as there is viable intergrid teleport between grids that have econmomies and respect intellectual proprty laws and treaties then the game changes doesn't it. At that point “content Marketing” will shift to selling packaged export sets and everything turnsd “full permissions” anyway. Like content from Renderosity.

    But today the “other grids” are purported to not respect intellectual property laws & treaties. (Which is an indication of a severe lack of survivability given their lack of obeying laws and international treaties. But they can always change if they want to. Or face the legal liabilities related to no “Safe Harbor” later)

    BTW your blog forbids me making a backup of this comment as I am editing it as you have the edit copy/paste features disabled. You should be ashamed lol.

  2. All the OpenSim grid owners I've spoken to have expressed strong support for intellectual property rights, and the largest grids — such as OSGrid — have put systems in place to enforce copyright.

    Many smaller grid owners, setting up mini-grids for their schools and companies, are also concerned about IP rights. They wouldn't use stolen artwork or articles for their Websites, and they don't want to use stolen content to build out their grids — especially when getting legal content is straightforward enough (though it may cost a little extra to get OpenSim rights).

    When it comes to standalone grids run by individuals, there the situation is similar to independent bloggers — who knows what some of these guys are posting. But as long as these small guys stay small, it will be hard to enforce copyright — just as it is difficult to enforce copyright on a teenager's private iPod.

    Finally, third-party content distribution networks and those belonging to the largest grid operators (such as OSGrid's General Store and ReactionGrid's Outpost) all have procedures in place to take down illegal content.

    At least when it comes to the larger, more reputable grids, OpenSim isn't quite the wilderness that some people might think it is.

    — Maria Korolov
    Editor, Hypergrid Business (www.hypergridbusiness.com)

  3. wow Lalo! Very, very well written (switches to grown up writing for my response). I think you have well portrayed the “reality” of the changes by Linden as well as the virtual property issue.

    The issue of object ownership is very interesting and your view seems close to what I believe as well. It is all Linden's at the end of the day. Fair or not has nothing to do with it.

    This was made amply clear last year to my business partner, David Miller (subQuark.com), when he simply asked how to give proper attribution to Linden Lab for a college workbook he had been approached to author. He would be taking screen shots from our sims and include only those objects either made by me or by him. We both understand copyright and respect it. It took four months for Linden Lab to finally answer (and he knows two business people in person from the lab!).

    The answer was incredibly difficult to actually follow and ever hope of publishing a book (they wanted to review all screen shots and their context). If it took four months to get the first answer, just imagine getting 100+ screen shots reviewed!

    Within six hours of casually asking an OpenSim developer on his blog about copyright with OpenSim, David was given an answer – anything he made was his. End of story.

    You are spot on with the direction of Second Life, in my opinion, to a more consumer driven experience. The original pains of building your own house, as you indicated, indeed led to an appreciation for well built places (as well as higher prices for those well built objects).

    Even as a landowner (which you aptly point out is not ownership, just leasing) I am suffering. When I fisrt started, I was all starry-eyed and thought that taking the time to make pretty land would make a difference. All my parcels have public land between them thus allowing for landscaping and a prim bonus. I have several free social places, such as two lounges, an art gallery, and half a dozen smaller spots that are open to all Second Life residents. But it seems that Linden Lab does its best to squash a lot of business. Last year's Openspace price changing threw us for a loop and we converted 12 Openspace into full sims. This year's adult policy has also shaken our estate. Many non-US residents have difficulty being age-verified.

    The new XStreetSL (or is that SOL?) policy is affecting shop owners on my estate and that affects me.

    In light if all of this, I gladly head over to an OpenSim solution naked!

    It was a little overwhelming at first to have none of my tools and textures, but the ability to have more freedom is worth it. Of course, being on a hosted solution (http://reaciongrid.com) still means there are others at play. But as a white label reseller, it is simply a hosting agreement like any website reseller has. We own the rights to anything we create and can carry that over to our own box or many other places.

    Thank you Lalo for an erudite discussion, I enjoyed your well thought out post.

    *returns to normal tone – woohoo!* =D

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