Draxtor & Jo discuss the recent tier & fee changes

[Jo Yardley]

Listen to Drax and I discussing the recent tier & fee changes in SL;

https://draxfiles.com/2019/06/10/show-220-sl-freedom-is-not-free-should-it-be/

[belindacarson]

no thanks.

[Blush Bravin]

I enjoyed it.

It is kind of bugging me though how Jo kept saying they have doubled the processing fee, which is true, but why not mention that fact that the fee was really quite low to begin with, only 2.5%, so doubling it to 5% is indeed doubling, but it's still a very fair fee, IMO.

[Ingrid Ingersoll]

ugh.

[Selene Gregoire]

10 hours ago, Jo Yardley said:

Listen to Drax and I discussing the recent tier & fee changes in SL;

https://draxfiles.com/2019/06/10/show-220-sl-freedom-is-not-free-should-it-be/

I can't understand what is being said without CC. 

[Luna Bliss]

2 hours ago, Blush Bravin said:

It is kind of bugging me though how Jo kept saying they have doubled the processing fee, which is true, but why not mention that fact that the fee was really quite low to begin with, only 2.5%, so doubling it to 5% is indeed doubling, but it's still a very fair fee, IMO.

One could also mention that it's gone up many times in a short period of time, that a pattern has formed, and there's every indication that the fee will continue to rise..

[LittleMe Jewell]

Wouldn't LL have to have a PayPal Business account in order to give the rest of us money via PayPal?  In order to transfer money from a PayPal account to another, the sender typically pays fees to PayPal. For payments to US PayPal accounts, the fee might be nothing or it might be 2.9% plus $0.30 per transaction depending on how the source PayPal account is funded.  For payments to non-US PayPal accounts, it is a minimum of 5% and possibly more depending on how the source PayPal account is funded.

It is possible that LL did stats of how much they pay to US and non-US folks and the 5% is a solid average.  Everyone thinks that LL is being mean or greedy or whatever.  Did anyone stop to think about how much PayPal charges for services.  Maybe folks should be mad at PayPal for constantly raising their fees -- the most recent of which just happened near the end of last month.

Edited June 11, 2019 by LittleMe Jewell

[Blush Bravin]

50 minutes ago, Luna Bliss said:

One could also mention that it's gone up many times in a short period of time, that a pattern has formed, and there's every indication that the fee will continue to rise..

The fact that it's gone up many times in a short period just means it was stupidly low before they started raising it. 5% is extremely fair IMO.

[Luna Bliss]

14 minutes ago, Blush Bravin said:

The fact that it's gone up many times in a short period just means it was stupidly low before they started raising it. 5% is extremely fair IMO.

I totally agree...5% feels fair to me...but there was talk in the past of 30% like other games charge. The problem with that is the fact that SL is very different from other games.....user generated content is more important in SL vs other games.

[Luna Bliss]

49 minutes ago, LittleMe Jewell said:

Did anyone stop to think about how much PayPal charges for services.

I heard LL has a special deal with Paypal, but this info is only anecdotal. Would be good to have verification.

[LittleMe Jewell]

3 minutes ago, Luna Bliss said:

I heard LL has a special deal with Paypal, but this info is only anecdotal. Would be good to have verification.

If a business does enough $$ with PayPal, they do get **some** discount on the fees - paying roughly 2/3-3/4 if I remember correctly (though I last checked that a year or two back).  You can find pretty much all of that info on the PayPal website.

Given that LL is not a huge company, in the scheme of things (compared to Amazaon, eBay, and such), I doubt they get super special treatment over whatever large businesses get.

[Selene Gregoire]

Deals/contracts get renegotiated periodically so it's probably changed several times since the original contract was negotiated. In all likelihood, in favor of PayPal, which makes the fee hikes for residents understandable. LL's costs go up and they are of the opinion they must recoup that loss and the only way they see (even though it isn't the only way) to do that is to raise the residents' fees.

Good business practice in principle but not in practice.

[Luna Bliss]

1 minute ago, Selene Gregoire said:

LL's costs go up and they are of the opinion they must recoup that loss and the only way they see (even though it isn't the only way) to do that is to raise the residents' fees.

I can understand that...have no problem with it.

But there has been much talk of how SL should be like these other games and websites that charge 30%....that's what I'm concerned about...because as I said earlier SL is very different from these other venues/platforms.

[Luna Bliss]

[Chic Aeon]

1 hour ago, Luna Bliss said:

but there was talk in the past of 30% like other games charge.

I am pretty sure that Ebbe mentioned that 30% (and I mentioned him mentioning it :D) a few times (Town Halls) IN REGARDS TO MARKETPLACE FEES, not cash out fees. Personally I feel the cash out fee is much more fair than a raise in Maketplace fees which ONLY impact creators (once again :D).  So I was happy to see that rather than a raise in Marketplace fees.    

 

If I am wrong on that OR if he also mentioned 30 percent for cash out fees (oh I hope not) then someone please paste in the post.

 

If someone has more concrete info I would be happy to know. I am doing a better job (she says hopefully) of keeping track of important comments so that I can source my info more precisely. The problem is SOMETIMES you don't really know what will become "important info" so it is still a guessing game LOL.  

 

Just trying to keep things historically correct.   

 

[Qie Niangao]

Exasperating podcast of dueling delusions.

Drax still shilling Sansar as if there were some chance it might yet succeed, even at this late date, and despite all evidence to the contrary. I realize maintaining the Sansar fantasy pays his bills, but how can any credibility remain?

And Jo, FFS, really? I'd always thought she was the sensible one of this pair, but somehow she imagines there's some large group of creators cashing-out every month, affected by these changes. Of course there are some -- and we've already heard most of them whining about it now -- there must be enough folks cashing-out to make it worth LL's time to increase the fees. But this idea that a large share of SL residents are cashing out, honest to god, it doesn't take an economist to know this simply cannot be true, and that rather a huge majority of SL users are paying in, not cashing out.

Moreover, even if all the creators who cash out were to move from SL to -- I dunno, get proper jobs in the video game industry or "flipping burgers" or whatever -- there would still be plenty of content created for SL. Indeed, there might be more folks creating more diverse content if they didn't need to compete with the high-revenue juggernauts who suck up so much L$ activity that they can even take money out of the economy. But in reality it would go largely unnoticed. 

Also, Jo seems to harbor the common illusion that "land barons" cash out a lot, presumably because they process huge amounts of L$s to pay their land fees; instead, they're nearly complete pass-through collection agents for LL's Land product, with typically tiny margins if they're lucky enough to not actively lose money on the business. (The Land market wasn't always this bad, admittedly, but it's been a really long time now since Anshe's mug was on the cover of Business Week.)

It is valid, as far as it goes, that this incentivizes what remains of the private Land business to take some rent payments in US$s (via PayPal or whatever) -- but they've been doing that for years, and again, they can only save these increased fees on the crème de la crème net-of-net profit they cash out; the rest of their revenue isn't affected by those fees anyway. So most "land barons" already take some US$ rent payments and won't need to make any changes at all: they're already taking in enough US$-denominated rent that they have to pay some in (above and beyond the L$ rents) to cover their Land fees and never need to cash-out L$-sourced rents at all, paying all their LindeX proceeds and then some directly to the Lab.

[Erwin Solo]

Audio seems like a very time consuming media for the topic.  I thought the Linden blog post was pretty clear and succinct.  

[Arduenn Schwartzman]

$72 in 2003 is about $99 in 2019. For all these years, premium membership hadn't been inflation-corrected, until now.

[Mollymews]

32 minutes ago, Qie Niangao said:

It is valid, as far as it goes, that this incentivizes what remains of the private Land business to take some rent payments in US$s (via PayPal or whatever) -- but they've been doing that for years, and again, they can only save these increased fees on the crème de la crème net-of-net profit they cash out; the rest of their revenue isn't affected by those fees anyway. So most "land barons" already take some US$ rent payments and won't need to make any changes at all: they're already taking in enough US$-denominated rent that they have to pay some in (above and beyond the L$ rents) to cover their Land fees and never need to cash-out L$-sourced rents at all, paying all their LindeX proceeds and then some directly to the Lab.

i agree with this. I also thought it was also over-emphasized on the show, that tenants paying landlords via Paypal to avoid L$ processing fees, exposes LL to some greater risk. What was missing in this part of the show, is that when the landlord gets the rent via Paypal, the landlord has to pay LL with cash, some if not all. Cash which is fee-free to LL

[Qie Niangao]

39 minutes ago, Erwin Solo said:

Audio seems like a very time consuming media for the topic.  I thought the Linden blog post was pretty clear and succinct.  

Oh, no kidding. I mistakenly tried to listen to it directly on the website at 1x speed and got distracted by the relative excitement of grass growing. Thankfully, my usual podcast app plays it back at 1.5x speed which makes it almost tolerable. (But then, I've grown accustomed to Kara Swisher at 1.3x speed, so YMMV.)

[ChinRey]

19 hours ago, Luna Bliss said:

One could also mention that it's gone up many times in a short period of time, that a pattern has formed, and there's every indication that the fee will continue to rise..

Yes it will. LL is slowly but surely reducing the cost of land and increasing their revenue from other sources to compensate. Although I'm not sure if they ever said it straight, Ebbe Linden said long ago that land prices were too high but they couldn't reduce it without finding some other way to make money. I think it's fairly obvious. LL's income is way too dependent on tier as it is.

 

4 hours ago, Qie Niangao said:

Drax still shilling Sansar as if there were some chance it might yet succeed, even at this late date, and despite all evidence to the contrary. I realize maintaining the Sansar fantasy pays his bills, but how can any credibility remain?

Yes but that's his job. We are customers and are allowed to criticize LL but an employee should never do that in public except in some very rare and special cases. Do you remember when LL was struggling so badly with recklessly illoyal co-workers they had to forbid them to say anything publicly about SL at all? We do not want that to happen again, it's not doing anybody any good.

Edited June 12, 2019 by ChinRey

[Beth Macbain]

14 minutes ago, ChinRey said:

Yes but that's his job. We are customers and are allowed to criticize LL but an employee should never do that in public except in some very rare and special cases. Do you remember when LL was struggling so badly with recklessly illoyal co-workers they had to forbid them to say anything publicly about SL at all? We do not want that to happen again, it's not doing anybody any good.

I didn't listen to the podcast, nor am I going to... and have never listened or watched anything Drax has ever done, but his name is everywhere as some sort of SLeleb. 

Is he a LL employee? A Sansar employee specifically? What does he do for them? I thought he was just some schmo like the rest of us. 

[KanryDrago]

27 minutes ago, Beth Macbain said:

I didn't listen to the podcast, nor am I going to... and have never listened or watched anything Drax has ever done, but his name is everywhere as some sort of SLeleb. 

Is he a LL employee? A Sansar employee specifically? What does he do for them? I thought he was just some schmo like the rest of us. 

Can't say I have ever heard of either but then I don't follow sl blogs

[Luna Bliss]

16 hours ago, Chic Aeon said:

18 hours ago, Luna Bliss said:

but there was talk in the past of 30% like other games charge.

I am pretty sure that Ebbe mentioned that 30% (and I mentioned him mentioning it :D) a few times (Town Halls) IN REGARDS TO MARKETPLACE FEES, not cash out fees. Personally I feel the cash out fee is much more fair than a raise in Maketplace fees which ONLY impact creators (once again :D).  So I was happy to see that rather than a raise in Marketplace fees.   

If I am wrong on that OR if he also mentioned 30 percent for cash out fees (oh I hope not) then someone please paste in the post.

If someone has more concrete info I would be happy to know.

Just trying to keep things historically correct.   

I'm glad you're recording SL History
Yes it's great that the fee increase is shared by those beyond the MP (more fair, as there's lots of economic activity outside the MP and the cost should be shouldered by these people too).

If you listen to the exchange between Draxtor and Jo you can hear how (when Jo is attempting to make her case that she's not all to happy about the fee increases), Draxtor enters with the 'but other games take far more' as his reason for why our fee increases should be okay. I hear this sentiment frequently as a justification for why fee increases are fair -- I hear it 'out in the wild' as well as by those who have/have had close associations with Lindens.
There was an article by Hamlet sometime back where he's basically saying we've got it too good as merchants and that LL should get more money like other games do. I believe in that same article he published cashout stats, demonstrating there is LOT of cashing out going on (unlike what some seem to believe on this thread), and demonstrating that LL would gain a lot financially by getting 30% of it.

Once again, I'm kind of shocked that people are comparing apples and oranges, as SL is so very different from other games.
I only hope LL recognizes this, and it seems they might as they are proceeding slowly to test what the effects of fee increases will be.
If they're not aware of the differences I can only say 'they're doing it again...looking outside SL in an attempt to make SL into something it's not'.

[Luna Bliss]

7 hours ago, Qie Niangao said:

But this idea that a large share of SL residents are cashing out, honest to god, it doesn't take an economist to know this simply cannot be true, and that rather a huge majority of SL users are paying in, not cashing out.

Qie aren't you similar in many ways to those opensim communists who believe all content should be free?      I remember you disparaging content creators quite a few times, and now you seem to have issues with people who cash out of SL.

A LOT of SL residents cash out SMALL amounts. It's very inspiring to them to run an online business & fund their SL existence, and make a little money on the side if they're lucky. And for some it's even a necessary bit of income that pays a few RL bills. Most of the time they add additional value to SL via hours of hard work via various projects that make SL a better place for all -- far more value than someone simply inputting some of their RL cash.  We need to take care not to drive these people away.

Edited June 12, 2019 by Luna Bliss