The Freebie Issue Is A Symptom
Just The Facts
It’s been fascinating for me to watch the “debate” about “freebies” rage back and forth within the SL Blogsphere. Unfortunately, there is little substantive evidence or facts being cited by either side. Although a few would frame this debate in “socio-economic justice” terms, I believe most would agree that the center of this debate rests squarely within the realm of economics.
I’ve found almost all of those who are against freebies share one thing in common; they want/need to make money from their creations. The members of this group are diverse. Some are “starving students,” others are underemployed/unemployed persons trying to generate a second or even a first income, by leveraging skills that would require a degree, experience or mobility they don’t have, to make them employable in the “real world.” Many more are simply looking for ways to generate enough income to offset the cost of living as something other than a vagrant in SL.
There are many of these “Virtual Capitalists” who believe free / ultra-cheap items are a legitimate way to attract or reward customers. Yet I have never found a single one who could produce statistical evidence of the long-term positive impact freebies have on their sales volume or net profitability. The most common argument heard from this group in support of freebies is: “If I don’t give away free items, my prospects/customers will go to my competitors.”
My question to those who advocate giving away freebies to promote their brand or build customer loyalty is simple. If this strategy works so well, why don’t real world companies with hundreds of years of retail experience employ it as a standard retail business practice? It can be argued there are some “free” RW items that show up, but rarely without the requirement for an additional purchase, membership or some other revenue generating component for the retailer. Without hard data to back up their argument, those who promote freebies as a marketing tool, are likely doing so because of they either lack real world business experience or are allowing themselves to be driven more by peer pressure and competitive “lemmingism” than by a viable business plan based on a sound business model.
Those who advocate freebies as a way to “be nice to newbies” must either never have had children, now have spoiled children or live in France; the latter two conditions being “states” (pun intended) I have no desire to live in. Other than the “stigma” of dressing in the limited wardrobe offered by the Linden library, a stigma many Lindens themselves seem immune to, what makes people think newbies need a plethora of free stuff or that giving them this stuff makes SL a better place? Does it spur creativity or industry in new residents? Does it encourage them to register a payment method and invest further in the economy? Once again, when asked these questions, the proponents of freebies seem unable to produce any facts to support their position.
Augmentation v. Immersion
My observations are that the membership of the groups holding the two primary pro & con opinions, seem to closely parallel another two sets of user profiles; the immersionists / escapists and the augmentists. For those unfamiliar with these terms, as they apply to SL, I encourage you to read one of the original and IMNSHO best discussions of this called Augmentation vs. Immersion.
I admit my own involvement and focus in Virtual Worlds is that of an Augmentist. I have and will continue to participate in quasi-imersionist activities, such as flying, surfing, skydiving, etc., but my primary focus is the pursuit of ways to use the Virtual World environment as a business (money making) tool.
Unlike those interested in augmenting their incomes, many Immersionists in this debate have no financial interests/needs whatsoever. Most are stay-at-home parents with spouses paying the bills, academics with universities paying the bills, the socially challenged and retirees. They are more than willing to spend money & time buying, creating and blogging about virtual goods, to help them pass the time or generate a virtual sense of self worth, by making them feel young, attractive, sexy, important, etc.
Interestingly enough, both augmentists and immersionists who promote freebies have one thing in common, their primary reason for giving away free items is to draw attention to themselves. Unlike the questionable value of this as a business practice, there is no question that it does work as a social attention getter. Want proof? Look at the number of blog posts, Plurks and Tweets that are devoted to the latest freebie or freebie hunt.
Linden Lab’s Role
No objective discussion of freebies is complete without examining Linden Lab’s role in the debate. Fortunately or unfortunately, depending on your perspective, I believe the debate about freebies is inexorably tied to the presence of unlimited “free” user accounts.
Free accounts multiplied by freebies are the formula for problems. First, it creates an expectation that people can participate in the Second Life community without materially contributing to it. Second, “free” account inventories, stuffed with thousands of freebies, generate performance overhead and degradation that depreciates the SL experience for everyone.
Paid accounts, that included a reasonable $L stipend, would help resolve the freebie issue in two ways. They would create an immediate sense of vesting in the community, while the stipend would provide a compelling incentive to spend the included Lindens on any of the thousands of items resellers have to offer.
Does all this sound familiar? Well, it should. Linden Lab already offers Premium Memberships. Oddly enough they are only “promoted” as a tool for “enhanced” technical support and a requirement for buying mainland property. Most people, including myself see little value in them.
The argument that “free” accounts are necessary for people who “can’t afford” a paid account is specious. To use SL requires a fast computer and a broadband connection. People who have access to these things generally have at least some disposable income. Even the poorest student manages to come up with money for beer, movies, Starbucks, more beer, etc.