Second Life vs. Real Life Economics

This is why people make fun of the government. :-)

On Friday January 18th, the news broke that CPB is funding WGBH's initiative to build a virtual radio station in the online virtual world of "Second Life". The exact amount wasn't mentioned, but the upper limit of this round of grants is $20,000.

The following Tuesday, public radio's Marketplace ran a story about how companies are pulling out of Second Life because there's no money in it and it bodes ill for the future of Second Life as a whole.

Oops. A day late and a dollar short?

I was fairly heavily involved with Second Life from August 2006 until summer 2007 through my work with The Infinite Mind. The entire time it was obvious, to me at least, that Second Life as a concept is a vanguard of things to come; it is a prototype of what the entire web will likely be in the future.

At the same time, it was equally obvious that Second Life as a specific platform/company was inevitably doomed to fail. This isn't an indictment of Second Life or its parent company, Linden Labs; it's recognition of the history that the first major player in any new web venture rarely ends up being the top dog. Microsoft eventually trumped IBM. Google and Yahoo stomped Lycos and Altavista. Anyone remember Friendster...or its namesake's ancestor, Napster? Frequently the first big player shows everyone what is possible, and then some smarty pants realizes they can do it better/cheaper/with-more-profit and the original player has so much infrastructure and institutional mindset invested in the way they've been doing things that they can't adapt...and in the lightning-speed world of the web, that nimble young startup can trounce your business in less than a year.

Second Life also has, and has always had, a real problem with how their software infrastructure works: it's an outrageous bandwidth and computer resource hog. It requires near-constant updates (which take several minutes to download and install, even on a office LAN). And the system's design precludes more than approximately 100 "people" (aka "avatars") from being in the same location, so you can't have large-scale events. It's only a matter of time before someone else outside of Linden Lab solves these problems. And the longer it takes Linden to solve, the more users sign up but then drift away, and the fewer real-world businesses can turn a profit from their Second Life ventures.

This is also why I find this venture by WGBH perplexing. I mean, it's not entirely new...NPR's Talk of the Nation : Science Friday has had a weekly Second Life presence for a while, now. The Infinite Mind had an in-world island and did several events a year and a half ago. And it seems like WGBH is going to spend a lot of time and effort to create, maintain and market a Second Life presence right when most people are drifting away from Second Life to the "next thing"....and virtually everything WGBH will do for the Second Life venture is not portable to whatever that "next thing" is.