intellectual property and ingenuity in second life // global capitalism in second life and the pride of big business
With these changes in place, Linden Lab positioned Second Life to be an undeniable platform for entrepreneurship and new methods of business. In January 2004, the first private island available in Second Life was auctioned and sold for L$1,200 to an avatar named Fizik Bakersville, who subsequently announced that he represented a "London- and Chicago-based Innovation and Branding Company" interested in exploring the commercial opportunities previously untapped in Second Life. Within a day, the island was overrun with Residents taking part in the "first virtual anti-globalization protest." Since the very beginning tension has existed between large corporations using Second Life as a business platform and "grassroots content creators" looking to create and sell community oriented goods. On a general level, outside corporations were both "unwanted and exploitative" with an assumed potential for cluttering of bandwidth and marginalization of "Mom and Pop" content creators.
Corporations came nonetheless. With differing motivations, companies began to establish themselves within Second Life in early 2006, hiring in-world architects to build up their islands for optimum economic potential. These meta-verse development companies made a fortune, amassing millions of dollars from companies like Coca-Cola, Reuteters, and Dell by the end of 2006. A variety of major publications touted Second Life as the newest frontier in online business - Bussiness Week, Forbes, WIRED, the New York Times, and an undeniably long list of others portrayed Second Life as both untapped and highly populous. Fearful they miss out on a virtual goldmine, corporations hastily set themselves up in-world, eagerly awaiting the massive amounts of money that would surely flow their way. While the investment was large, the returns were inversely low, having as Au claims, "next to no[]" impact on the economic or social landscape of Second Life. Nearly all of the most popular (i.e. most trafficked) locales on Second Life are Resident-run, leaving the corporate sites, although beautifully designed, virtual ghost towns.
This is not to say that money is not exchanged in Second Life - indeed, "hundreds of millions of dollars change hands every day", it is just that this is most often done between Residents. Tristan Louis, a programmer at HSBC calculated that on average Residents were spending the equivalent of $50 to $60 a week, making Second Life at the very least an active economy, if not a promising one. Companies weren't categorically revolted against (although some were), but rather were paid relatively little attention as Residents chose to spend their capital on products by those who understood their wants and needs far better, their fellow Residents.
Au claims that this failure of big business to capitalize on the budding Second Life economy has to do with three distinct points: the use of teleporting in-world, area popularity, and most importantly lack of creativity and imagination on the part of corporations. Since the beginning of Second Life, Residents have been able to teleport where they desire without having to see anything else, unless they wanted to. This means that once a Resident knows where they would like to go, there is no need for them to trudge through any sort of common space that would be traditionally ripe for advertising. In addition, most corporate islands were secluded on to themselves. While this allowed for greater control over marketing and message, it meant marketers had to figure out a way to have Residents "voluntarily dive into their ad and stay long enough for meaningful bran immersion." In terms of geographic popularity, it is a fairly simple equation - Second Life is a social system and as such, the more Residents in any given area, the more enticing it is for other Residents to teleport to that location. Most importantly, companies lacked the ingenuity that was thriving amongst Residents. Whereas those within Second Life were experimenting with the new and exciting, companies came in and attempted to market a digitized replication of their meatspace wares, which more often than not, were "boring, banal, and unimaginative."
As many foresaw, 'the backlash' was inevitable. With such high expectations so grossly underachieved, corporations were frustrated and looking for an answer to what went wrong. The first major voice to lead the dissent backwards was Clay Shirky, professor of New Media at New York University's Graduate Interactive Telecommunications Program (ITP) who explicitly studies the social and economic impact of Internet technologies. On December 12, 2006, Shirky released a damming account of what he perceived to be questionable numbers on the behalf of Linden Lab in relation to their Resident count. Shirky rightfully points out that at the time, Linden Lab's method to account for their Resident number was imperfect at best - Linden Lab's "definition of "recently logged in" includes everyone in the last 60 days, even though the industry standard for reporting unique users is 30 days", making the actual number of users online hard to determine . This, combined with knowledge that many users had multiple accounts and avatars, led Shriky to believe that Second Life's population numbers were grossly deceiving.
Shirky raises a valid point in chastising Linden Lab's process for counting Residents as it is inherently vague in methodology. With this said, the discourse that followed Shirky's initial claim harped upon his work with the same blindness that had led periodicals to outright claims of Second Life as a commercial wonderland. WIRED published a particularly negative critque titled "How Madison Avenue Is Wasting Millions on a Deserted Second Life", with the headline reading "Lonely Planet". The myth had been solidified - there was 'no one in Second Life'. More accurately, there was no one (or close to no one) in Second Life interested in the beacons of global capitalism.
Even this understanding, that Residents were on Second Life and just not in corporate areas, misses a greater point. In a post on the metaverse-centric blog Terra Nova, Thomas Malaby takes a stance against this reliance on numbers, standing up for what he sees as a resistance in the social sciences to find 'anecdotal research' valid. By relying on numbers, Malaby claims, we position ourselves to ignore other valid forms of research, particularly that which relies on single interactions with community members. Malaby furthers his argument in claiming, "numbers say nothing without the ability to interpret them provided by other kinds of interpretive research", arguing against generalizations based solely on statistics . From these anecdotes, one can glean an understanding of the culture they are attempting to understand far better than by simply analyzing figures. Shirky himself stated that "any claim about Second Life derived from a count of Residents is not to be taken seriously, and anyone making claims about Second Life based on those figures is to be regarded with skepticism" . While certainly referring to claims of Second Life as a fruitful business environment, the inverse validation rings true as well. Journalists and business consultants relied too heavily on what was now seen as a lack of Residents. Rather than focus on what Residents were doing - interacting and exchanging capital with one another on a consistent and increasing level - big business sought refuge for their failed attempts in the same failed judgment that led them to Second Life in the first place.
In an interesting turn, Au points to a particularly illuminating example of where big business got it right in Second Life in his discussion of L'Oreal's marketing within the metaverse. Unlike its competitors, who ignored the nuances of community that developed in Second Life, L'Orreal chose to market their brnad through a preestablished success, UK studio Rezzable's inworld playground 'Greenies'. Greenies focused on games and exploration, creating a platform that was enjoyable for Residents to interact with. A little over half a year after its launch, Greenies had seen over 100,000 unique visitors, an impressive number to say the least. L'Orreal worked with Rezzable to "subtly and playfully" embed its products with the Greenie universe, resulting in thousands of L'Orreal products purchased in the space . Rather than follow the traditional model of "creating and launching a SL site fully branded with the real world advertiser's logos and trademarks", L'Orreal cleverly engaged with the Second Life community and reaped the subsequent rewards . What the future holds for big business in Second Life is certainly uncertain, but it is this type of understanding of the culture inside metaverses that is invaluable to anyone attempting to engage with Residents therein, business or otherwise.