November 22, 2009

XStreet and me - a personal analysis

I have not yet made my mind up on the upcoming XStreet SL changes. I see where Linden Lab comes from with the announced changes, and I think this is not all bad. I also see where Linden Lab goes to with these changes, and I am not sure whether I like it. I heard many good arguments against the canges from residents and merchants. And I heard many good arguments for the changes, also from residents and merchants. What I am sure of is that the changes were certainly not a majority-wish, as the Lab wants us to believe. At least not a majority in the sense of the majority of people. Maybe a majority wish in terms of amounts sold...

In the process of making up my mind whether I am for or against the changes, I looked at my own XStreet SL listings. This has, in fact, been overdue, so that is a good thing that I now got forced to do it.

Regular Merchandise

The good news is - all of my items sell. Even the most expensive one - Plywood Man - sold 12 times this year, giving me 1508 L$ of revenue. Instead of the 5 L$ commission, there will be another 120 L$ per year to keep this item listed. However if I only sell 2 in the next year, I already make a small profit. Two other items, my Celtic Cross and my Dasher, are also in the "green zone" and will continue to generate a profit, even with the new charges. However the Lab will get 786 L$ share of those items (same amount of sales anticipated), instead of 182 L$ prior to the changes - so 604 L$ more for the Lab.

It gets critical with my 2-prim-couch. This items is based on a 5-prim freebie, which I trimmed down to look exactly the same but save 3 prims to clever prim parameter and texture repeat selection. I set that item at the more nominal price of 5 L$ and since I listed it back in the day 183 people thought these are 5 L$ well spent because it saved them 3 prims. Up to now, Linden Lab got no share of the sales of this couch. In the future they want 3 L$ for each sale and 10 L$ each month, so I need to sell 60 copies in order to break even. Unfortunately it only sold 53 times last year, and since it is not really stylish anymore, I will most likely delist it.

Promotional Items

The next two items are listed for 0 L$ - freebies. Those two items are actually a good example for promotional items as Linden Lab states. I do not give them away for free because I am such a nice person. I give them away for free to raise awareness of my in-world business and find new clients. Up to now, Linden Lab gave me free advertising - now they want me to pay for it. Of course I would have preferred to still have it for free, and I do not really buy the explanation that the running costs are so high. However 1188 L$ per year is easily affordable for my business.

There are two problems however:
  1. Freebie listings will not be searchable anymore and can not be put into suitable categories anymore - they go into a special freebie category. This makes it basically unusable for me. Potential clients find my Language Kiosk in the "Business -> Signs" subcategory. They will certainly not look in a freebie category. And those who will look in a freebie category, are usually not the ones requesting my services. If it is a promotional tool, and if I have to pay 1188 L$ per year to keep it listed, then don't give me a worse service than before!

  2. Even without the first item, I would not keep TWO items listed. Both have basically the same aim and effect, so I would only keep one of those. Sorry, LL, not 2 x 1188 L$ for you.
Another solution would be to set a price for those promotional items. If I set them at 1 L$ I can assign them to whatever subcategory I want. However I would still need to pay 3 L$ commission on them, so I lose 2 L$ per sale. With a projected amount of 200 sales a year the cost would be 12 * 10 L$ monthly fee + 200 * 2 L$ commission after sales = 520 L$ - or almost exactly 50% of the intended cost of a promotional item. Sounds like a no-brainer.

General Considerations

I mentioned in the beginning that I understand where Linden Lab comes from. XStreet SL is like the Wayback Machine for Second Life. There are thousands upon thousands of obscure items. Admittedly there are thousand upon thousand of outdated items like pre-sculpty-age shoes. The fact that listing items without cost was a blessing and a curse. There is a lot of - well - trash on Xstreet. There are countless grossly overpriced items. But also countless very good items, items from philantropes who give them away for free as community service, as well as items from content creators that never bothered with shops and just developed for fun. Many of those merchants have panicked in the meantime and pulled their stuff. Which is an immense loss - even from a istorical point of view.

A second consideration is that Second Life does not have an effective object search! The closest that comes to an object search in SL is in fact XStreet SL, exactly because of what I said in the last passage. To be honest, searching in XStreet is a pain, but at least you can do it.

How would I have done it?

Accepting the assumption that XStreet SL needed changes at all, there still would be things I had made better:
  1. Linden Lab claims that the changes were wanted by the majority of users. There are reports that this is somewhat of a euphemism. Fact is that those changes affect definitely way more merchants than got involved in the process. The proper way would have been to send a survey to all merchants on XStreet SL, and a second survey to all people who made at least one purchase in - say - the last 3 months on XStreet. This would be in my opinion the only way to get qualified feedback.
  2. One approach would have been to automatically disable items that have not sold in a certain amount of time (6 or maybe even 12 months). That way, the "clutter" (as LL calls it) would be gradually removed. Merchants could manually reenable those listings - and maybe this would be a place where a monthly fee would apply.
  3. A better distinction between promotional-freebies and philanthropic-freebies could be found. Someone whose whole XStreet inventory consists of 0 L$ items is certainly not promoting his regular merchandise with them. Someone who has 50 hairstyles on sale, and 50 associated demos is clearly promoting them, but is probably not in a position to pay 4950 L$ for all of them. Why not extend the functionality of XStreet with a "deliver demo" option? Maybe as charged-for option?
My bottom line

From my point of view it is not the end of the world as we know it. I can subscribe to some of the motivation behind it, but I think there would both have been better ways to get a true majority vote, as well as better ways to implement some changes.

I will not pull my items from XStreet SL, as it is still the major web platform. I will adjust my inventory to minimize cost and maximize effect - something every sensible merchant should do. Linden Lab will get more money from me - no way around that - but less than they probably thought they'd get.

I definitely got the motivation to seriously consider alternatives - but not to abandon XStreet SL. The alternatives will be used to widen my exposure and give additional revenue.

What is your take on the changes?
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