Saturday, November 21, 2009

Some proof of how XStreetSL's listing fees are anti-competitive

I just stumbled onto Massively's latest article covering the XStreetSL listing tax announcement, and I found a revelation in the comments, courtesy of Imprudence developer Jacek Antonelli: By XStreetSL's own rules, they are engaging in anti-competitive practices. To wit:

  • Anti-Competitive or Abusive Behavior. Examples include, but are not limited to:

    • inflating prices on Xstreet SL compared to in-world or other e-commerce sites,
    • hostile reviews or comments on a competing merchant's items, and
    • item listings which are abusive against another merchant or their products.

    Okay, let's apply these rules when the listing fees kick in, particularly for freebies. You list a freebie, and get hit with a $L99 fee. How do you compensate for that? Assuming it will actually remain a good seller, you adjust the price to, say $L4, which subsequently lowers the fee to L$10. You then decide to note in the listing "this item is free if purchased at my store in-world". Guess what? You just violated XStreetSL's rules and if caught the listing will be de-activated until you either change the XStreetSL price to match the in-world price of $L0(thereby incurring the $L99 tax again) or change the in-world price to match the XStreetSL price(effectively making the freebie "free no more").

    So where is XStreetSL itself violating it's own rules? Look more closely at the above scenario, and extend it out by adding that the merchant has also listed the item on other marketplaces that do not have listing taxes. According to XStreetSL's rules now, the merchant must also bump up the price on the other sites to maintain the XStreetSL listing. So XStreetSL is, in effect, using the listing taxes in combination with it's own rules to extend it's reach beyond it's own marketplace to their competitors. That sounds pretty anti-competitive, yes? Monopolistic, even.

    So now the merchant only has two choices: either grudgingly comply with XStreetSL and make the freebie a non-freebie everywhere, or de-list and remove the freebie item from the XStreetSL marketplace forever in order to preserve the merchants' freedom to price as he/she fits.

    Oh, and lest you think this is all just bitching about "paying the equivalent of a nickel more", take a look at this breakdown of how the listing taxes build up for one merchant and tell me if it's still peanuts.

    Wednesday, November 18, 2009

    The New XStreetSL "listing taxes": WTF are the Lindens smoking today?

    Today the Lindens delivered a swift kick in the stones to both Second Life Mentors and XStreetSL merchants.

    First, they are going to disband the Second Life Mentor Volunteer Program. Taking the long view on the move would seem it's not too bad as it won't affect the ability to create and run volunteer groups in-world, but from a PR standpoint it's a spit in the face to the volunteer community, no matter how much the announcement is sugar-coated.

    But the really big Linden blunder announced today finally exposes the real reason behind the merchant survey Pink Linden recently sent out: They want to further tax residents for use of XStreet and pander to only high-volume merchants.

    Don't let the "it's just to manage freebies" lie fool you. All listings will be charged a monthly tax(and it is a tax). This will effectively kill, not "manage" freebies on XStreet and lock out residents who previously used XStreet as a way to sell inexpensive products or give away creations as a gift to the Second Life community. It may also wind up screwing over shoppers too, as merchants who choose to live with the listing taxes may simply bump up prices to cover it.

    For me, this means that I would wind up paying XStreet L$490/month for all my non-freebies and $L198/month for my two freebies. That comes out to $L688/month + the already existing 5% commissions. And let's factor in that my most expensive listing is only L$175 but rarely sells and I find out that a pretty big chunk of sales gets gobbled up by XStreetSL "listing taxes". So what will I do?

    The Silver Lining

    First, I will remove every single listing I have on XStreet, as doing business on it has now become untenable. Only the big business merchants can play on XStreet, I get that now.

    After I remove my listings, I'll save my products in an inventory folder, trash my magic box and XStreet merchant vendor signs, and only list my products on meta-LIFE.They don't charge for listing freebies, and have a great vendor branding system to promote your business with(also free). I may look into others like and Apez(even though the site design of it is beyond ugly).

    From the discussion thread, it seems that a majority of other merchants will follow suit, and hopefully shoppers as well.

    Goodbye XStreetSL, it was a great run:

    Update: I got word that there have been at least 3,000 de-listings from the Apparel section alone on XStreetSL in less than 24 hours. The income loss from these de-listings are most likely very significant. While other section de-listings haven't been quantified yet, it's safe to say that this is one of the biggest disasters the Lab has pulled on us.

    Monday, November 16, 2009

    The Spectrum of Open Source Viewers

    The other day, Dale Innis posted a piece about the leaked Viewer 2.0 testing comments and how it relates to third-party viewers. A good read for sure, but what got my brain neurons firing off was from a part of a comment in a humorous response post from Adric Antfarm, about third-party viewers and Prokofy Neva's views on them: "The truth is in the middle. They are neither the savior you claim or the devil she does."

    I was going to put up a comment on Adric's blog responding to the statement, but it got too TL;DR-ish, so I'll put my thoughts down below(don't worry, I'll try to keep it concise and brief).

    I think the answer isn't in the middle, but rather that the answer is all three due to the fact that there are viewers that fit in each category. A spectrum, if you will. For example, let's look at viewers like Hippo, Imprudence, Meerkat and Snowglobe. The first three have third-party grid login management far superior to the official viewer's clunky "--loginuri=" command-line method. Imprudence and Meerkat have legitimate object backup capability(creator or full-perm only). Snowglobe recently gained text chat translation, Open Grid Protocol login support, and LLMedia API support(my favorite feature). These viewers, as well as some special viewers like omviewer-light and are clearly beneficial to the metaverse community as a whole and should be held up as excellent examples of open source community at work.

    Then there's the undeniably malicious viewers. First it was Copybot, now we have an unholy trinity of Cryolife, Thuglyfe and Neillife. All three are at their core a continuation of CopyBot's malicious intent(copy objects with no regard for the Second Life permissions system). Thuglyfe goes a step further and includes features designed to avoid parcel and estate bans. These are the kinds of viewers, open source or not, that should be fought against vigilantly.

    And currently straddling the middle of the spectrum is Emerald, the most popular but controversial third-party viewer(Disclaimer: I have used Emerald, but as of late I have been using Snowglobe and Imprudence instead). There are so many cool features of Emerald I can't list them without turning this paragraph into TL;DR, so I'll go straight to some of the controversial features. First there's de-friending notification. It's okay in SL to de-friend someone and letting it pass quietly. Getting a notification that you've been de-friended is a quick way to cause drama and grief. Showing real online status and avatar keys in profiles can also be griefing-enablers.

    Also the past activities of some Emerald developers don't help their viewer. However, the Emerald developers seem to be willing to work with Linden Lab on viewer policy, and they are now keen on combating malicious Emerald derivatives such as Neillife, so the jury is still out on Emerald. It can go either way.

    So to either wholly allow all viewers or condemn them as Prok does are completely irresponsible and one-sided views. It will lead to either rampant copyright infringement and crime or feature stagnation, greatly harming the value of SL. A balanced view of the spectrum, however, will ensure that Second Life and it's derivatives will continue to succeed for a very long time.