MURKETING

Immaterialism critiqued

Today the NYT has an item headlined “Virtual Goods May Be A Blip,” noting the sales of Facebook gifts and the like, and suggesting  that despite the surprising sales numbers, there are problems that may undermine growth in this category. “How fast do prices drop when such items are mass produced?” the item asks. “Companies will have to churn out different goods in limited editions just to keep users amused.”

And: “How long can a product with no real-world value stay useful? … There’s the chance that users will realize they’re paying something for nothing.”

All very rational — and like many rational analyses of consuemer behavior, almost certainlly inadequate. I’m not sure what to say about the “price drop” issue, since virtual goods are already incredibly cheap (and frequently “mass produced”), partly because production costs, as it were, are low.

On both the specific issue of variety and limited editions (already happpening) and the more general question of whether such goods have “real-world value” or represent “something for nothing,” see this April 29, 2009 Consumed.

Immaterialism (2): Some costs

So just I was mulling over the broad subject of immaterialism the other day, I got a note from reader Gladys S. pointing out an London Times story I’d missed that raises a flipside issue. By and large many people think of our many online activities as being largely cost-free — not just in the sense that much of the Web is free, but also in the sense that it seems harmless compared to real-world consumption that entails various ecological and other side effects.

But the article looks at how much carbon dioxide is emmitted by … Google searches.  (As you’ll see includes it includes a clarification after some pushback from Google. I don’t know enough to really comment, you’ll have to decide for yourself.) Nicholas Carr picked up on this, and while he was dubious of the article’s numbers, he does point out that computer use has plenty of real-world consequences, and it’s probably just fine with the Googles of the world if we don’t think about them:

If reducing energy consumption were the company’s top priority, it would launch a PR campaign to educate people about those implications. It would encourage us to be conscious of the time we spend online — and to try to reduce that time. It might even offer, perhaps as part of the Google toolbar, a little calculator that shows a running estimate of the grams of CO2 we emit during each Internet session. Or maybe it could put a little banner across its home page reading: “Is this search really necessary?”

This in turn reminded me of an earlier Carr post, from back in the heyday of Second Life hype, in which he suggested the massive power required to run that virtual world’s servers meant that the per-capita energy use of a typical avatar was about the same as a typical Brazilian. A comment to his post added that in terms of CO2 emissions, a typical avatar’s yearly output is “the equivalent of driving an SUV around 2,300 miles.” Again, I’ll leave it to you to judge the details of that assertion.

My point here is not to say that immaterialism is a horrible pox upon us all. I’m just noting some critiques which point out it is not as cost-free as it might feel.

Immaterialism

In a post back in November, I quoted a little from Robert J. Samuelson Newsweek article in which he more or less drew a link between American materialism, and American self-esteem (this in the context of  the economic downturn that at the time was still coming into full view).

An interesting comment on that post came from reader Jonathan, who essentially said that material goods had already been fading in significance: “Generations Y and X place more value on social capital in establishing their self-esteem, as in how many Facebook friends they’ve got, how their love lives are going, etc. … The Internet provides more opportunity for inexpensive socializing (meetups, parties, conversation).”

While I can think of ways to rebut, or at least question, that assertion, I think the essence of Jonathan’s point is pretty interesting, and it’s stuck with me. I’ve been intrigued by what I guess I’m going to call immaterialism for a while, and I do wonder if there’s a sub-plot here to the question of what sort of consumer culture eventually emerges from this recession.

Here’s some more fodder. I apologize in advance for the long post, but if  you have reactions I’d love to hear them.

Recently, Wired’s Underwire blog, in answering the hypothetical question, “what would you grab if you had just 20 minutes to save the objects in your home that mean the most to you,” replied: My USB drive. Obviously that answer has nothing to do with the  object, but rather with the immaterial data it stores.

Similarly, on a SXSW panel, Tim Brown of Ideo said something about (if I remember this right) the data on his laptop being more important than the physical laptop.

Another variation: A couple of times Consumed I’ve dealth with virtual goods — in this October 16, 2005, column on EverQuest, and this October 1, 2006 column about Second Life. And I’m certainly not the only person to write about that (non)stuff — there are whole books about people making and spending real money in virtual worlds.

And finally: A more recent Consumed dealt with iPhone apps, even silly ones, that consumers will spend money on and presumably value, creating another vibrant immaterial marketplace.

Now, none of that is exactly what Jonathan was talking about.

But … Let’s say you go along with the basic premise that much of the material-object-buying of recent years (decades) is partly explained by consumer desires for more abstract ideas such as individualism, or connection, or progress, or status, and the self-esteem that Samuelson references.

Can these various immaterial offerings serve a similar function? If so, does that have a  broad impact on consumer culture going forward, or does it just become another element of it? And how, in turn, does the recession affect our desires for immaterial goods — spending on stuff in virtual worlds, for instance?How does t

I return to virtual goods in part because I listened to a segment on DNA recently about an architect who has basically moved his practice to Second Life, creating “buildings” there for various clients. In that old EverQuest column, I noted argued that spending a few dollars on an (immaterial) Pristine Teak Strong Box isn’t that different from paying a few dollars extra for a (material) suitcase that happens to carry a luxury brand name: “Paying for the intangible is hardly exotic; most of us do it all the time.”

To take that another step: The immaterial object isn’t made in a dubious factory, and won’t end up in landfill. So maybe it’s even possible to argue that immaterialism channels consumer desires in ways that are, on some level, better.

Which isn’t to say there are no consequences (eco and otherwise) to our digital habits — more on that tomorrow. Because this is way too long.

For now, just sketching out these few thoughts, and curious if  you have any.

In The New York Times Mazine: Stardoll

DRESSING UP
It’s just like paper paper dolls — only digital, global, mercantile and branded.

In Consumed, head of Stardoll.com Mattias Miksche an answer to anyone made uncomfortable by commercialization in this girls’ world. “We have a list of 1,200 brands our users have asked us for,” he says, from aspirational names like Dior to quotidian ones like the Gap to “the most obscure Ukrainian jeans brand.”

Up next: the ability to design their own digital apparel — and, if they like, sell it.

Read the column in the February 17, 2008, issue of The New York Times Magazine, or right here.

Consumed archive is here, and FAQ is here. Consumed Facebook page is here.

Real and fake and imaginary and authentic

A couple of interesting things in this Metropolis slideshow on “The Unreal World.” For instance, while it’s no surprise that you can hang out at an H/M store in The Sims, I’m not sure what to make of the fact that “the latest edition of Sim City Societies challenges players to ­create a green society by using alternative energy sources.” Is it good news that we may be on our way to tackling global warming in an imaginary world?

Also: Herman Miller “now offers Second Life members a collection of virtually rendered authorized editions of some of its best-known pieces.” Big deal, right? But this is what I like: The company “will make most of these new designs available for free to users who purchased virtual knockoffs. … from unauthorized sellers.”

That’s fantastic! If you’re going to have a representation of Herman Miller chair in a virtual world, you better make sure it’s, um, authentic. Make sure all your fake things are the real thing!

And finally, Fabjectory, which makes physical representations of avatars, for a fee.

Best SL story ever

This Wall Street Journal story today is the best thing I’ve ever read about Second Life, and I’ve read a lot. Maybe I’ll say more about this later, but for now, here, from the story, is the quote of the week, from a woman whose husband spends hours a day “in world,” where his avatar recently married someone else:

“You try to talk to someone or bring them a drink,” she laments, “and they’ll be having sex with a cartoon.”

Virtual data

Long before the great journalistic pile-on about Second Life (which of course I participated in), there was already longstanding interest in, study of, and journalistic pile-ons related to the spending of real money in other virtual worlds. I participated in that, too: Here’s an October 2005 Consumed pegged to Sony’s capitulation to such economies in the form of a venture called Station Exchange. I bring this up because in a recent report summarized here by CNet:

Sony Online Entertainment has concluded that so-called real-money trades can be good for both gamers and publishers if handled at controlled locations such as Sony’s own Station Exchange, a 1-year-old experiment to make transactions of virtual goods for real money a direct part of EverQuest II rather than an illicit activity.

That sounds like a somewhat self-serving conclusion for Sony, I suppose, but even alpha virtual worlds thinker Edward Castronova seems pleased that the study was done: “We’ve never had reliable data on this phenomenon at all.” CNnet continues:

During the last year, Station Exchange ran on two of more than 30 EverQuest II servers, allowing players to conduct so-called game asset transactions for real money. Sony Online earned $274,083 from its listing fees and commissions on the 51,680 transactions conducted in the first year. While that’s hardly a fortune, it cost Sony Online almost nothing to run the service.

Julian Dibbell, author of Play Money: Or How I Quit My Day Job and Made Millions Trading Virtual Loot, is also quoted.

Also: Castronova’s Synthetic World News passes along the Sony press release.

Murk looks at art

So I couldn’t make it to the “Photographs from the New World” opening at jen bekman the other night. But my trusty avatard Murk Story did make it to the version that popped up in Second Life. (See Murk’s prior (thoroughly lame) “adventures” here and here. Actually on second thought, don’t bother.)

After arriving, I thought I’d take a few steps back and take a picture of the gallery. Unfortunately, it was on the edge of a small cliff, and Murk fell off. What an idiot! It took him longer than it should have to levitate back to the proper place, but he finally did. He was rewarded by having the longest Second Life conversation he’s ever had — with Jen Bekman’s avatar!

Read more

The business of Second Life (cont’d)

More random notes regarding Second Life, which continues to draw lots of coverage:

+ Caliandris Pendragon, writing on Second Life Insider, questions the widespread assumption that Second Life is dominated by young people:

My experience of having many friends and acquaintances in SL is that the minority of them are under 30. … I work as a mentor and the incoming avatars must be a fairly random bunch, and I have met a substantial proportion of my friends that way. They aren’t all 19. By a long chalk.

+ More on that, and other thoughts on doing business in Second Life, here.

+ Also on the subject of doing business in Second Life, and focusing in particular on competition from real-world brands/companies: Joystiq argues that “Second Life’s denizens are concerned that the entrance of big business into the world will drive them out. They’re right to be concerned. Their businesses are as at risk as the local bookseller’s business before Barnes & Noble comes to town.”

Akela Talamasca counters such fears may be overblown, because: a) many SL “residents” don’t want their world “tainted by commercialism from RL;” b) instant travel makes real estate less critical (at least I think this is the point being made); and c) “It’s entirely possible that a preexisting SL store could create or emulate a style of clothing designed by a RL store. Therefore there is no material difference between a white t-shirt made by The Gap and one made by Mistress Midnight. What matters then is which one costs less; that is the one the average user will buy.”

Regarding c) — I’d be interested in the intellectual property fallout if a Second Life resident started doing virtual knockoffs of real-world clothes. Once you get beyond white T shirts or other commodities, things get more complicated. Also: In those cases where it really does come down to a simple matter of cost between something made by a real world company, and something made by a Second Life entrepreneur, real world companies have huge advantages.

Here’s a recent Business Week article on Toyota’s SL efforts. Originally the company was going to simply give away cars, since for them this is all just marketing anyway. Realizing that this sort of tactic pisses off the local entrepreneurs, they’re now selling cars for the going rate.
+ Reuters has launched an SL news site.

+ Long Tail Guy Chris Anderson did an event in Second Life. I don’t see what’s good — even for somebody selling his book — about having an avatar that looks like your real-world self.

+ Here’s a pretty good Second Life Herald bit complaining about SL looking too much like RL, thanks largely to marketing efforts (and journalists, I suppose).

+ And finally, here’s another Second Life Herald piece, more serious in tone, about the commercial drift of SL, and what it means to the residents. Here’s what I think is the most interesting passage:

In the Game of Second Life, the losers will be all those homemakers in New Jersey or part-time Wal-Mart workers in Wisconsin or security guards in North Carolina who were making up a storm of content, making a near-living or a substantial amount of money with either content creation, club management, or rentals. There will be less need for them now — they played their roles as early adapters, bug-testers, and server-load-tests, and now they need to retire.

Something to do in NYC

Tomorrow night, November 1:

A Smidge More Skoopf

Although I laid off writing about Second Life on this site for a while — basically until my Second Life Consumed came out — I have continued to make forays there from time to time, both as research and as a way to maintain an intense state of denial about real-world obligations. And I’ll keep doing that in the future, but meanwhile here are a few further notes related to the column.

At one point I did actually buy a pair of the Skoopf Ultra Roller Skates that I wrote about. That’s right, bought em with my own Linden dollars — no comps!

Also, after the column had gone to press, I read about this Skoopf machinima ad, which I promptly visited and checked out.

Finally, to back up the column’s point about in-world brands, here’s a snapshot of some “outdoor” advertising in Second Life:

Selling In a New World

In Consumed: Skoopf Ultra Roller Skates: One example of how a brand catches on in a nonexistent world.

Sometimes this life seems so cluttered with marketing and sales pitches that it’s enough to make you want to flee to another world. And you can. A second life awaits in one of the many increasingly popular online worlds, including one called Second Life. Inhabited by the alter egos of a few hundred thousand users, Second Life is not the most popular of these online habitats, but lately it has been attracting — yes — marketers. Toyota, Starwood Hotels and a variety of music and book companies have begun branding efforts in Second Life; the Virginia politician Mark Warner even gave an interview there recently. Longtime users like Gareth Lancaster have been expecting this. What’s not as clear is how well the new arrivals understand that there are already plenty of successful brands in this other world. Brands like Gareth Lancaster’s.

To use Second Life terminology, Skoopf is strictly an “in world” brand, not a carry-over from “RL” (real life). It was founded by Lancaster’s virtual-world avatar, Moopf Murray, a Second Life resident since January 2004. One of Lancaster-Murray’s products is the Skoopf Ultra Roller Skate, available in-world for about 50 Linden dollars. (That’s the Second Life currency; one U.S. dollar is worth about 250 Lindens.) Lancaster says he has sold about 50,000 pairs. …

Continue reading at the NYT Magazine site via this no-registration-required link.

Related links: Moopf; Second Life Herald account of Mark Warner’s Second Life appearance; about Starwood’s in-world project; about Toyota/Scion’s Second Life marketing.

Politics of Second Life

I think my favorite Second Life writer is Pixeleen Mistral. Read her (I guess it’s her) amusing coverage of politician Mark Warner stumping in the virtual world here. Some excerpts:

Second Life avatar Mark Warner today shocked the metaverse by disclosing his RL identity as Mark Warner — the former Governor of Virginia….

I tried to strike up a conversation with the Mark Warner avatar and got no response. I felt unsettled. A politician that won’t talk is like no politician I have ever seen. Could it be that this avatar was nothing more than an SL “action figure”? ….
More interesting than the interview itself was the scene backstage before the interview, where the Millions of Us handlers put the governor through his paces, practicing waves, helping him keep his feet on the ground and apparently adjusting the size of the avatar as well. He sure looked a lot taller once he was on stage, but maybe it was just the hardware lighting. Perhaps the best RL use of SL for politics going forward will be in producing inexpensive machinima-based political attack ads. This would help create a market for lifelike G.W. Bush and Hillary Clinton avatar costumes, with obvious benefits for SL content creators….

What is it about Second Life?

I thought I’d pass along this Washington Post story about Second Life. It mentions Suzanne Vega’s performance in that virtual world, and U2’s as well, and Regina Spektor’s. Duran Duran is coming soon, etc.

Marketing and record label executives say Web sites that put users into video-game-like virtual worlds are a unique way to reach out to audiences, who are increasingly spending their time and money on the computer instead of at concerts and music stores.

What is it about Second Life? Why is everybody suddenly interested in it? Every marketer, I mean. Aside from all the music-related stuff, there’s the previously mentioned American Apparel store, and Starwood hotels has something going on, and Second Life has been written about in Business Week and the Harvard Business Review, and various marketing blogs, it just seems to be a big marketer pile-on right now. Again: What is it about Second Life? Is it that, as a virtual world, it’s easier to sort of grasp than the more fantasy-oriented World of Warcraft-ish alternatives? Is it that the internal culture of Second Life seems more entrepreneurial? Something else?

Meanwhile, here’s an interesting interview with Second Life Creator Philip Rosedale, conducted by Andrew Keen, who seems pretty interesting himself. But check out some of Rosedale’s comments, where he hints at just how big a deal he thinks Second Life could be:

I think that when you talk about Second Life and you think about what’s making Second Life work today I think you actually can look back at eBay you know as an example of the community and the commerce aspects that are — and then the Internet itself, you know — that are so key to getting things like this to take off.

Partial answer to the question of whether Second Life is “a game,” per se:

It is always the nature of new mediums–instant messaging, the Internet itself, electronic mail–those new mediums are always used initially for play.

Partial answer to a question comparing the numbers of people registered to use Second Life vs. the number of people who visit certain Web sites:

Second Life is a much more significant–requires a more significant commitment of time right now to understand. Again this is exactly like using Mosaic in 1994.

Those are all pretty aggressive comparison points. Is this what’s going on, marketers agree with this stuff? Or are they just trying to impress their clients by knowing about yet another non Tivo-able platform?

Meanwhile…

I admit it: I haven’t been spending very much time in Second Life. I’ve visited a little, and I actually made my first consumer purchase with Linden currency the other day, but more about that later. The point is I clearly haven’t been paying enough attention, because the virtual store that got me interested in Second Life in the first place — the American Apparel “in world” location — was “attacked” earlier this month.

The attackers were members of The Second Life Liberation Army. Here’s what they say about their action on or about August 11:

Following the lack of any progress towards introducting citizens voting rights to Second Life the SLLA began in-world military operations.

The SLLA selected as its first target the American Apparel Store in SL. Volunteers from the SLLA have been posted to the store and are preventing SL residents from buying any goods from this vendor.

The SLLA has no complaint with American Apparel but is seeking to introduce voting rights to Second Life.

Hunh. Okay. Well, I don’t know anything about the underlying issue here, but of course I was interested. So, just now, sent my avatard, Murk Story, over to the store and, once again, he found himself all alone on the island. So I had to resort to looking for other people’s accounts of what went down. –> Read more