102907 Electric Sheep And Csi Metanomics Transcript

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Metanomics is a weekly Web-based show on the serious uses of virtual worlds. This transcript is from a past show.

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102907 Electric Sheep And Csi Metanomics Transcript

  1. 1. INTERVIEW: ELECTRIC SHEEP & CSI OCTOBER 29, 2007 57 MILES: Hello, everyone, and welcome to another session for Metanomics, part of the Metaversed series of events that we hold in conjunction with Cornell University’s Johnson School. With us today is Chris Carella from the Electric Sheep Company introduced by and interviewed by Professor Robert Bloomfield from the Johnson School at Cornell. I’d like to take a very brief moment just to thank the sponsors of the Metanomics series and, indeed, all the Metaversed events. They are Generali Group, Cisco Systems, Sun Microsystems, SAP, Kelly Services, and Saxo Bank. The main sponsor of the Metaversed Island, the people who built this and the people who help us do all of the technical things here, is The Otherland Group, making sense of virtual business. And, of course, we couldn’t do any of this without the good people at SLCN. Those are the guys to talk to if you want to film corporate events or any kind of events in the virtual worlds. There’s been a lot of controversy and good discussion over the Electric Sheep’s recent projects, particularly CSI, so without further adieu, I will introduce you to Robert Bloomfield, who will be talking to Chris Carella today about that subject. Thanks, everyone. ROBERT BLOOMFIELD: Okay. Thanks so much, Nick. This is Rob Bloomfield and hello to all of you, not just on Metaversed Island, but also on our affiliate sites. We have several of
  2. 2. those and if you’re looking at the Metanomics chat, you’ll see some SL URLs that you can TP into if you can’t get into Metaversed Island, which is now full. Before we get started, I do want to just mention a couple things. First, we like backchat as speakers. It lets us know that you’re alive out there and lets us keep track of the types of responses that we’re generating, so feel free to type away into the Metanomics group chat so you can just, if you haven’t already, join the Metanomics group and just type in there. And then people on several sims who are not only here, live, seeing this at Metanomics, but also at maybe Muse Isle or Colonia Nova, and they are seeing the feed from SLCN and we can see your backchat as long as you do it in Metanomics. I’d also like to say that, although I try to keep up with the backchat, sometimes it moves a little quickly, and I’m in the middle of talking with someone so, if you have a question you really want to ask our speaker, send an instant message to 57 Miles, that’s 5-7-(space)- Miles. Okay, let’s go ahead and get started with the big event. We’ve got Chris Carella here, Satchmo Prototype. Chris, good afternoon. SATCHMO PROTOTYPE: Hi. Good afternoon, everyone. It’s good to see some old faces in the crowd here and some news ones as well. ROBERT BLOOMFIELD: Yeah. It looks like a pretty good crowd today. I think people are pretty interested in--really, there are a couple big topics that make this great timing for this event. One is, of course, the CSI build and the other is the release of what I believe is the first major viewer that uses the open source code Linden Lab provided. And so those are
  3. 3. going to be two of our big topics today. And then we’ll also talk just more generally about the business that Electric Sheep Company is in and, you know, your business strategy and how you see the future. Before we get into all of those, Chris, just tell us a little bit about yourself and how you ended up at Electric Sheep. SATCHMO PROTOTYPE: Sure. I won’t go too far back into the dark ages of history, but I found Second Life in 2004. I started using it professionally at Dartmouth College doing research projects early in 2005, and Dartmouth just wasn’t that interested in supporting virtual worlds’ work at the time and so I had left Dartmouth and started my own small consulting company, called Future Prototype. It was a very small amount of business, but it was pretty groundbreaking considering there wasn’t a lot of business at the time. We he met up with at Future Prototype, the three of us had met with Sibley and Jonamia(?) and Jerry Paffendorf of the Electric Sheep Company in December of ’05, maybe, and it just made a lot of sense for us to merge our companies. They were three people at the time and we were three people at the time and we came together and had this little six person startup called the Electric Sheep Company. ROBERT BLOOMFIELD: Okay. Actually, let me just ask you about your name, Satchmo Prototype? Where did you come up with that one? SATCHMO PROTOTYPE: Sure. That’s a good question. I don’t remember much about the
  4. 4. night I signed up in Second Life in August 2004, but Prototype was just a great name for what this world is and what I was trying to do, so that was very obvious. Satchmo just comes from my love of music and love of jazz. I likely was listening to Louis Armstrong at the time, and that’s the name I chose. ROBERT BLOOMFIELD: Right. So those who don’t know, Louis Armstrong’s nickname was Satchmo, which my son, a trumpet player, tells me came from “satchel mouth” because supposedly he had a very big mouth when he was a kid, in many ways, so that’s at least my understand of that one. Okay. Let’s start, I guess, in with this CSI build because there’s been so much media interest in that. So I’d like to start with just a very basic question which is--I mean, I know the TV industry, Hollywood--the whole business is very complicated and there are so many people involved in every project. So my question is who exactly did you start talking with on this and who exactly is your client? SATCHMO PROTOTYPE: Sure. CBS is an investor in the Electric Sheep Company. They invested in--early this year, actually, in January, and so we have a pretty good direct line of communication with the folks at CBS all the way up to Quincy Smith, who was there. He’s the new media czar at CBS. And so, we were invited into a meeting to discuss what CBS might want to do in the virtual worlds. We really are big supporters and love convergence culture and transmedia storytelling and so we were telling them it would be great to find the right CBS property to write Second Life right into the storyline and to drive users into an experience.
  5. 5. They pretty much immediately pegged CSI: New York and, specifically, Anthony Zuiker, as the one who would be great for this. And part of that was because of Anthony Zuiker’s love for trying out new things and experimenting with new technology. And he’s quite tech savvy. And the CSI audience has historically followed some of their new media initiatives that they’ve tried. That’s basically the very beginning. It was starting pretty high up at CBS and discussing just thermal ideas about transmedia storytelling and convergence culture, and then they had suggested that CSI was the way to go. ROBERT BLOOMFIELD: Well, I was just, I’ll say, reading political advice from Chris Matthews, who has written a new book, and he says the best way to get people to give you money is to get them to give you money the first time. So it sounds like you might’ve followed that model getting CBS to invest in the company and then that gives them the confidence in the buy-in to take the next step. You are the chief creative officer at Electric Sheep Company and a lot of companies don’t even have a chief creative officer. So I’m wondering if you could tell us, generally, what your position is and then, more specifically, what your role as chief creative officer was in the CSI event? SATCHMO PROTOTYPE: Sure. Like I said before, when I joined Electric Sheep there were six of us. And when you’re a six-person startup, everyone does everything. And so for a two
  6. 6. years now I’ve basically been involved a little bit with everything and, as we’ve gotten bigger and some infrastructure and support has grown around us, I’ve been able to focus a little bit more on what we call being the chief creative officer or creative director, and that largely entailed designing projects. Often it’s designing it at a high level in the sales phase, supporting business development and kind of coming up with the big ideas that our partners want to go into Second Life with and sometimes getting fairly detailed into that. We’ll then sell the project with a statement to work that has those big picture ideas. We then pass it off to a design team inside Electric Sheep and often it’s the team that’s going to be working on this project and, actually, the builders and scripters and producers involved. And they kind of take it from there and design really the specifics and all of the nitty gritty. I’ll help out; I’ll help review some of the design documents that come out of that phase but, ultimately, a lot of the low-level design--the sim layouts, the interactive objects--a lot of that comes from a lot of other people at the Electric Sheep. So I would say mostly it’s pre-sales and business development support and generating some of the creative ideas that we have at Electric Sheep. Specifically for CSI, I came into that meeting with the idea of transmedia storytelling, and I knew this was something that we really wanted to do and that we thought would really be popular in a virtual world. And so I started with that very high level and then, as it moved forward, I got to talk to Anthony Zuiker and the folks at CBS and really helped them define
  7. 7. what this transmedia experience was going to mean. ROBERT BLOOMFIELD: Okay. I don’t know if you can talk about this, but how much money did CBS end up putting into this effort? SATCHMO PROTOTYPE: That’s interesting. I don’t think I can actually say that. I can say that the overall cost of this project was really actually just a fraction of what a normal episode of most major television shows cost. So it was less than the cost of your average television episode, and maybe that’s the best I can do. ROBERT BLOOMFIELD: Okay. Well, that is helpful. I’m sure we will see the back chat lighting up shortly with people Googleing “Average Cost of Syndicated Telephone Show Episode.” Good luck, guys. I look forward to followup, more detailed, probing questions in about ten minutes. So let me follow up, though, a little bit on that. So we’re still not talking pocket change, and I know that corporations always are very careful in how they spend their money. You’ve talked about the creative side of the pitch, but there’s also the financial side. What types of information did they feel like they needed from you in order to bring this to the higher levels, to the decision makers, and what is the nature of your sales pitch, other than, “Boy, this would be really cool”? SATCHMO PROTOTYPE: That’s a great question. We can share with them some of the anonymized data of our projects in the past. And so we have a lot of metrics in our past projects and we’re often able to share that in the sales phase. Ultimately what they were
  8. 8. looking to do was just find new ways to engage their fans beyond the television platform and really continue to extend CSI as a cross-platform show. So this actually wasn’t such a hard sell since they’re looking to do this kind of stuff across multiple platforms--across the web, across mobile, Second Life. And so-- ROBERT BLOOMFIELD: So this is sort of like a proof of concept, almost? SATCHMO PROTOTYPE: Yeah, there’s no doubt that we are still in the very early days of virtual worlds and the Metaversed so, while this is completely production quality, and it’s certainly a testament to what can be done between television and virtual worlds, I wouldn’t call it a proof of concept as much as just the very first project involved. It’s a learning phase for all of us. How many people go from TV to the web, and then how many people go from the web to downloading the software entering the world? I mean, it was a learning experience for all of us actually. ROBERT BLOOMFIELD: Okay. So you still have to go back to them and tell them whether it has succeeded. And I’m sure we will start talking about numbers; hopefully I will get you to make some comments on numbers. But before we go to what actually did happen, when you went into this, how were you planning to measure success? What did you promise them that you would be measuring and reporting on so they could assess success? SATCHMO PROTOTYPE: Sure. I maybe can define a few things. One, clearly, people are interested in the numbers, the pure numbers of people who have made it to the location and, even more so than that, the average length of stay residents have once they get to the CSI sims. In our media projects across the board, users spend more time with the media
  9. 9. property in a virtual world than they do with the television show on TV. And we’ve seen that multiple times over, and it’s certainly true so far here. Another big successful one was actually making some money and, if you go to the CSI: New York SIMS, you’ll see that Cisco has a presence, and so there is some Cisco sponsorships, and we’ll continue to bring new sponsors and products placements online to actually make this a financial success for CBS, not just a success on numbers and experimental projects. I think ultimately the proof is in the finances in that we’re going to see some return on investment in this project. ROBERT BLOOMFIELD: Now, are you able to talk at all about how you divvy up sponsorship revenues? SATCHMO PROTOTYPE: Sure. I mean it certainly changes project-to-project. In this project we charged CBS what it costs us to integrate and build these sponsor objects, and they’ve taken all of the money above that. So I actually don’t know how much they sold the sponsorship for; I only really know how much they paid us to build it. And so even the sponsorship in this case is like our standard relationship with most clients, which is they pay us to build things for them. ROBERT BLOOMFIELD: Okay. And then they are taking advantage of whatever traffic they get? SATCHMO PROTOTYPE: Yeah, exactly. And in this case they actually were able to
  10. 10. package it with some television promotion, so the Cisco telepresence aspect of this is actually in the episode and was advertised in 30-second spots. So it wasn’t so much sold as packaged media, but the two of them definitely influenced each other. ROBERT BLOOMFIELD: Okay. I know that you can’t talk about specific numbers, but you indicated to me you might be willing to respond to various speculations that people have made about how successful this has been in its first week. And so, I have seen numbers range--one is Tateru Nino, who regularly tracks overall concurrency, overall new signups, noticed that there were, I think, tens of thousands of additional signups, and concurrency has hit a record in the last week. Do you want to take credit for that? SATCHMO PROTOTYPE: That’s funny. I certainly can’t talk about CBS’s numbers and their private numbers, but what she is reporting on Second Life Insider is very representative of what we’re seeing. And so if you look at her numbers--and anyone can do this and I encourage you to do so, is to go through Second Life Insider and check out the number of registered users from Wednesday 10/17, to Sunday 10/21, and compare that with the registered numbers of users from 10/24 to 10/28. That’s the Wednesday through Sunday time periods, one before CSI aired and one after CSI aired, and you’ll see that there’s actually a dramatic increase in total registered users. Now, I’m not going to take all of the credit for this, as The Office aired the night after. And we know that there are some people in Second Life now because of The Office, but we have roughly 126,000 and change--more users than would’ve been projected had CSI not aired.
  11. 11. ROBERT BLOOMFIELD: Well, I would also like to point out that we had a great Metanomics show last Monday on taxation, so I’m sure we account for nearly a third of that ourselves. SATCHMO PROTOTYPE: You know, there’s something else very interesting about the numbers and somewhat took us all by--the Electric Sheep and the community as well--by surprise and that’s, right after the show, Wednesday’s numbers, they were okay, but they weren’t fantastic. And so while we all expected, in some sense, a flood of users coming in, what actually happened is on Thursday, we had a lot of users and then Friday, Saturday and Sunday the numbers continued to be pretty high. And so it’s a prolonged effect of people logging in days after they’ve watched the show. Now, I can speculate why I think that is. It’s mostly that the show ended at 11 p.m. and, besides, for us really hardcore net geeks, there are not a lot of people who want to use their computer at 11 p.m., when they’d rather be sleeping. So it’s just interesting that if you were waiting for that onslaught which did not come Wednesday night, it actually--the numbers, which are pretty good, are distributed across all of the hours since it aired. It’s pretty amazing, actually. ROBERT BLOOMFIELD: Yeah. And now, there were some log in and sign up server problems, as well, during the launch. Did those affect you?
  12. 12. SATCHMO PROTOTYPE: Yeah. We certainly think that affected a little bit and what our main problem there was--the download was actually the biggest issue. Our file was hosted on Amazon’s EC2 servers, which couldn’t handle the load the way we had it set up, and so we pretty quickly switched it to Amazon S3 servers, which work fine. But we did have about an hour of glitches And what you would’ve noticed, if you were watching the Linden Lab homepage is, during that same hour, Linden Lab had a huge jump in traffic. And so our speculation is that some people were actually having trouble getting in through the CSI site, but may have went right to Linden Lab and downloaded Second Life and registered anyway. ROBERT BLOOMFIELD: Okay. Yeah. Now, I have a question from Burlyn Loon(?) who, I believe, is at one of our affiliate sites at Second Life. And the question is, “Everything that you’ve been talking about really has been related to in-world visitation metrics. Are CBS and Electric Sheep--are you guys also looking at increases in hits to the web sites controlled by either of you, or do you view those as either relatively small or relatively unimportant?” SATCHMO PROTOTYPE: Well, they are certainly interesting. To me, they’re more interesting just as a case study. How many people watch TV, hear about something like Second Life, and then reach the web site? I mean, that’s a really interesting and important number to know moving forward so that we could really gauge how many sims we need for these kinds of events. I think, from a monetization aspect, the Electric Sheep is not so interesting. We’re not
  13. 13. monetizing any of the web sites. CBS certainly has advertisements on their web site, so I’m sure they’re interested in the increase in traffic for an advertising venue, but we’re not as interested that way. And I know about what happened on the web than what happened in- world. You know, something else that’s interesting and not unheard of, but our sales or the user’s sales who list objects on Shop OnRez, that went up pretty dramatically, actually, over the course of the course of the week. So a lot of people were either becoming aware of Shop OnRez through this, or were using the new viewer that has a shop button to go and purchase online. ROBERT BLOOMFIELD: Okay. I guess before we get into those issues, let me just ask you a last question on, specifically, the CSI partnership. I know it’s early and so far it sounds like you’re feeling that this has been pretty successful. If you had something that you could’ve done differently, what would it be? SATCHMO PROTOTYPE: That’s another good question. Certainly we did have about an hour of some technical issues, handling the load, and that won’t happen another time around, so that’s a big difference. I’m not really sure what I would’ve done differently. The one thing that always, always helps a project like this is promotion, and more promotion would’ve been great. I mean I think we did a sufficient amount of promotion running two 30- second spots on television, but we didn’t actually do a great job of reaching out to some of the social networks like Facebook or MySpace, so maybe I would put more of a promotional angle in those social networking technologies than we did.
  14. 14. ROBERT BLOOMFIELD: Yeah. How about with the build? Queen Coronet actually asks why you chose to stick with relatively traditional buildings, façades and so on, rather than really pushing the limits on SL builds? SATCHMO PROTOTYPE: Sure. One, there is certainly an aspect of that to try to really keep up with the CSI: New York brand, and that’s really important here. And so New York was the obvious bid for this project. I’m really trying to make the colors all really fit what they see as their style guide, and so there was a lot of that. We also did this really quickly, so there is certainly the issue that the more time you have the more creative and different you can get. And so we pulled off something pretty big in a pretty short timeframe. ROBERT BLOOMFIELD: Okay. Let’s talk now about the OnRez Viewer. And so this is--for people who are not aware, Linden Lab has server software and they have client software, which they call their viewer, and they have--a while ago, they open-sourced the client side code and so, in theory, that allows just about anyone who wants to, to build their own custom viewer that still integrates with the server side software. Now, my belief is that OnRez is the first major viewer out there using this code? Am I missing someone? SATCHMO PROTOTYPE: Yeah. I don’t know how you define “major,” but there are a couple of really great open-source developers who have their own versions of the Viewer. One is the Nicholas Viewer, which is actually quite popular.
  15. 15. Ours--and I hesitate to use the word “first” for anything, as these virtual worlds and even Second Life is so big, that you never really know. I believe that we think that we’re the first commercial version of the Viewer. And so we have a license with Linden Lab that allows us to distribute this as a commercial product so that it is not open-source. And a large part of that is because a number of the libraries that are in the Linden Lab Viewer, from the JPEG library to the Viavox libraries, those are closed-source, and so I’ve made it really hard for us to release an open-sourced version while having some closed source aspects of code. And so we came to the decision that, “Well, let’s just license this as a closed-source project.” And that’s what we did. So I think we’re the first commercially available Linden Viewer, but we’re certainly not the first viewer that has come out of this opened source movement. ROBERT BLOOMFIELD: Yeah. Okay. So I’ve got three basic, strategic business questions for you on the Viewer, and you can take them in whatever order you’d like. The first is, “What’s the revenue model? How is it that you are going to get cash coming to you, Electric Sheep Company, from creating the OnRez Viewer?” The second is, “What’s the value proposition to the consumers? Why should they be going to use your viewer instead of Linden Lab or a competitor?” Which brings up the third question. “You know, really, to make money in doing anything you
  16. 16. have to have some sort of barrier to entry, something that makes what you’re providing scarce so that you could get some economic rents from it.” Again, in any order you like, it’s, “What’s your revenue model?” “Where is the money going to come from?” “What’s the value proposition you’re providing to the consumers?” And then, finally, “What are the barriers to entry that are going to keep others from simply doing what you just did, but maybe better and cheaper?” SATCHMO PROTOTYPE: Okay. Cool. I’ll try to answer those and then you can remind me which one I forgot. But the main goal is--what we’re trying to do is make virtual worlds and, in this case, Second Life, easier to use and more mainstream-appropriate. And so that comes with a suite of information services we’re trying to create to enhance Second Life, like shopping and potentially a new group system, because the current group system is actually not that easy to use. And we view the Viewer as just one way for people to grab these information services, so we have a Viewer, if you could imagine, consuming this content via a cell phone, on the Web, through the world, as PRIMS or heads-up displays. Ultimately, I think the value proposition for the user is that we’re trying to create, on its first level, in this first version of it, something that we think is more user-friendly. It has a web browser like paradigm so brand these--it’s a piece of software that they feel more familiar with, and for Second Life users as well. It’s a cleaner place. It has only the buttons you need necessary. Various parts are collapsible so it gives you more screen real estate. And so, in the short term, in this version, I would say it’s much easier to use than the current Linden Viewer.
  17. 17. In the longer run I think we will do things like maybe enhanced search or enhanced group systems, aspects that just make it much easier to go through your Second Life. And it’s much more social tools that by using our Viewer, you’ll just be more connected with other Second Lifers. So that’s one, too, in the monetization strategy. I am not a part of the viewer team and, certainly, Giff Constable is the better person to speak about this. But from my perspective it is, in some ways, the aggregate eyeballs. And you can see on Mozilla--the Mozilla Foundation was doing really great by selling their homepage to Google and there are certainly aspects like that. While our Viewer can help get people to our shopping site easier, which then translates into more eyeballs across our properties, I think that’s really where the monetization is. I mean, if you notice now there is currently very little monetization. We don’t really have advertising in the Viewer, there’s no advertising in search, there’s no advertising in shop. But we’re still at the very early stages of user acquisition. ROBERT BLOOMFIELD: Okay. One of my questions was about barriers to entry, and I have some questions here from, actually, a variety of people about the possibility that you would get “gommed,” as they say and, as I understand the etymology of this word, there was a company named Gom--G-O-M--and they did something new and provided some mechanisms for, I believe, trading Lindens. And as soon as they got successful, Linden changed what they were doing and basically took over. You know, they were able to take the business proposition and do it themselves and, of course, they can easily funnel all the traffic. So do you worry about getting gommed by Linden Lab, who could simply look at the
  18. 18. innovations that you’ve created and say, “Oh, we can do that in our viewer”? SATCHMO PROTOTYPE: That’s a great question. If you’ve noticed, there is actually a new Linden Lab viewer in the pipeline that actually looks a little bit like our viewer which I believe is completely coincidence. But we’re ready to compete on merit. What happened with the gaming open-market guys is they wouldn’t compete with Linden Lab, and so they folded. And we’re not going to do that. We actually hope that Linden Lab creates a better default viewer, and we’ll continue to evolve our viewer as well. And so, if that’s the case, we’re ready to compete with the open marketplace and believe that we can create the best viewer. ROBERT BLOOMFIELD: Okay. This is a little off subject, but I have a question from Fiona May, whom I believe is with Sun. She says, “It is reported on a YouTube video that Electric Sheep has been acquired by CBS. Can you comment on this?” SATCHMO PROTOTYPE: Yeah. I saw that video as well. The video itself is actually great. That one comment is completely wrong. We haven’t been acquired by them, and we’re not discussing that with them and there are no plans to be acquired by CBS. CBS, they’ve been vested since the beginning of the year, and I think someone just got their terminology confused. ROBERT BLOOMFIELD: Okay. So they have a minority interest; is that right? SATCHMO PROTOTYPE: Yeah, that’s true. That’s right.
  19. 19. ROBERT BLOOMFIELD: Okay. Now, I’ve got no end of questions on an issue that you’re probably expecting regarding the viewer, which deals with advertising and search. And so the question here is, “How should people with in-world businesses in Second Life be viewing what is kind of like a proprietary search model or a proprietary Yellow Pages that you guys control? As you’ve indicated, this is part of your revenue model that you’re expecting to be able to direct people to your businesses, to your land. Do you have a response to these types of concerns?” SATCHMO PROTOTYPE: Sure. First I’ll say if you check out the OnRez Viewer today and you go through a search, it’s completely Linden Lab’s search system, so there is no place where we’re directing users to sites; it’s how Linden Lab ranks the pages. And Linden Lab is coming out with a new version of search, which will be more accurate. And it’s very hard to compete with Linden Lab on search because they have the data and the best we can do is go around the grid and try to collect the data. And so it probably won’t be in the short term where you’ll see us competing directly with Linden Lab on search. So that’s what I’d say right now. It’s still Linden Lab who has ranked it. What we hope to do in the future is be able to add value to search and so, if someone searches “red dress,” and Linden Lab has the red dress and it comes up, perhaps we would know what the top-selling red dresses are on Shop OnRez and serve them, since we know that will enhance the user experience. So ultimately we’re still trying to enhance the user experience, and we’re not really that interested in directing people to our in-world properties as much as we are our information
  20. 20. services. And so we would never rank CSI: New York over a resident business who gets better traffic or has better numbers or more relevance just because they’re our client. ROBERT BLOOMFIELD: Okay. Yeah. When you talk about what’s going on right now--and, actually, there’s been some discussion of this on the various blogs--as I understand it, if you type information into the search window, you get--it’s basically the same as “search all.” Is that right? SATCHMO PROTOTYPE: Yeah. That’s how it works. ROBERT BLOOMFIELD: And then you have to sort of figure out that there’s a button to click to drill down so that you can search people or land and so on. I, personally, actually, have always been frustrated with searching in Second Life and, in particular, “searching all,” to me, has been more or less a waste of time, because I can never find what I want that way. So I guess I was a little bit surprised by that decision to make “search all” the default, and was just wondering if you could talk about the reasoning behind that. SATCHMO PROTOTYPE: Sure. I agree. There is a few things I’ll tell you there. One, searching in Second Life today is not a satisfying experience. Beyond that, searching in virtual worlds is a fascinating problem and a fascinating problem set, so I can’t wait until we see things more creative than what the current Linden Lab search does and maybe things that can really identify what objects mean. So there’s certainly a rich, interesting feel for
  21. 21. virtual world search, which I’m sure there are lots of people working on right now. I think we chose “search all” because we had to choose our poison at that point. We really wanted to have “search” in the top like it is in a Web browser, and we’re certainly under the gun for deadlines and we took that as the lesser of the many evils of, “Well, we have to display something so should we just go ‘places’ or ‘people’ or ‘classifieds’ or ‘search all’?” And “search all” seemed the fairest thing to return. Although I agree with you; it’s not the greatest user experience and, hopefully, we’ll be working on that in upcoming release. ROBERT BLOOMFIELD: Mm-hmm. Now, you basically bundled the release of the viewer with this CSI event, but they’re really completely different businesses and business plans. So I was wondering why you chose to do that. SATCHMO PROTOTYPE: Sure. And that’s actually a really important point, is that the viewer is our technology and so, while today, when you launch the viewer and you get a splash page that is very CSI-branded and then, when you log in, you get a green page that is very CSI-centered, all of that right now is OnRez play to make it easier for the users we’re expecting. And so, again, that’s just more about usability than it is branding CSI all over those properties. The decision to launch them at the same time, it just really was a great distribution method, and we certainly do have a mountain to climb when it comes to distribution with this viewer versus the way Linden Lab gets to distribute the viewer. And so if we’re able to use our media partners to help us distribute our viewer, that’s just a net win for us.
  22. 22. I’d say that we want everyone to distribute our viewer, and so anyone out there who has their own Reg Portal which offers a viewer that you can download, you should contact us, because we would love to work with people to make sure that viewer downloaded was our own. And we think the benefit to everyone is an easier user interface, better retention, and a smoother SL experience. ROBERT BLOOMFIELD: Mm-hmm. Okay. I’ve got a question from Garreth Koonwa Aquamina Kalifa(?)--I didn’t know you could have four names in Second Life--but the question is, “There are a lot of ways to get involved with improving the default Linden Lab viewer, through bug reporting and providing ideas on the Wiki and so on. Is there a way that residents can interact with you in helping you tweak the OnRez Viewer?” SATCHMO PROTOTYPE: That’s a really great question, and I direct anyone who’s really interested to send an email to contact@ElectricSheepCompany.com, and we’ll make sure it gets to the right person. Although we share a common code base with Linden Lab and, in fact, where there have been reports of our viewer being really fast or our viewer being able to run the scripts really fast, we actually almost have an identical code base to Linden Lab at the moment. And so by any contributions people can contribute to the Linden Lab viewer, that will help us all overall. And so I would still encourage people to work on the open-source project and help out Linden Lab, and we’ll be watching. ROBERT BLOOMFIELD: Okay. I’d like to move on a little bit to more general issues, as you
  23. 23. see it at the Electric Sheep Company, of working with these big corporations who are coming in to Second Life and other virtual worlds as well. You know, you guys have been pretty successful in making the pitch to large corporations to take a flyer in this new technology and this new environment. And so I’m wondering if you could just tell us a little bit about what you see as being the big challenges to landing these types of clients and bringing them here? SATCHMO PROTOTYPE: Sure. First of all I’ll start off by saying that--as all of my developers jumped on me and said that we have a support page at support@OnRez.com and, if you really want to get involved, you should check out that page, support@OnRez.com. Now, the question was about the difficulties in selling these projects; is that right? ROBERT BLOOMFIELD: Yeah. And just more generally talking about the Electric Sheep Company business model and how you get people to, again, take a flyer into this new world. SATCHMO PROTOTYPE: Sure. We’ve been really fortunate, especially in the early days, of having a lot of people reach us and, I assume, through reputation, people come and at least give us a shot to bid on their business. And so getting our foot in the door has actually been easier for us than most startups, I believe, as a lot of people have been seeking us out, which has been really great. Our general approach is this. We get contacted by someone--actually, a variety of levels within an organization. And we can get contacted from the summer intern all the way up to,
  24. 24. you know, the SVP or the chief marketing officer or someone very high in the organization. And it always amounts to the same process, which is we come in a first time--and it’s a lot of education--and we spend a good hour just cruising around Second Life. We won’t talk about their business. We won’t talk about their goals or what their branding means or any of that stuff; we just show them Second Life. And we take them from project-to-project and we show them successful projects and we show them unsuccessful projects and we show them resident projects versus corporate projects. And we’re really just spending an hour getting their appetite wet by teaching them about Second Life. We often come in for a followup meeting. There are sometimes a number of these education meetings as more groups inside an organization get interested or people’s bosses get interested, but there is certainly a period upfront which is pure education. From there, we’ll then try to have a strategic meeting where we start to talk about what their goals are, what Second Life is really good at, and how the two of those can come together, as well as understand what their expectations are and, in some cases, set their expectations, but we know this is a world of really 500,000 to a million active users, not the 9 or 10 million users that are being reported today. And so we’re very upfront with everyone. In some cases, companies are looking to monetize--and we’ve seen some of that with sponsorship--but the L Word was able to monetize with sponsorship; CSI: New York was abl to monetize with sponsorship. But for a lot of people it’s still that very early stage of experimenting with this new medium. A lot of people wonder if they would’ve got into the web earlier--these big companies especially who were very slow to get to the web. They were passed by by these start-offs, and if Barnes & Nobel had been on the web before Amazon, would Amazon have cruised right by them?
  25. 25. And so, most of our clients have taken it from the angle of “Let’s learn about this new medium,” and we’re here to help them learn and look at the numbers and show them what has worked and what hasn’t worked and case studies of their projects and other projects as well. ROBERT BLOOMFIELD: Okay. Let me pick up on a couple of things that you said. You referred a couple of times to successful and unsuccessful projects, that you take them to tour, and you also talked about what Second Life does well. And so I’m wondering--and here I’m going to press you to be specific. Can you talk about specific projects you would take an educational tour through to show success and what Linden Lab does well? And then, also, lack of success and what types of things don’t work in this environment? SATCHMO PROTOTYPE: Sure. Well, I’m not going to talk about projects that are unsuccessful and slam-- ROBERT BLOOMFIELD: You will. I will work on you. SATCHMO PROTOTYPE: But I will talk about some of the projects that I think are great, although to define success is really interesting because, while we know that in 2006 we were certainly a part of building many of those ghost towns that the media just loves to write about, a lot of those companies viewed their projects as successful because of what they were ultimately trying--but what the success metric was to them was, “Let’s learn about this virtual world and let’s make mistakes and let’s do things correctly.” But to answer what I
  26. 26. think are great projects, certainly the work Campfire Media has done with Motarati is really fantastic. They’ve built a real community. They leverage the user creation aspect of Second Life better than most companies that have come into Second Life. ROBERT BLOOMFIELD: How have they done that? Can you talk a little bit about that? SATCHMO PROTOTYPE: Sure. Motarati, it’s a project by Pontiac and what they’ve done is--now, there are seven sims--but they buy the sims and they don’t put up lots of official Pontiac-branded venues. What they do is they offer those sims--or they offer parcels of land to people who are interested in car culture in Second Life and want to build out a business or want to build out a club or something to do with car culture. And so they accept proposals from residents who say, “Hey, I want to open up this club about cars” or “I want to open up a race track or drift racing,” and then they allocate land to these people for free. And it’s really great. So what you wind up with there is that a lot of the promotion happens by the residents because the guy who built a race track, who holds a race every Friday night, he’s out there promoting the race track because he wants his own business to be successful. And, therefore, a lot of traffic gets driven to the Motarati sims. And so that’s a good example of using the user creative content in Second Life and really encouraging people, “Hey, if you want to create stuff about cars, well, here’s some free land to do it here, and be surrounded by other entrepreneurs who are also interested in car culture.”
  27. 27. ROBERT BLOOMFIELD: Okay. If I were to get you to venture some opinion on unsuccessful projects, then, it sounds like--so you like user-created opportunities to generate some community involvement. So I guess we’d be looking for some type of build, which is really just a lot of static content, right? Great architecture, nothing to do, no people? Is that what you think Second Life doesn’t do well? SATCHMO PROTOTYPE: Yeah. Well, maybe it’s easier if I talk about two other successful ways to go about things. ROBERT BLOOMFIELD: I’m sure that is easier, Chris. SATCHMO PROTOTYPE: Yeah. And then I promise to answer your question. But another great way to do it is to build a community and I think the L Word does this very well. The L Word, which is based off--it’s really for the fans of the Showtime show the L Word--has a great community there and a great community following, and part of it is just baked right in. They have common lifestyle choices, they love the same show, they have shared experiences. And so that’s another example of a successful project, so that community building is really hard from scratch. Resident sites have done it really well. Places like The Shelter and The Elbow Room have done a really great job of that but, for companies, it’s pretty hard because there’s not always a built-in community around company acts, and it doesn’t always make sense to have a community build. From that, I’ll go on and say that traffic and people are not everything, and Reuters is a pretty good example of that, where Reuters has taken a distributor approach and, really,
  28. 28. they take advantage of the fact that Second Life is this huge grid of people all the way on the network’s edges, and they distribute heads-up displays that lots of people use as well as little new signs that people can put on their own land. And that’s actually proven pretty successful to them, and their numbers are very big, so it’s not all about traffic and people. If you look at a place like Reuters, you might think, “Well, oh, there’s not always a lot of people there and there certainly doesn’t seem to be a community building and there is no use of creative content.” But there’s a lot of people who are consuming Reuters content all over the grid, which is great. And so what I think doesn’t work is, yeah, creating beautiful architecture, having very little value to add to the community, not having--I mean, just trying to replicate your real-life products in a virtual world, it’s not actually the same strategy, and so you have to think about where would Second Life do good. It’s 3D, it’s very social, and people are really creative, and there’s a lot of stuff out there you realize that just isn’t the case. You know, that’s not how it was designed. ROBERT BLOOMFIELD: Mm-hmm. Okay. I’ve got a backlog of questions that have been building up, and so I’d like to just go through these. We don’t have a whole lot of time left, so I’m going to basically be opening it up to our audience and conveying their questions. Those of you who are listening, this is your last chance to ask questions. You can IM them to 57 Miles, 5-7-(space)-MILES, or you can try to just pop them in the Metanomics chat window and hopefully I’ll be able to see them there.
  29. 29. One question, this comes from Sejonny Koon(?): “What do you think of the IBM-Linden Labs collaboration towards interoperability? They published an announcement a couple of weeks ago that they were going to be working together to address some technical issues and interoperability.” SATCHMO PROTOTYPE: Sure. While I’m not on the inside of those meetings and those conversations, I think any move towards opening protocols is a great move and, hopefully one day, virtual worlds will be compatible across the board. I think they certainly have a major task in front of them, and not so much in defining what the Second Life protocols will be--because I think they can do that and I think they can make sure open sims stays nicely with the Linden Lab grid. What’s going to be a harder task for them is to convince the other companies--the Multiverses, the Ickeris and the Aerias(?) out there--to use their protocol. And so, hopefully, as an open organization--you know, IBM and Linden Lab and hopefully they’ll bring in other folks--they can come to consensus pretty quickly. I’m always very skeptical of industry working groups because I personally just like to do things instead of talk about things. And so I love the notion of having opened protocols, and I think it’s a really great start and something that is totally necessary. So I definitely support those guys. But they certainly have a very big hill to climb. ROBERT BLOOMFIELD: Mm-hmm. Okay. Let’s see. I’ve got a question on the viewer from Wiz Nordberg, who actually is heading up our SLCN.TV team. Kudos to them for making the wide distribution of this event possible. The question is, “How is it possible to release a
  30. 30. proprietary version of a viewer that has such a major open source component?” Because, “under the open source license,” Wiz goes on, “isn’t it a legal requirement that you make your changes available to the public, at least in part, and then doesn’t that make it easy for other people to duplicate what you’re doing?” SATCHMO PROTOTYPE: Sure. I’m not the expert at Electric Sheep who spoke with Linden Lab and made this happen, but I actually do know a lot about GPL and the way software licensing works. And ultimately Linden Lab--they own the license to all of their software and while they released their software under the GPL--which those require everyone whoever uses that to contribute their code back into the open-source community-- they can have a dual license. And so they still maintain a proprietary license on their client as well as an open-source version of their client. And so they have every right in the world to sell the code that they own as a proprietary version. So the way I understand it is that others who have contributed to Second Life patches, I believe they sign over their code to Linden Lab, which is a pretty standard thing to do for big, open-source projects like Second Life. And therefore, Linden Lab can redistribute that as closed source if they want. So if you Google “dual licensing,” I think you’ll find a wealth of people who, on one hand, have a GPL product and, on the other hand, sell closed licenses of it. ROBERT BLOOMFIELD: Okay. Let’s see. I just got a question on whether you are holding focus groups on the usability of the CSI experience. I would take that as meaning both the viewer and also just the experience that people are having as they go through those builds.
  31. 31. Are you guys actively working on trying to assess the individual consumer’s experience? SATCHMO PROTOTYPE: Sure. I mean there are multiple ways to answer that. One is we were just so happy to get it all launched on time anyway. ROBERT BLOOMFIELD: Yeah. Now, you can go take a vacation, huh? SATCHMO PROTOTYPE: Yeah, right. And so now we’re putting that stuff in place, and we certainly are really interested in evaluating the user experience, both at a software level, and an experience level. And we do this a little bit with all of our projects. So it probably won’t be very long before we have focus groups surrounding the experience, as well as the software itself. So it’s not something that I can say we’re actively doing today, but we’re certainly really interested in it and have done it in the past, and we’ll probably spin that up shortly. ROBERT BLOOMFIELD: Okay. Can you talk a little bit about Electric Sheep and you, personally, moving outside of Second Life and looking at some of these other platforms-- Caniva(?), Forterra, Metaplace(?), you know, who knows which other ones are going to be coming up soon, but right now, I guess, there, the MTV worlds are probably big ones. What are your activities there currently, and your plans for the future? SATCHMO PROTOTYPE: Sure. For a while our biggest project has been on the there.com platform, and I’ve been working with them to build their MTV boroughs. And so while we see ourselves as platform-neutral. And I personally really believe in the best tool for the job. A majority of our projects have been in Second Life, and a lot of that is because sometimes
  32. 32. Second Life is the best tool for the job. We’ve been evaluating all of those other technologies and have been talking with senior management across the board on all of the ones you’ve mentioned, as well as--I would throw in Ickeris, which is a really interesting new platform out there. ROBERT BLOOMFIELD: Okay. SATCHMO PROTOTYPE: When the right projects come along we will make them fit. Largely, if you have a budget of less than a million dollars, Second Life is a really good fit for you because the world’s already there, there’s not too much code you really have to write, the people are there, so user acquisition is a little bit easier. But there are a lot of people who are interested in their own closed-wall garden like MTV does and that’s where a lot of these other platforms really shine and come into play. And what’s interesting is we’re seeing a lot more interest in that. So in the first two years of Electric Sheep, a lot of people had those smaller marketing budgets and they used to joke around and say it was around their marketing budget and they wanted to do a Second Life project. And what people have found is that there is no ROI on really small projects in Virtual World. So people like MTV and CBS have proved that there is ROI on very large Virtual Worlds projects. And so, we’re seeing a lot more interest in building strategic, walled gardens than we had in the past. And so I think that will spin off. I think in 2008 you’ll see a lot of projects come off of those platforms you’ve mentioned of companies who really want to be something big and really want to own that whole experience.
  33. 33. ROBERT BLOOMFIELD: Mm-hmm. Okay. I’m going to combine two questions for our closing question. One is from Incredible Tomorrow and one is from Fiona May. Incredible Tomorrow is asking about when Second Life will be ready for the small-to-medium sized businesses with local client bases, You know, “When will Second Life be ready for them to really be able to generate revenue based on a Second Life presence?” And Fiona May, with Sun, is interested in the larger corporations. And so the question is, “Do you see good opportunities for the small companies to do the small things they can afford?” And then, from the big corporate side, “Who do you see that you think is doing a good job and is sort of paving the way for the future?” SATCHMO PROTOTYPE: Sure. Certainly a lot of the business models are still being ironed out as we speak, and I think today there’s an opportunity for both of those groups. And of course those opportunities increase in the next two to three years. At the local level, it depends what you want to do. I mean, it might be hard to have your local community come in and check out your store. Unless you’re distributing software, you know, maybe you have a version of the OnRez Viewer on the CD and your customers, you’re putting one copy in every bag and you encourage them to come in to your virtual experience and check out the store. Otherwise, there’s a great example of an opportunity for small companies to use the virtual world like you use the Internet and there are lots of small companies. I mean, there are lots
  34. 34. of eBay companies that only exist on the Internet or a lot of companies who--they were brick and mortar, but then they started selling a lot more through the Internet and internationally. I think that’s true for Second Life. The numbers are still pretty small, and it’s still very hard to get people at your location unless you have something really compelling that you can’t get elsewhere, and so it’s a lot of hard work. Well, this isn’t any different than having an Internet business or having a brick- and-mortar business; it’s just hard work to be an entrepreneur. On the large end of things, I think they maybe have a leg up, in the sense that they have users, and a good example is CSI: New York was able to drive many people to this project because they already had users, so they’re just taking their users from one medium and moving them to another medium. And it’s more interesting to me for a lot of those big projects to bring their audiences or bring their customers with them than it is to try to find the people in Second Life who are interested in maybe their niche program or their niche product. So I think there is great opportunity on both ends. Clearly this will continue to expand in that way and, like I said, a lot of the business models are just getting worked out. Digital goods, certainly, is something that looks very promising. Sponsorship is something that looks very promising. And so we’ll see how things shake out on both ends of that experience as we move forward.
  35. 35. ROBERT BLOOMFIELD: Okay. Great. Well, Chris, Satchmo, thank you so much for spending an hour telling us about Electric Sheep Company and what you’re doing on all ends. Judging from the backchat and the many, many questions we got, I think our listeners found this very valuable, and I really appreciate it. I’d like to thank all of our sponsors and our affiliates and SLCN TV for helping us pull this all together, and hopefully this is going to be the beginning of a conversation, rather than the end. So keep in touch. And if people have additional questions, my guess is there will be some blogging going on; check them out. SATCHMO PROTOTYPE: Great. Well, it was good to be here. And thanks, everyone who is here and, certainly, I read the blogs. You can catch me on Twitter. You’re more than welcome to IM Satchmo Prototype or send an email to chris@electricsheepcompany.com and we can continue this discussion. ROBERT BLOOMFIELD: Thanks a lot for coming on. Everyone, next week, on the 4th of November, we’re going to have another very interesting show. We’re going to have Gene Yoon, Ginsu Linden, who is called “the architect of the Second Life economy.” He was a former legal counsel for Linden Lab and has been somewhat of their central banker, a very important guy because now he’s vice president of business affairs, so this should be an extremely interesting session. Next week, same time, same places. So, Rob Bloomfield-- Beyers Sellers--signing off. Again, Chris, thank you very much. SATCHMO PROTOTYPE: Thanks, again.
  36. 36. ROBERT BLOOMFIELD: Bye, all. [END OF AUDIO] Document: cor2008.doc Transcribed by: http://www.hiredhand.com Second Life Avatar: Transcriptionist Writer

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