Mark Kingdon, CEO of Linden Lab, promised that efforts towards greater content protection in Second Life were ‘coming soon’ in response to a series of questions following his recent appearance on Metanomics.

“That is a huge topic and one I am not going to cover here except to say we hear your concerns and we are working on some things that can help. I’ll check with the team working on this area to see when they might be ready to talk about our work.”

Now, I don’t know who the team is exactly. I can barely figure the difference between the product guy and the enterprise guy, let alone all the teams under them, powered by the JIRA, of course, and a bunch of road maps, and a strategic plan, and now new moles working on sims that will come pre-configured with buildings or stores or offices or whatever.

In any case, any movement towards protecting content is a move in the right direction, but his response feels a little bit like an aside to me, not like his other pronouncements: thou shalt improve the first hour; thou shalt turn us into Facebook; thou shalt create a new interface with retractable menus and Flashy widgets or whatever, but a new interface we must have!

I mean, isn’t content and its protection what built Second Life? Isn’t copy/mod/transfer about as close as you can come to an ideal system for allowing people to create stuff, sell it, let others modify it, collaborate on it….all the things that Creative Commons purports to do but, well, doesn’t.

See, Second Life is an incredible platform, it’s a technological marvel – but it’s a marvel amongst many, as platforms like Metaplace open up, and Blue Mars gives us a hint of a 3D environment that will make my PC chug and steam and whistle but that will LOOK really good, and those OpenSim people proclaiming they’re building the Apache of virtual worlds (but who aren’t, well, really adding that much INNOVATION as of yet other than fancy physics).

C/M/T is what it’s all about kids: it’s Little Big Planet but with the right to sell your levels to others; it’s The Sims Online but with a wider range of avatars; it’s Facebook, or Twitter, but instead of little game widgets or bloggy haiku the whole PAGE is your own, and you can sell every bit of it, every photo, every poke, every status update, every font if you want and not turn around at the end of the day and find out that the platform owners, well, OWN it.

C/M/T built Second Life, C/M/T powered what must be the largest micro-transaction economy in the world today, C/M/T powered the ability to sell and buy stuff for fractions of a fraction of a cent if you want, C/M/T is what filled my inventory with 15,000 objects called, um, object, but they’re MY objects and I’ll organize them if I want to.

Content protection shouldn’t be an add-on M, with “some things that can help” being kicked off to some team in the back corner (and I’m picturing them working on pamphlets, or maybe a little handy “5 steps to filing a DMT claim” blog posts, or maybe a free legal clinic put on by the folks at Pillsbury once a month or something), content protection and C/M/T is IT. Without it – kiss the whole place good-bye, in my opinion, because you’ve lost the single greatest thing that Second Life invented, and that almost every major media company in the world today would kill to get their hands on: a digital economy where the goods being transferred have protections, can be bought, sold, modified, and copied as the CREATORS wish, and where a billion transactions measured in the scale of pennies or fractions of pennies adds up to millions of dollars.

Virtual Goods are for Kids
I was reading the Times today and a few articles stuck out, one of which was another passing glance at Facebook and the $500 million it expects to sell in virtual goods, and the author points out that this industry in virtual goods has some problems:

1. There’s no legal precedent that a user actually owns their “goods”
2. Counterfeiting can undermine the business
3. There is the issue of over-production
4. How long can a product with no real-world value stay useful?

Same thing goes for virtual goods on cell phones, or clothes on Sony Home, or all the other places where little digital gifts are being swapped and sold: the business model disappears when the objects become ubiquitous, and having no real-world value these objects are only worth something if people value them in the first place – that cute lipstick smear on your Facebook profile from last year seems so, well, dated now and tired, and the cake with candles on your birthday doesn’t necessarily fill your heart with some new joy.

Now, there’s something to realize though, about this nascent virtual goods industry over on Facebook and elsewhere – and that’s the fact that those goods aren’t really GOODS….they’re STICKERS. And stickers are fine, just like on-line greeting cards are fine – because some people need to outsource their self-expression. It’s not enough to write something witty on someone’s wall…because not everyone is witty, or maybe they are but you in particular aren’t worth the attention, but sending someone a little bouquet of roses gives you a nice neat short-cut to saying something profound.

And so sure, virtual goods are great, just like on-line greeting cards are great, but at the end of the day they’re just proxies for expression, you can’t do much with them other than hang them on your wall maybe, or stick them to the fridge…see? That’s the sticker part.

Second Life has tackled some of these issues:

1. There is a legal precedent of our ownership of what we create, both as expressed in the TOS, and in the early case law surrounding the issue (although, frankly, not tested in a way that would clear up some stuff, but let’s leave that for this week’s Metanomics I guess).

2. Yes, counterfeiting CAN undermine the business. And that’s what this is all about – whether the Lab will actually protect content, or just give it a glance and move on. But there is enough protection in Second Life that it’s a damn good start: all content MAY be copiable. But the combination of good policy, strong enforcement, and reasonable uses of technology to counter it can all go a very long way to curbing theft to a minority.

3. Over production is a different matter. Second Life was not built with any content sinks. Stuff doesn’t decay. In a game, stuff decays or is bought – your grind for herbs, you sell them, the herbs get taken out of the game and you don’t end up with some sort of deflationary spiral. In Second Life, stuff DOESN’T decay. The only sink, really, is closed accounts and bottomless inventory.

4. Stuff in Second Life is USEFUL. It HAS a real life value. Now, much of the stuff in SL is stickers as well – but the difference is that those stickers can take nearly infinite forms. On Facebook, gifts are limited to 100 pixels by 100 pixels or something, it’s flat, and, well, that’s it. In SL, the stickers – the things which we use to decorate or self express, are nearly infinite, whether it’s the skins our avatars wear, the clothes, tattoos, furnishings, hair, wings, whatever.

But beyond self-expression, which, when given nearly infinite form is enough, there is also the utility of “stuff” in SL to achieve ends that you just can’t achieve anywhere else: training, storytelling, role playing, teaching, interacting. This is stuff with real world value, either because it drives in-world experiences that people value as much or more than other experiences, or because it drives value in real life situations.

Free Salary for a Salary
Now, matched to content that enjoys value, and that can be reasonably protected, is an economy that allows that content to be traded and sold and for people to make money off of it.

Now, as soon as I talk about an economy, I can’t help but wade into the whole “information wants to be free” discussion, and it’s a swamp, frankly.

But here’s how I see it: information wants to be free primarily to the people who consume it. Information rarely wants to be free to the people who create it, unless those people are convinced that there’s a benefit to them in some other way.

It’s not that complicated really: if I write this blog post, and put it up for free, I might do it for a bunch of reasons, and yet nonetheless convince myself that it’s altruistic:

- I want an easy way to save myself time, by creating a log of sorts, and hoping that by doing so others append to that log, and expand my knowledge
- I want to increase my reputation
- I am subsidizing the activity, or I am doing it in place of some other thing that I might do with my spare time
- I want to eventually sell Google Adwords or banners or who knows what else, but eventually I have this idea that I’ll make money off of it.

See, I’m really hard pressed to think of an example of someone producing something and giving it away where there isn’t some sort of economic trade-off of sorts. That economy could be in enjoyment, it could be in reputation, it could be in cash.

So: people like to consume free stuff. People who MAKE stuff convince themselves that by doing it for free, they will get something in return (and besides which, everyone ELSE is giving it away for free, so what choice do they have?)

Now – if you look at the spreadsheets or think this through logically, you’ll be pretty quick to discover that there’s not a lot of, um, LOGIC to it. I mean….you can blog for a year on the off chance that you’ll become the next TechCrunch, and maybe if you’re smart enough you WILL. Just like you can code for some open source project on the off-chance that you’ll land the big consulting gig, or gain the rave reviews of your peers and that those reviews will lead to lots of contracts and projects….but for the most part what you’re doing is making an investment, and the investment is made against future unknown returns.

Now, if a bank came to you, or a stock broker, and asked you to invest, say, $50,000, which is the equivalent of a year of blogging or a year of coding for an open source project, and in RETURN they said “We’ll give you enjoyment, and we’ll give you the off-chance of making back, hmmm…well, MAYBE making back your investment, but at that point we’ll call it a JOB” then you’d probably hang up on them, or relegate the e-mail to spam, because what they’re asking you to do is invest $50,000 for a….for a JOB.

See – I think what happens is, we know the logic doesn’t work, and we do it anyways – we do it first because we enjoy it, and then we do it because we’re convinced there’s a payoff somewhere, and if we ever STOP enjoying it, or stop being convinced there will be a payoff, or just can’t afford it anymore….then we stop. Which is why open source projects litter the landscape like so many rusted Chryslers.

So why do we do it? Why do we push ourselves PAST loving it, or past our faith in a pay-off, or past even our ability to necessarily afford it – in time, or lost leisure, or lost income? I mean, who the heck would pay a finders fee for a job? It sounds like something offered in the developing world or something – ‘pay $10,000, become a nanny in America!’

I suppose the difference is a sense of higher purpose: because that investment you’re making, the dues you’re paying for a JOB, are tied to something bigger – to intellectual challenges pursued and problems solved and technologies advanced….and on these things, I would never begrudge anyone the right to do what they love and to give it away….because if you really DO love it, then go for it – follow your bliss, as they say, but don’t delude yourself that bliss will have a payday….we’re promised rewards but they may not be monetary.

But the higher purpose that I DON’T buy, primarily because I think it’s naive, is the idea that by doing this stuff it helps to upend the hierarchy, that it crumbles the corporations, that it spreads the power, that it gives the tools to everyone. Sure – on some level it does: if there is an undue concentration of power in one place, it probably deserves to be toppled. Microsoft’s monopoly on the desktop for so many years comes to mind. But there’s two things about this: one, it will usually just end up being replaced by OTHER corporations; and two, it will probably fall on its own.

C/M/T is a Pain: Keep It That Way
The above probably sounds like a rant against open source. It’s more a rant against the idea that there’s some sort of altruism or logic behind the idea of ‘free’ that I’m not entirely sure holds true.

Open source isn’t much different than a quilting circle or a barn raising. A community comes together, everyone brings their own tools and time, and maybe they help build a new church or whatever: the whole community benefits, everyone who bore a hammer feels good about themselves, we can all take pride, and the world advances towards being a little more civil.

The problems come when Joe shows up to help out and hopes to get hired as a woodworker the next day, or the church is built on company-owned land, or Pete wants the cost of his nails reimbursed.

See – C/M/T, the permission system in Second Life, helps to solve a lot of that. You can still do stuff for free if you want – but you’d better know that you’re doing it for the right reasons, because more often than not free is nothing more than a cheap advertising ploy that makes you look more like WalMart than Tiffany’s.

And C/M/T shouldn’t change.

There’s this JIRA out now that argues that the mechanics of setting perms should be changed so that it’s EASIER to make choices about the stuff you make.

Let’s say you’re a builder working on a team – you need to transfer your stuff back and forth, it’s just easier if it’s all full permissions. So the JIRA proposes that you should be able to toggle your default permissions: turn it to “Full permissions” or “Transfer Only” and leave it there. Avoid the hassles of having to remember that every prim you rez needs to be changed from its default, avoid all the complications of resetting them every time.

The support for the JIRA is support for choice, and choice is hard to argue with.

And yet much of economic and behavioral science is now focused on the idea that we are NOT necessarily rational actors. In their book Nudge, Richard Thaler and Cass Sunstein analyze in great detail the errors we make in judgment:

“The picture that emerges is one of busy people trying to cope in a complex world in which they cannot afford to think deeply about every choice they have to make. People adopt sensible rules of thumb that sometimes lead them astray. Because they are busy, they have limited attention, they accept questions as posed rather than trying to determine whether their answers would vary under alternative formulations. The bottom-line, from our point of view, is that people are, shall we say, nudge-able. Their choices, even life’s most important decisions, are influenced in ways that would not be anticipated in a standard economic framework.”

The current C/M/T system is, in fact, the ideal ‘nudge’, and is one of the hidden choice architectures within Second Life that makes it what it is: it nudges us towards the protection of content but still allows us the choice to change it.

The C/M/T perm system is a choice architecture based on the realization that we are not all rational actors (and especially not when we’re new to Second Life). It’s a nuisance at times, infuriating at others, but even for someone like myself who has rezzed his share of prims, I STILL need the ‘nudge’ of changing those perms so that I make the conscious decision that they should be changed.

As it turns out, the Lab not only invented a wonderful system for content creation and an economy for that content, they also created a choice architecture that is as advanced as some of the leading economists’ thinking on the topic: an architecture that nudges us towards the conscious application of permissions, to conscious decisions about a platform where we may decide to give away what we do for free, but where we’re continually prompted to ask: is this an investment I want to make, am I doing this purely for bliss, will the communal barn stay raised, and will I have a need for my hammer tomorrow.