6.

0 JAN
SL Business
The Premiere Virtual Branding Magazine

Behind the Scenes

with Tateru Nino
You’re on the Air
Second Life’s
Economic Enigma
SL Busi Magazine

About The Cover

Photography by: Dalian Hansen

SLBM Photo Studio @ Egremont
Featuring: Tateru Nino

SL Business Magazine
is published in a variety of
formats. Please visit our web site
for details on where to get your
Virtual (Prim-based) Edition, 26 Featured
PDF (Web-based) Edition, or Success Stories
Behind the Scenes with Tateru Nino
Published (Paper-based) edition. Ute Hicks
iness
Contents for 6.0 JAN Issue

08 16 46 50
Getting Started The Toolbox Music Fashion
Have a Seat You’re On The Air In a Jam Comic Relief
Perfect North Ecocandle Riel Ludo Merit Macaria Wind

58 70 76
Investment Law Comic
Second Life’s Law of the Land Lifetime Value
Economic Enigma Deeeep Witte of a Customer
Ludo Merit Kito Itoku
From
The
Publisher
Reaching.
Hunter Glass
As we begin the New Year, I think this is a fitting
opportunity to inform all of our readers of the
www.slbusinessmag.com
changes that are going to be taking place with
SL Business Magazine as news and information

ISSUE # 6.0 - JAN

medium. We listen intently for quality feedback
from our readers as we seek to give you the best
possible experience we can deliver. One of the
most common questions we get from readers is
if we are ever going to have HTML or blog style Publisher
delivery of our content. The second question most
Hunter Glass (USA)
often asked is if we will have RSS feeds. It is
my pleasure to announce that we will be offering
these delivery systems starting January 15th at
Creative Director
www.slbusiness.com. This comes as a shock
to some but a great pleasure to many as they are Dalian Hansen (China)
most often times in a hurry and seek up to the
minute business information in an environment
that is changing by the minute. From day one Editor-In-Chief
we had readers who supported a PDF format
and supporters who dreaded the download. Now
Ute Hicks (USA)
we will be offering not only a monthly PDF, but
also a daily blog and a forum for all residents to
post freely to. I also want to take this opportunity Managing Editor
to thank Dalian Hansen and Ute Hicks for their Deeeep Witte (Belgium)
incredible work thus far on making SL Business
Magazine one of the most well liked publications
known in SL. If you ever get some time, send
Proofreader
either one of them an IM and thank them for the
fantastic work they do. They will appreciate it Tiuri Thiebaud (Holland)
incredibly. I wish a very productive and happy
new year to you all! ■
 From
The
Editor
Connecting.
Ute Hicks
2006 saw Second Life fly into a new dimension. The
P ost y o u r o p i n i o n o n o u r F o r u m
world population increased from less than 100,000

residents to more than two million. In the January

Staff Writers issue of SLBM, we visit a resident born during

the heady days of 2005, where team spirit and

volunteerism were the themes of the year. Tateru

Kito Itoku (Belgium)
Nino and a dedicated core of volunteers are always
Ludo Merit (USA)
at the helm when new residents find themselves
Ecocandle Riel (USA) flailing their arms in this virtual environment.

The SLBM cover story studies the personality

behind the prodigy. In toolbox, we take a look at a

Contributors
couple of inventions that guide listerners through
Berenguer Halberd (USA)
a maze of podcasts and radio stations available in

Perfect North (USA) Second Life. In fashion, we meet Kaia Ennui, a

Macaria Wind (USA) designer who branded a comic and t-shirt in SL,

and is successfully marketing them in real life. The

staff at SL Business Magazine want to wish you

Copyright © 2007 Highly Focused LLC
a prosperous new year. Please join us at our new

blog at www.slbusiness.com. ■
GETTING STARTED

Have a
08
 The furniture

business not

Seat
only brings

people together,

but it’s a top

moneymaker

P e r f e c t N o r t h

09
 PEOPLE TODAY ARE REACHING for their
keyboards with the intention of making connections.
Google’s list for the top searches for 2006 include
Bebo and MySpace, Web sites where you can meet,
chat and enhance real life with a heavy infusion of
two-dimensional life.
Second Life offers a step beyond seeing words
on a screen – in SL, avatars meet at welcome areas,
go for a walk near the waterfall, then invite each
other to their homes for further development of the
relationship. Instead of staring for hours at “Perfect
North is typing,” the avatars can sit on comfy
couches, warm up their coffee in a microwave, gaze
at the décor of the homeowner or watch the fish in
the aquarium.
Every possible home décor style is available,
from zen-induced simple lines to Early American
rockers to dark castles with coffins abounding. Large
rooms with soaring ceilings require large sofas, pool
tables, magnificent artwork and plants that never need
watering. In real life, the avatar occupies a modest

10
ranch style suburban Midwest home decorated
in what was on sale at the town’s furniture
store; in SL there is a mansion with eleven
rooms, artfully landscaped, technologically
protected from all comers except those
invited and screened. Each piece of furniture
is selected after careful consideration and
Linden money is no object.
The market for home furnishings in SL
is booming, but it is impossible to tell exactly
how much money is being spent. Furniture
manufacturers have offered estimates that
place the financial impact at 25 percent
of SL’s economy. A search for “Furniture
Stores” on the Linden Lab Search engine

within SL reveals more than 100 listings. There are

new stores, long standing establishments, and used
items available at garage sales. Or avatars can build
their own furniture. Interior designers are available to
assist those who are too overwhelmed by the choices
and just want a nice sanctuary from real life.
Deciding to go into the furniture business can
be a surprisingly successful way to finance one’s SL
adventures, challenge creativity boundaries and to
perhaps find a SL job that replaces the RL one.
Mash Mandala and his partner Baccara
Rhodes, currently have two sims of furniture stores
and, at press time, were planning an expansion to
accommodate the increasing demand for home décor.
The store (previously known as Home Depoz), is
Depoz W and Depoz E. When questioned as to
whether the name change had anything to do with the
Big Orange Box in RL, Mandala responded, “No, we
wanted our own brand, our own style.” In business
since 2004, Mandala’s multi-leveled store provides
a shopping cart that customers sit in while whisked
to the various showrooms. His advice to newcomers
who want to start their own furniture store in SL is
to be persistent and ask lots of questions. “I failed
the first class I took in building,” he confesses with a
chuckle. “My instructor told me I was hopeless, but
we laugh about that now.”

11
 Scomac Hicks and his partner Ayla
Holt were furnishing their own home when
they found that most of what SL offered was
overpriced and not built to scale. Hicks had
a flair for building, and Holt was excellent
at textures. Hicks Furniture was born, and
now the two avatars spend hours online
developing their business as well as their
personal relationship.
The furniture builders and designers
lean heavily on real life magazines and home
décor television shows for ideas, but the ability
to add texture and colors and scripts to pieces
are options not available to real life coffee
tables and lamps. Emily Lang of Emily’s, has
real life fashion design experience, and when
entering SL wanted a reason to work with
prims. Her furniture is unique, with touch
change fabrics that require a custom script.
Some entrepreneurs saved all that
building time by copying a real life furniture
store’s catalog exactly, piece by piece into
their SL furniture store. IKEA’s catalog, turned
into prims, is selling quite well. IKEA’s USA
public relations director declined to comment
on this fact, but soon the company’s eyes may
turn to SL, as Dell, Adidas, and Sony have.
StyleHive visitors can purchase virtual
versions of the RL home furnishings on
display, click on the same object and be sent
directly to the StyleHive page to order the RL
version for their RL home.

12
13
 Xylo Hasp has been in the SL home furnishings industry
for some time, and fantasizes that the real life furniture stores
will come to SL and choose one of his unique designs to
translate into real life furniture, blending his virtual world
with the real one.
Side by side with the booming home furnishings
industry is the business of interior design. Paige Raven has
a flair for decorating in RL that has blossomed in SL. Her
clients are quite happy to just give her their Lindens and
“set her loose” to decorate and even build their home in SL.
Raven is currently working on a manor that requires filling
ten huge rooms with all the comforts for entertaining. “Even
in SL, we love our homes,” Paige said. “We want them to
reflect who we are.” She has been in business for two months
and has completed over fifteen projects. The owner of a
dance studio in RL, she is contemplating turning her studio
duties over to a manager and devoting more time to her SL
business.
How important is a well furnished home in a virtual
world? What price can be placed on the ability to IM friends
and ask them over to share a bong, sit in the hot tub, discuss
books in front of a crackling fire, or crawl under the virtual
covers with that special someone…all while in the privacy
of one’s own home?

14
 The answer may be found in the words of
an end-user and furniture enthusiast. Malcolm
Lewellen, whose modern glass enclosure is
perched 447 meters above Second Life’s earth,
finds peace in his SL home. The house features
a large screen television and a waterfall wall
surrounding comfortable, inviting couches. Soft
music fills the air, and all around are examples
of Malcolm’s personality: art, flowers, and the
view. “My SL home gives me tranquility and a
sense of accomplishment,” Malcolm explained.
“It is an expression of self that I enjoy being in
and sharing with others. I feel safe here.” ■
Cozy Cottage Interior Design
Makkeolli 101, 72, 62
Depoz W
Depoz W 253, 92, 26 + Depoz E 129, 133, 26
Emily’s - da Vinci 62, 248, 537
Hicks Home Furnishings - MIA 144, 96, 30
StyleHive
Rivulet 76, 52, 0 + Dublin 134, 65, 26
Xylo’s Furniture - Hagen 68, 205, 21
15
THE

TOOLBOX

You’re
on the
Air
Pockets of

enthusiastic

podcasters

bring the medium

into Second Life

16
E c o c a n d l e R i e l

17
18
A pretty gal is sitting alone on a park bench.
All of a sudden she bursts out in laughter.
She’s not wearing headphones, so what could
she be listening to? She turns, and the sun
bounces off her source of her entertainment
-- an Mp3 player attached to her shirt sleeve.
Alas, she’s one of many Podcast
listeners in Second Life.
The MP3, available from Podcast
Island, lets listeners pull up a directory of
podcasts to listen to. Podcasting is a cottage
industry in the real world, but is finding a
growing audience in Second Life. While most
podcasts are purely a source of entertainment,
they can be a source of advertising revenue
too, and several Second Life residents are
creating business models to make money
from Podcasting.
Peter Newell and Adri Saarinen of the
virtual content creation firm, Metaversatility,
created the podcasting kiosks that are found
on Podcast Island. The podcast kiosks were a
contract job undertaken for the avatar, Pickle
Radio.
Methods to generate revenue for SL
podcasts include getting a podcast sponsor,
putting audio ads on a podcast’s Web site,
or requiring listeners to pay per download,
Saarinen says. Newell added that podcasts
can serves as marketing for a name, or brand.
“I would say doing any number of those
things could generate sustainable income if
you have a popular podcast,” Saarinen says.
“Using Podcast Island’s advertising system
could certainly help bring listeners in, and
therefore generate revenue.”
The avatar, Pickle Radio has been
running Podcast Island for six months. The
island lures visitors with a performance stage,
an automated tour around the island, and
other incentives. Radio’s sim gets a weekly
visit from Scott Sigler, the voice who reads
“The Rookie,” a podcast about a fictional
football player.

19
 His main business is the podcast kiosk matter, sometimes it’s not.” The show now
rental stations where one can rent a podcast attracts 10,000 listeners per episode. Swords
kiosk for $L50 per week. Users can put their says podcasting has “huge market potential”
own advertising on the player , and configure but he originally was not interested in the
the player so that the user can click on the monetary aspect.”I haven’t actively gone
player, load the user’s Web site and listen to after (the money) because (creating the
that user’s custom content. show) wasn’t a capitalistic decision. I wanted
Radio’s new strategy is giving to evangelize what SL is about.”
residents a free podcast player to set up on He said he started thinking about
their own land. With these podcast players, advertising revenue at about the 1000 to 2000
residents are directed to Radio’s Web site download point.
www.podcastpickle.com, where they can “I set rates and quickly found it was
pick from a directory of podcast shows. Radio taking more time to sell the ads than it was to
employs several people to help run his island. collect the fees and make a profit.
He doesn’t depend on his podcast business When we got up to 10,000 listeners, we
for his sole support, but envisions a day when got requests again.”
it will provide a stable income. “Podcasting He has had offers for $400-sponsorships
is still a baby,” he says. for one show, which he turned down because
The Goddess and Banana show it was only a one-time commitment.
(www.gbaffair.com), with about 1000 Swords says his server fees, which
listeners, follows a couple and their average $400 to $500 USD a month depending
mishaps in Second Life. The Goddess, Yxes on how many people download his podcasts
Delacroix, says their business model is each week, are his biggest expense.
selling sponsorships for the show. A Second
Life business can sponsor four episodes for
$L6,000. Real Life firms are charged $200
USD for four shows. The package includes
a 30-second spot created by their team. The
show comes out three times per week, and
usually lasts between 45 - 60 minutes. Banana
Stein handles the production of the show, the
recording and editing. The two stars, from
Arizona and California, met in-world and
created a fantasy island built in Los Arboles
that showcases their show, and their work as
virtual content creators.
John Swords created SecondCast more
than a year ago. He describes the SecondCast
podcast as a lighthearted, off-the-wall
conversation. “Sometimes it’s clear subject

20
21
22
 “To charge $L50,000 to $L60,000 per episode is more
than what advertisers want to pay.” Swords’ rate card offers
$L20,000 for a basic sponsorship.
HippieGeek Book is a veteran SL resident who shuns
the idea of making podcasting into a big business. Book
invented the Podbong, a radio that lets users see a directory
of podcasts and radio stations available, and play it in their
land. “If I wasn’t a hippe, I don’t think I would have called it
a podbong.”
He was the first to set up a mall of audiobooths, where
SL residents could go in and listen to a different podcast
in each booth. When an entrepreneur offered to go into
business with him and suggested charging users to listen to
the podcasts, Book shut down the booths.
“Podcasters can take a prim and dress it up how they
want, then put a code in it and turn it into a podbong. I
gave it away and let them distribute it, with the caveat not
to sell it.”
Book says up to 100 of the free podbong radios are
bought at SLExchange each day.
Book suggests that dance clubs can use the Podbong
as a branding tool, the same way that can be done with the
Pickle player.
Other podcast communities in SL include Stuart
Warf’s Podmafia club in Dimidata, where he holds events for
podcasters and encourages visitors to learn about podcasting.
Inside the Podmafia club, is a “Wall of Fame” with posters of
popular podcasts, both in Second Life and on the Internet.
When SL residents are ready to try creating their own
podcasts, Spin Martin (a.k.a. Eric Rice in Real Life) says
he can offer some tips. Martin has been hosting a podcast-
type show for about five years, His sites, www.audioblog.
com and www.hipcast.com, serve users who want to try their
hand at podcasting.
The main focus of his studio has not been about making
money, though he has had the opportunity. Spin has turned
down ad revenue from Nikon, because he and his colleagues
are Canon users, he says.
Martin says the key to a successful SL podcast is
having a well designed script, and the ability to “get over”
the sound of hearing one’s own voice on playback. ■

23
SUCCESS STORIES

Behind the
One of Second Life’s most infamous

U t e H i c k s

26
 Scenes
residents quietly takes care of business

“I feel like the Paris Hilton of SL. Famous

and well-known for being...well...famous and
well-known.”

- Tateru Nino

27
 SHE ARRIVES AT THE NEW CITIZENS

PLAZA in a long, blue, crushed-velvet

dress, horn rimmed glasses, looking like a

librarian. With a few keystrokes, she has

banned some notorious cage gunners and

saved some grateful new residents who

griefers had jailed and held hostage for

ransom.

Meet Tateru Nino. This one-year-

old resident has had a hand in several

of SL’s most important developments

including developing Help Island and

the mentors group, spearheading SL’s

Third Birthday Bash, and enhancing the

Linden broadcasting system, which allows

attendees on other sims to listen to

Town Hall meetings when the mainland

parcel is full.

“Tateru has been a dedicated volunteer

since first joining up group in the fall of

2005, contributing to the Mentor group in

particular as a leader and teacher,” Jeska

Linden, a Linden Lab employee on the

community development team, says. “She

was an instrumental part of the success of

28
29
30
the Help Island welcoming project,

and led the creation of the volunteer

headquarters in Tenera. We’re very

grateful to Tateru.”

Tateru Nino in real life is a

Melbourne, Australia native in her 40s

who works as an IT consultant rewriting,

testing and debugging software. As

the story goes, she has Asperger’s

Syndrome, can’t look people in the eye

when talking to them, runs the other way

when she sees a crowd, and sees herself

as a failure.

The Second Life Tateru Nino is

gregarious, friendly and helpful while

performing her roles as mentor, scripter,

idea generator, analyst, instigator, and

coordinator.

31
 Nino is deputy director and board

member of the volunteer-staffed New

Citizens Inc. (NCI), a job she says focuses

on administrative policy, general oversight

and communications.

“There’s daily chores in addressing

griefing and cleaning up offensive materials,”

she says of her work at NCI. “Often students

neglect to clean up after a class. Some rather

older people leave ‘spamvertisers’ at the

landing point that hand out advertising to

everyone who arrives,” Nino says with a

look of disgust.

32
 Upon her arrival in Second Life, Hence, the creation of New

Nino found the original Help Island Citizens Plaza and the resort-like

unwelcoming. “It was a bare dirt welcome centers that new residents

island, with a house and a sandbox in can find today.

one corner,” She explains. “I thought Blueman Steele, an SL mentor,

it should be pretty and be something remembers the early days. “Tat and

that...you know...helped and was I were there for the groundbreaking

educational and inspiring.” on the first help island.” He said they

33
 helped new residents pry boxes off their

heads. “The first guy who showed up had

named himself ‘Greefer’ and found himself

on an island with 20 mentors,” Steele

laughs. Steele says Nino was one of the most

inspiring people he has met.

Seven days into her Second Life, Nino

opened up a store called Spark of Genius,

in Achlya (197,183,89) which still generates

sales, although she hasn’t visited the store

recently.

The biggest project Tateru spear-

headed in 2006 was Second Life’s Third

Birthday party bash, which featured

speeches, a parade, live music, machinima,

and art exhibits.

“(The birthday) was coming up and

nobody was doing it,” Nino explains. Torley

(Linden) and I knocked a couple ideas back

and forth and it just sort of happened. Within

a day, I had Mera (Pixel) building models,

and I was drafting the announcements.”

Nino is already planning out Second Life’s

4th anniversary.

34
35
36
 Nino retired from the Live Helpers and

volunteers in the autumn of 2006 to focus on

project development and journalism, but she

is still summoned by the mentors, and she

doesn’t mind.

“I don’t know better than anyone else.

All I can do is help people to help themselves

and to help each other. It’s the gift that keeps

on giving.”

Tateru’s latest endeavor is blogging

for Second Life Insider and New World

Notes. She says journalism is “another way

of teaching and being thought-provoking.”

She understands now what reporters

do. Tateru said she used to give a minimum

of six interviews a week. “They were getting

too time-consuming. I love journalism

students and reporters and all, but if I spend

my time doing interviews, I’m not really

benefiting others.”

Aimee Weber told SL Business

Magazine that whatever Nino does, she

does with passion. Just a few weeks into

her writing job on SL Insider, Nino was

surpassing the quota and submitting five

stories per day.

37
 “So
peopl o
like the
Nino’s low self confidence emerges

every once in a while during a typical

nothi
conversation.

“I’m homogeneous and bland,” she

says one moment, and the next moment she

contri
delivers a humorous anecdote about how

her friend, designer Hyasynth Tiramisu,

sent her a prototype dress when she was

but
themsthe
Justthey
bei
dealing with new residents in Waterhead.

“(The dress) didn’t fully rez, and it left

my..err..headlights sticking out.” Nino says

she didn’t notice immediately since she

sees herself from behind. “This new boy

followed me around for about 3 hours. I

was wondering why.”

Nino insists that she is blunt, math-

lame, and a turnoff. Yet she regales a story

about a favorite guitarist in Melbourne with

38
often
le feel
several glyphs flare to startling particle-

ey have
effected life with Tateru appearing in the

center of it.

“She’s clever and generous with her

ing to
time. She is fun to talk with, and I found

that one tends to meet interesting people

if you hang around her. I got into helping

ibute,
with the Mentors, NCI, and the SL Third

Birthday events in large part due to her

influence. “

ey do:
six fingers, and speaks fondly of British

selves.
punk band, Deathliner, who she longs

to see in concert. “There’s something

about their music that I really like, not

ing who
to mention the attraction of getting

falling-down drunk with good friends

who I’ve not yet met in the flesh.”

Shawk Pertwee, a resident who

are.”
took Nino’s building classes and

became a respectable builder herself,

recalls her first impression of Nino. As

a newbie wandering around aimlessly

after Orientation Island, Pertwee said

Nino appeared to her like magic. “ I saw

39
40
 Ordinal Malaprop, Caledon resident,

steampunk enthusiast and inventor of

gadgets, is a recent friend of Nino’s.

“I must say that she is one of the most

perceptive observers of Second Life that I

know, and is also possessed of a delightful

and educated wit, and a charming character.”

Malaprop adds, “That combined with her

ability to actually get things done and inspire

others to do the same makes a person well

deserving of their place in the history wikis.

So often one comes across the obnoxious but

driven, or the charming but ineffectual.”

Nino does have her detractors. One

well known avatar-rights activist in SL has

accused Nino of being a Pollyanna and

“sugarcoating” the problems in SL. Nino

willingly gave SL Business Magazine names

of other critics, but when contacted, they

chose not to comment.

41
42
WHAT IS A TYPICAL DAY FOR NINO?

“I do some SL development work, so

there’s meetings on that, plus actual product

demos of the finished work,” she says.

“Some social time with the customers when

I can - because the better you understand

the customer the better you can help them.

Then doing interviews and research for the

articles I write - slicing numbers different

ways looking for gold. Meeting new people

- and getting caged, firebombed, hit-on and

insulted.”

43
“So often people
feel like they
have nothing to
contribute,
but they do:
themselves.
Just being who
they are.”
44
 Nino says that during her year in SL

she has become a changed person.

“SL’s certainly changed my life;

changed my perspective on myself and

everything else,” she says in a moment of

contemplation.

“So often people feel like they

have nothing to contribute, but they do:

themselves. Just being who they are.”

“The big life-lesson RL has handed me

over and over is that I’m a failure. Asocial

- maybe anti-social. Not very likable.

Unpopular.

Often incomprehensible. I’d spent

years and years coming to terms with that

self-image. And then a few months in SL -

and I’m suddenly having to adjust to the fact

that I was wrong about that.

I’m still trying to figure out who I am,

now that people are relating to me without

the social impediments that my autism

places on my RL interactions.” ■

45
MUSIC

s h i n g the
n s a re pu mprove
m usici
a
e m p t to i s ions
i f e a t t s e s
nd L they er ja
m
Seco i e s a s
b e t t
dar y for
boun o l o g
echn
the t

L u d o M e r i t

46
 CAN A BAND FROM ALL OVER the
real world jam in a Second Life garage? SL
musicians are eager to do just that, but it’s
not easy. SL Business Magazine interviewed
four musicians who are doing it four different
N A JA
ways.
Lag is usually the culprit that throws
a wrench in the system. We’ve all seen
conversations get shuffled because different
computers receive sentences in different
orders. Many of us have heard live musicians
say hi to someone who left the room seconds
ago. With random transmission delays that
are different for each musician, something
has to be done to keep the music in synch.
Composer and instrument designer
Robbie Dingo makes hyperinstruments that
are designed to jam together, but are played
very slowly. It feels like playing a carillon.
You hit a key and hear the bell ring later as
you’re hitting another key. Despite Dingo’s
genius with sounds it doesn’t sound all that
good. The user is playing on an SL keyboard
that generates .wav file notes. If more than 20
people are on the sim, lag makes it impossible
to play at all. Musicians want to play their
own instruments live.
Musicians Amber Habsburg and
Christine Montgomery recently jammed with
a group of nine and streamed it to a friend’s
sim in SL. The two are working with midi,
which shortens the delay to half a second.
They use ChatConsole to send midi data to a
chat channel and scripts to convert that to .wav
data and play it. Musicians can either play
on their own midi keyboards or click on in-
world keyboards. Habsburg and Montgomery
are working on removing the bugs out and
hoping to convert to .NET code.
The delay is still a problem. Half a
second delay is enough to interfere with “any
kind of fast stuff,” Habsburg said. “We could
play dirges.”
Guitarist and singer Juel Resistance
uses Simplecast software and streams audio
in a chain. When she and five other musicians
performed a jam session in December, she
explained, “I was first person on stream,
so they had to follow me. I could not hear
them, but the second person could hear me,
the third person could hear us both and so on,
and the sixth person on stream could hear us
all. At the end, someone usually is recording
it. They play it back so we can all hear.
“It sounded wonderful but takes practice
for us all to be on same page with volume,
adjustments and things like that.”
The sixth person in the chain streamed
to SL, and the audience heard it up to a minute
and a half later, before five of the musicians
did.
Using the Simplecast method, if the
singer is the first person streamed, and the
percussionist is the sixth person, but the
singer can’t hear him, what happens if the
singer starts singing off beat?
“[the percussionist] types STOP and we
all goof up,” Resistance said. “[That] makes
it fun, it makes us better musicians to be our
best best.”
To the musicians, it isn’t like jamming
in a garage, but Resistance is still enthusiastic.
“It’s one of the most amazing things about
Second Life, being able to perform with
people globally, right from home, and actually
do live performances in real time.”
Another solution feels a lot more like
real time, because it isn’t. Concept designer
i7o Zhu uses software called Ninjam, at
www.nimjam.com.
“You’re not jamming in real time, but
an understood fake time,” i7o Zhu said.
Zhu, who has a collaborative audio
studio in SL in Zeuzera, says Ninjam is client
and server software that eliminates apparent
delay by lengthening real delay. Each
47
musician is playing with the previous measure sent by the
other musicians. Just one of the musicians sends the acoustic
stream to Zhu’s Ninjam server and quicktime encoder
to be streamed into SL.
The musicians hear each other as they jam using Ninjam.
Each can set the mix of instruments to his own preference
and each can record the performance. The musician that
streams to SL is the one who controls the mix that is heard
in SL. Zhu has tested his interface between Ninjam and SL
with two musicians jamming to an audience of four.
Of the three solutions described so far, Ninjam would
seem to be the one that’s most like RL jamming. However,
even fake time has its limitations, especially for faster types
of music, according to Zhu. Musician Plum Hartnell said,
“Whatever you hear is very weirdly out of synch. I couldn’t
get on with it. Give it another five years and the technology
will catch up with the idea.”
Waveplant Irvine, the designer of the CMI software
music synthesizer, has read about Ninjam. “Nice idea,” he
said, “but you have to be pretty good and I think it would
really interfere with musical subtleties. It could work well
for dance music. Your timing would have to be dead on. One
mistake and it would become a shambles.” The Ninjam client
has a metronome to help the musicians stay on the beat.
Irvine is just beginning to work on an audio solution
that will use markers and “some sort of adaptive delay” to get
the music in synch, but not in as rigid a fashion as Ninjam.
Just as our avatars can’t move as well as we can,
jamming just isn’t the same in SL as it is in RL. For the sake
of playing with others from all over the globe, musicians
will live with the limitations and seek ways around them. We
may have to wait five years for high quality technology, but
we won’t wait that long to jam. ■

48
49
FA S H I O N

Comic
M a c a r i a W i n d

50
Relief Designer’s
Second Life
brand takes off
MIX EVIL GINGERBREAD COOKIES,
in Real Life
a branded comic, virtual and real life t-shirts,
and what do you get? A marketing recipe
brewed in Second Life by kaia Ennui.
When asked about the Gothic influence
of designs found at in-world store Nocturnal
Threads in Pimushe, designer and shop-
owner Ennui says, “I was a NYC crazy girl
back in the eighties. I grew up with a mixture
of goth and punk influences and have always
loved fashion.”

51
52
 As a teen, Ennui painted t-shirts and
sold them at Second Coming Records in New
York. She was also into destructive clothing
which she explains as the art of taking clothes
apart, ripping them up and re-sewing them
roughly together.
“I used spray paint, safety pins
and scissors like other artists use oils or
watercolors,” says Ennui.
Though her degree is in psychology,
Ennui quickly burned out of that field and
pursued a career in makeup artistry. As a
freelancer, she worked for Christian Dior, but
after September 11th, as she so eloquently
puts it, “we all got canned.”
Ennui then turned to helping friends
with their Web company. It was there she
taught herself graphic design. So it was
with great interest she read an article in Jane
Magazine about fashion designers earning
real money selling virtual designs to virtual
residents here in Second Life. The concept,
she says, “blew me away.”
She signed up, chose the name kaia
(pronounced ki-uh, long I) Ennui (“bored” in
French) and within three days was designing
in-world.
Not long after beginning her new
career as an SL Designer, Ennui opened her
Cafepress print-on-demand store in RL selling
t-shirts she designed based on SL humor.
Since opening Nocturnal Threads in
spring, 2005, Ennui has made remarkable
progress with the store’s unique and varied
line of male, female and unisex clothing and
accessories, adding new selections weekly.
Her RL Cafepress site is picking up speed
thanks to SL fans.

53
54
 About a year ago, during an IM
with a friend who was describing a recent
nightmare, Ennui found herself thinking
of voodoo dolls. This led to the idea that
gingerbread men are like evil little voodoo
cookies and she started doodling. She drew
an evil gingerbread cookie and made it her
MSN avatar. This led to a few more of what
she calls “dreadful little doodles” which her
friend loved. She thought it might be fun to
make them nicer and the name GingerDead
came to mind. Since Ennui already had t-
shirts in SL and RL she decided to add the
GingerDead line to both stores and in SL,
says Ennui, “they took off.”
“Nocturnal Threads customers loved
GingerDead,” Ennui says. She started
receiving IMs from people who wanted
more so she created a free doll and pajamas.
When she started running into folks in SL
with the dolls she realized just how popular
GingerDead and friends had become.

The reaction from Nocturnal Threads

customers was so encouraging, Ennui began
to wonder what else could be done with
these characters and thought “webcomic.”
She developed a few strips and in October
launched her webcomic site and a new
fashion line in SL, taking the GingerDead
collection beyond t-shirts.
“The GingerDead stuff sort of
happened all together - here and RL
simultaneously,” Ennui says, “and in SL
I could make a real fashion line based on
the comic. Without SL, it never would have
been made into a webcomic.”
Though Ennui still works on projects
in RL updating Web sites and designing for
certain clients, most of her time now is spent
on her own designs for her stores. She wants
to see the newer parts of the collection make
it to RL.

55
 When asked what advice she has for others
considering “crossing over,” she responds, “I would
say to treat SL with all of its potential in mind. It
really is what you put into it. In SL the potential to
reach so many thousands is here - people from all
around the world, so if you were to take something
you do in SL to RL you first should build up your SL
exposure. Get your work known and then announce
the branch into RL. If people in SL like what you
do here, they will be interested in what you do in
56
RL. And people tend to be very supportive and
encouraging. there is a sense of community here,
you know?”
Nocturnal Threads is the SL store, and the
GingerDead Collection is one line and features
original artwork from the comic which can be found
at www.GingerDead.com. Several of the t-shirts
seen at Nocturnal Threads can be purchased in RL
at www.cafepress.com/nocturnalthread.
 Without SL, it never would have
been made into a webcomic.

This designer’s heart and soul is in her store “One day I want to put together some books
and her creations. Nocturnal Threads is very real using the GingerDead characters and Haiku,” Ennui
to its owner. Visitors should be sure to try the says. “The greeting cards I did for the holidays sold
gingerbread cookie outside the store. When this really well. One day I would like to see all this stuff
reporter mentioned the twisted humor, Ennui nearly in RL.” ■
jumped for joy.
What’s the future for the GingerDead friends
and their creator? There are new avatars in the works
and Ennui asked for clay for Christmas.

57
OUTLOOK & INVESTING

58
second
life’s
economic
enigma
The economic statistics provided by Linden Outside economic
Labs are confusing. Nonetheless, they
suggest that land could be losing its hold on
analyst says figures are
the imagination of Second Life gamers—if muddled, land revenues
so, bad news for Linden Research itself, as it are uncertain, and the
needs land sales to make its revenue targets.
In addition, the statistics fail to
40 percent growth
confirm the much-vaunted 40 percent statistic is a chimera
growth rate.
It is a commonplace that Second Life
presents a blank slate upon which participants
draw their own world. Unfortunately, the slate
is a tad more blank than it should be. Several
transactions, activities and events in SL are
recorded—after all everything on the grid is
recorded or capable of being recorded—but
unavailable for serious examination.
This is not the time to beat up on Berenguer Halberd
Linden Lab; in mid-December the company
piloted the grid through an unusually trying
upgrade. In addition, they must contend with
SL gamers’ natural inclination for joyful
anarchy to shade into dysfunction, whether
personal griefing, mercantile copyboting, or
grid-wide grey-glooping.

59
 SL Business Magazine’s mission this
month is to seek out good-quality data about the
economic activity of SL, and to play such part as
we may in creating it.
Let’s start with what we have. Linden
Labs provides what it recognizes as rudimentary
data on membership. But we know nothing about
churn, a standard measure of defection from
companies supplying a service. The test of churn
varies from company to company. Why not
provide figures based on the test
used by Linden Labs themselves,
those failing to qualify for stipend?
We would also welcome figures
for log-ins by class and SL age.

If we turn to the SL economy, we rapidly find

ourselves in deep water. Just how important is land to SL
gamers? The evidence is confusing. Linden Lab provides
figures on land sales and the like, but an examination of
the classifieds of December 9 (table on next page) shows
that land weighs far less with advertisers than does attire.

60
TABLE 1

Sector Proportion Note

Attire 55.1% 1) “Attire” includes clothes, skins etc;

plus malls specializing in attire
Entertainment 15.2% 2) “Entertainment” includes bars,
casinos and sanctuaries.
Improvement 14.1% 3) “Improvement” includes home and
land improvements, but excludes houses.
Real estate 5.5% 4) “Real estate” includes land, rentals and
houses without land
All other 10.1% 5) “All other” includes role-play, Xmas,
software and other tools, cash offers,
Total 100.0% employment and the SL Exchange.

This analysis excludes the “long tail” of advertisers paying less than L$2,500 to put their
ads up for a week.
We have to bulk up “real estate” with “improvements” to get ahead of “entertainment.”
We know that fortunes have been made in land development, but wouldn’t it be nice to find out
what happened to mall values and rentals after teleporting was introduced. And wouldn’t it be
nice to know how residential values vary with location by comparison (say) with restrictive
covenants and density of settlement. So how about land-use fees and sales, as levied from
inception, broken down by parcel size, not to say new land sold and recovered, from inception,
broken down by parcel size, islands and so on?
The business activity of SL is conducted by individuals and groups. Linden Labs
evidently feels that they have something of a handle on this: they offer figures for the “profits”
of merchants. We gross these up in Table 2.

61
 TABLE 2

“Profits” made by number of merchants

November 2006 Assumed avg “profit” (US$) Est total “profit” (US$)

< US$10 7,098 5 35,490

US$10-50 3,592 30 107,760
US$50-100 1,010 75 75,750
US$100-200 797 150 119,550
US$200-$500 671 400 268,400
US$500-1,000 289 750 216,750
US$1,000-2,000 179 1,500 268,500
> US$2,000 152 3,000 456,000
Total (US$) 1,548,200
Total (L$) 418,014,000

For these to be “profits,” Linden Labs would need to have recognized the multiplicity of
accounting polices of 13,788 merchants and successfully consolidated their off-grid activity, non-
cash expenses and working capital finance.
We can test this by comparing the gross totals in column four to the figures below for
the SL economy. The purported “profits” for November gross up to an estimated L$400 million.
This is incommensurate with anything but revenues, possibly after deduction of Linden Lab’s
occupancy charges and other fees.
Linden Lab evidently recognizes the appetite for reliable figures on the topic. A quick
and dirty sense of SL business activity would come from stats on groups formed, disbanded (or
allowed to atrophy, as defined), from inception, broken down by character, showing number of
groups and number of members.

62
TABLE 3

LL Sources September 06 October 06 November 06

Classified Charges 5,029,221 5,555,639 7,039,201

Group Creation Fees 816,300 914,000 1,071,600
Land 2,120,485 4,442,043 4,414,041
Parcel Directory Fees 969,180 1,322,100 1,161,330
Stipends 37,000 56,500 53,250
Upload Charges 7,543,973 8,421,850 9,060,010
Other 17,851,670 15,689,579 67,238,625

LL Sinks September 06 October 06 November 06

Land 89,092 18,180 51

Linden Lab Sales on LindeX 20,117,994 49,728,404 77,327,855
Referral Bonus 146,500 99,000 972,500
Stipends 64,650,550 96,144,850 91,259,100
Other 7,058,261 11,647,366 12,163,922

This is well before we come to the
big issue: the extent and character of the
SL economy as a whole. For the last three
months, Linden Lab has published “Sources
and Sinks,” as follows (Table 3).
“Sources and Sinks” is an engineering
concept. It may sound something like the
accountants’ “sources and applications” on a
cash-flow statement, but this only makes sense
with an accompanying income statement and
balance sheet.
As presented, “Sources and Sinks”
has the effect of combining several economic
concepts generally kept separate. To simplify
matters, SL can be thought of as a self-
contained island, with its own government,
economy, banking and trade.
Fees, land sales, bonuses, stipends
and the like are best thought of as part of the
economic activity of the government. Sales of
Linden dollars should appear in the balance
of payments figures, though in principle they
also contribute to the equivalent of the tier-
one capital of the “central bank.”
“Sources and Sinks” is silent about
private-sector economic activity and banking.

63
 We made our estimate of the former above: L$400m plus of revenues, based on the figures shown
by Linden Labs as “merchants’ profits.”
Banking is just as important, as all premium accounts have savings in Linden dollars, either
in their accounts with Linden Labs, where they notably earn no interest; or on deposit with one of
the SL banks, with their more sporting approach to interest payments.
Everything is made harder by the fact that each month “Sources and Sinks” contains two
large and increasing entries for “Other”; and that no attempt has been made to balance the “Sources”
with the “Sinks”, or account for the imbalance. We will explore this in later articles.
For the time being, let us restate the figures as a scratch “General Government” account for
Linden Labs, combined with the sale of L$, conceptually a source of capital to the “central bank.”
(A discussion on money supply will have to wait.)

64
TABLE 4

September 06 October 06 November 06

Account of Linden Labs L$ L$ L$

Sales of L$ on LindeX 20,117,994 49,728,404 77,327,855

Land sales 2,120,485 4,442,043 4,414,041
Less recoveries (89,092) (18,180) (51)
Net land revenues 2,031,393 4,423,863 4,413,990
Groups 816,300 914,000 1,071,600
Parcel direction 969,180 1,322,100 1,161,330
Classified 5,029,221 5,555,639 7,039,201
Uploads 7,543,973 8,421,850 9,060,010
All fees 14,358,674 16,213,589 18,332,141
Total revenues 36,508,061 70,365,856 100,073,986
Expended as
Gross stipends 64,650,550 96,144,850 91,259,100
Less recoveries (37,000) (56,500) (53,250)
Net stipends 64,613,550 96,088,350 91,205,850
Referral bonuses 146,500 99,000 972,500
Total expenses 64,760,050 96,187,350 92,178,350
Gross surplus attrib LL (28,251,989) (25,821,494) 7,895,636
Add other income 17,851,670 15,689,579 67,238,625
Less other expenses (7,058,261) (11,647,366) (12,163,922)
Net other 10,793,409 4,042,213 55,074,703
Surplus (deficit) attrib LL (17,458,580) (21,779,281) 62,970,339

These figures (Table 4) fail to bear out the recently much-advertised statistic of 40 percent
growth per month. Net land sales were down from October to November. If the figures are
normalized for November’s 30 days, they are up by only 3.1 percent. Should we believe that this
is wholly accounted for by Thanksgiving?
In fact, land sales remain a more or less constant fraction of SL gamers’ personal net
income, that is purchases of Linden dollars, plus stipends and referral bonuses. This fraction was
2.4 percent in September, 3.0 percent in October and 2.6 percent in November. Our figures for net
income exclude trade internal to SL (the more than L$400 million estimated for November), but
this must more or less net out between SL gamers.

65
 “Fees, land sales, bonuses,
stipends and the like are
best thought of as part of
the economic activity of
the government.”
66
 One indicator, group fees, is up
by 17 percent from October to November
and 15 percent per month from September
to November. Such figures are broadly
confirmed by classified advertising fees, up
by 27 percent from October to November,
and 18 percent per month from September to
November. Pretty good, but well below the
trumpeted 40 percent.
We are unable to confirm these
figures straightforwardly from the monthly
stipend, as this was reduced at the beginning
of November. From October to November,
stipendiary payments fell by 5.1 percent
nominally. If we normalize for the days in
the month and make the goofy assumption
that every stipend was paid at the reduced
rate, then the number of recipients was up
by 31 percent. A better guess would be that
the number of recipients rose by around 15
percent between October and November.
Also less than 40 percent.
The sale of Linden dollars shows
extraordinary increases, up 56 percent from
October to November and 96 percent per
month from September to November. As this
excludes off-LindeX trading, such levels must
reflect speculation. It would be impossible
to separate this out (we can’t in the “real”
economy), but it would be helpful to compare
it to accurate figures for current and capital
transactions, best captured in “balance of
payments” accounts.
We have no idea what the final
figure, the balance between Linden Labs’
expenditures and income, really means. The
reversal of November’s gross balance by the
figure for “Other” (and the reversal of the
generally commensurate figures for the two
prior months) makes us particularly uneasy.
We sense we are on shifting sands, dealing
with incommensurate figures that should
not be permitted to operate upon each other
arithmetically.
So what to conclude? We are entitled
to question the quality of the figures presented
by Linden Labs. We may also ask if land is
keeping its hold on the imagination of SL
gamers and if it remains salient to the SL
economy. This matters, as virtual land-sales
are crucial to the business model of Linden
Research itself. Finally, we may ask why
economic growth is failing to keep step with
newbie registrations.
We know less than we should—less
than we could. We want to see more and
better figures. Over the next few months,
we will examine inflation, money supply,
merchants and banking and the generality of
the SL economy.
The editors at SL Business Magazine
welcome comments and feedback from
readers. The magazine would also welcome
industry data from SL businesses. SL
Business magazine’s editors propose to
launch a merchants’ economic forum, so that
readers who contribute data anonymously
can obtain full reports of indices of rents,
consumer goods, economic activity, defaults,
failures and the like. ■
67
L AW

Law
of How to avoid getting scammed

the
Land

D e e e e p W i t t e

70
71
 AFTER LINDEN LAB ANNOUNCED
a price increase on islands in late October,
people flocked to the real estate business,
buying up islands at the old prices. The
practice of buying land and flipping it, or
selling it for more a few hours later isn’t new.
But with opportunity comes greed, and the
search for loopholes that can be exploited,
especially in a virtual world. With this
lowered sense of ethics comes the virtual
scammer. Serious businesspeople can protect
themselves against these scammers.
The simplest scams are directed at
new residents, or “newbies.” Disreputable
Second Life real-estate companies approach
newly registered users on landing point and
convince them that they need to buy land at an
inflated price. The landowner changes names,
transfers the profits and repeats the scam over
and over again. To counter this scam, some
serious real estate firms offer “free” land to
newly registered users. This means new users
do not pay for the land, but only pay the tier,
a virtual form of property tax. Real estate
magnate Anshe Chung and her company,
Dreamland, have used this strategy.
Scam artists tend to proliferate when
the quest for affordable land becomes
desperate. In October, some scam artists saw
the impending rise in land prices and went
to now-or-never practices to get their land
pegged at the cheaper rates. One such scam
was run by Dirk Newcomb, formerly of North
Shores Real Estate. As partner of the North
Shore Real Estate company, he rented two
sims from Dreamland and sub-rented them
out. One of the sims was North Shore, which
was commercial property rented to several
72
store owners, according to Master Quatro,
an Anshe Chung employee. The scam was a
combination of deceit and smooth-talk, but
the normally talkative Newcomb remained
mum when approached for an interview.
Newcomb decided to stop paying tier
to Dreamland. Due to lack of follow-up on
Dreamland’s part and Newcomb’s “the-check-
is-in-the-mail” attitude, he was able to pocket
two months’ worth of rent from his renters
instead of giving it to the landowners.
Dreamland’s Master Quatro said
Dreamland has instituted a new policy to
prevent such scams.
“We have put in place a weekly review
of all full sim rentals and tier payments
and our policy will not be as forgiving for
those who don’t pay on time.” When asked
whether the firm would sue Newcomb for not
paying Dreamland, Master Quatro was more
reluctant. “To try to prosecute people in the
real world, especially when your company is
based in China and the thieves live in United
States can be a daunting task... we have
reported it to Linden Lab.”
73
 Newcomb then turned on his partner, yeochris Bentham.
According to Bentham, Newcomb took $800 USD and an
undetermined amount of Lindens from Newcomb before he
left. For these crimes, yeochris is considering going to court
against Newcomb, but is uncertain on the feasibility.
The problem in this scenario is the renters are hurt the
most. They end up with nothing -- no land and no money and,
worse, no faith in SL. They are dependent on the goodwill
of the landowner or the real estate company. In this case,
yeochris and Dreamland offered the renters an alternative
location for their shops and some weeks of free rent.

74
 To avoid potential scams, business
owners should make sure that all
transactions are documented. Renters can
ask their landlords for notecards or e-mail
confirmations. Make payments using Paypal,
which requires a verifiable e-mail address and
other information from its customers. This
way, businesses and customers have proof of
payment. Payment in Linden Dollars is also
recorded in residents’ account transactions,
but these transactions are in a virtual currency
between virtual avatars, and Linden Lab’s
laissez-faire policy makes it difficult to
resolve payment disputes.
A second suggestion is to ask the
landowner for proof of ownership of the sim.
Do not hesitate to ask this every time you
pay rent. A serious real-estate company will
be happy to identify the owner. Rent-paying
business owners need that bit of security.
Third, paying a small premium to invest in
land from a serious real-estate company can
pay off in the long term. The more established
real estate companies generally offer better
service and more experience. Talk to some
renters and get a feel of how the people
behind the company treat their customers.
As in the real world, caveat emptor. ■

75
76
2006 © Kito Itoku
77
JAPAN IN PINK

桜花の日本

JAPAN IN GRAY

灰色の日本

松里
a new photo exhibit by SONGLI