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Should Linden Lab Add Revenue Sharing Tools for SL Merchants & Their Subcontractors?

SL21B_Rome Peter strindberg

Lots of interesting comments on last week's look into Second Life's shadow mesh economy, including this one from Peter Stindberg, creator and lead scripter of popular SL-to-Discord bridges. As he explains, mesh makers and mesh riggers aren't the only ones whose skill are often subcontracted:

The same goes pretty much for scripting: There is a demand for commission scripting, and I get 2-3 requests per month, some of my scripter friends even more. I usually turn them down and refer them to my scripter friends (and help them negotiate prices, as I am the biz-mind).

The key is to negotiate a good rate for the project, and make sure you actually DO get paid. Everyone knows that the scripts you write as commission get used in commercial products that will make the merchant many times over what they pay for the script. But that's fine. They do the marketing, they do the sales, they do the customer service. A freelance scripter can focus on the scripting, and does not need to deal with other people.

Peter goes on to discuss the topic of shadow subcontractors getting a cut of sales from brands they work for. Is that even feasible? 

Maybe, he suggests, if Second Life had the tools for sharing sales with many creators:

My left-of-center heart agrees with your previous statements that fair compensation and a share of the revenue would be, well, fair. But SL does not have the tools for that, so any agreement along those lines relies on unilateral trust.

It would, however, be a nice dream to think SL might get the tools for a trustful, auditable hierarchy of downstream percentage payments. But it has not.

So better get an agreed-upon sum, that reflects the work you have with the script. And if the product becomes wildly successful, the client is more likely to ask you again for a script.

I am not a scripter, but I think a revenue sharing mechanic for Second Life merchants could be fairly easily created. I guess the question is how many merchants would actually want something like that? (Please opine in Comments!)

Then again, there's another immediate way SL merchants could share revenue with creators: Form a real life company, and make revenue sharing part of the payroll process. I believe some top merchants already do that, but only after making enough money for becoming an actual LLC to be worthwhile.

BTW, read my profile of Peter's SL business here.

UPDATE, July 1: Analysis from Peter on these ideas in Comments! 

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One response to “Should Linden Lab Add Revenue Sharing Tools for SL Merchants & Their Subcontractors?”

  1. Peter Stindberg Avatar
    Peter Stindberg

    Thanks for choosing my comment for this new post. Your suggested solution has its charms, but is highly dependant in where you live.
    As an EU resident, forming a company has more bureaucratic hurdles than – up to my knowledge – in the US. Our labor laws are much stricter, our requirements for incorporations are much more complex. Registering a company and get all the paperwork done easily set you back 5-10k EUR. Hiring people requires written contracts, and there are minimum wages to consider, social security payments (split payment), mandatory healthcare (dual payer system). You might need to pay shares to chambers of commerce, chamber of artists, in most cases you need a tax advisor, you need a commercial bank account, some insurances etc.
    I have seen your charts, and the tiered comparison to Roblox, and my business hardly makes a blip on those charts. The idea of incorporating and hiring someone is absurd to me.
    Of course, I also saw the high rollers in your charts, but I would bet they already are incorporated and have either employees or contractors already.
    What I mentioned in my first comment would be a technical solution for subcontractors. As a merchant, I would give subcontractor A a 5% share of every sale, and subcontractor B a 3% share. They would see (anonymized) data of each sale and get a transaction log of their shares. They’d also see price changes, refunds, or any other changes to the digital contract. Subcontractor B could then dice to have their own subcontractors B1 (with 20% share) and B2 (with 5% share). The Merchant would not see the sub-subcontractors – their audit trail ends at the payments – and the sub-subcontractors would not see the intial payments, only the payments the subcontractor B receives.
    This smells like blockchain, but surely could be implemented without, as it is a simple tiered payout system.
    The question is though: What would be the benefit for the Lab implementing things like that? A helluva work – for what? It would create a certain amount of transparency where it might not even be desired by the parties involved (Lab, Merchant). And unless subcontractors unionize, they can’t enforce using it that way.
    Maybe I lack fantasy, but I fear the time-honored way of ‘I need x, y and z done, and I pay that much’, and then negotiating a price that the subcontractor agrees on is, well, time-honored.

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