Transcript of "120307 Virtual Retail Metanomics Transcript"
DECEMBER 03, 2007
ONDER SKALL: Hello, everyone, and welcome to another session of Metanomics, part of
the Metaversed series of events that we hold in conjunction with Cornell University's
Johnson School. With us today is Stroker Serpentine and Temporal Mitra, two of the larger
business owners in Second Life. They'll be introduced and interviewed by Professor Robert
Bloomfield of the Johnson School at Cornell.
The main sponsor of Metaversed Island is the Otherland Group, Making Sense of Virtual
Business. I'd also like to take a brief moment to thank the sponsors of the Metanomics
series and all of
the Metaversed events. They are Saxo Bank, Generali Group, Kelly Services, Cisco
Systems, SAP, and Sun Microsystems. And, of course, none of this would possible without
SLCN, who are the absolute best ones to talk to when it comes to working with video and
Avatars across the grid at all event partner locations can join the conversation by joining the
Metanomics Group. And also remember to join the Metaversed Group for all future
Metaversed business events. If you have any questions for our guests today, you can send
them directly to me. I am Onder Skall in Second Life, and Caleb Booker in real life.
Retail and the trade of virtual goods are of keen interest to many budding Second Life
entrepreneurs. So to investigate this world further, I'd like to introduce everyone to Professor
Robert Bloomfield of Cornell.
ROBERT BLOOMFIELD: Well, thank you so much, Onder. Welcome, everyone, to another
episode of Metanomics. Today we are discussing, as Onder said, some of the larger in-
world businesses and these two businesses have a theme, which is that they're making a
good deal of money off of scripted products. So these are items that have scripts built in
them for animation and information content and, more specifically, are making a fair bit of
money off of the adult entertainment industry. So there's an apocryphal rule, rule number 34
of the Internet says if it exists, there is porn of it.
Well, today we're going to focus on another side of the adult entertainment industry. And I
don't know if there's another--a better way of saying this rule than as it was put by Benn
Konsynski, one of our guests last week on Metanomics, from Emory University, who said,
"Toys become tools." So while the adult entertainment industry is of interest in its own right,
one of the reasons I'm so interested in talking about it here on Metanomics is because I
think that the technologies and the business strategies that these two gentlemen are using
in their organizations are likely to have some far-reaching implications for the way
commerce is done in virtual worlds.
So today let me introduce you to our two guests. We have Temporal Mitra, who heads up
Temporal Industries. And we also have Stroker Serpentine, also known as Kevin Alderman,
of Eros, LLC, and maker, most famously, of the SexGen bed, and also a plaintiff on a couple
intellectual property lawsuits in Second Life. Welcome, guys.
STOKER SERPENTINE: Hi, Robert.
TEMPORAL MITRA: Hello, Robert. A pleasure to see you again.
ROBERT BLOOMFIELD: Yeah, I'm glad to have you guys on. So what I'd like to do for
starters is just have each of you summarize what your businesses do. You know, how is it
that you make money? What do you provide of value to your customers?
Let me start with a bit of caveat here, which is that although you're both making money in
mature industries, we are on a PG SIM, so we will need to keep our discussion appropriate
for this venue. So Stroker, can we start with you? Tell us a little bit about your business.
STOKER SERPENTINE: Sure. Welcome, everyone. Well, our business is actually very
diverse. We deal with in-role content as well as real-life content. We basically evangelize
the--we [realize?] the adult content industry. We identify the needs and desires of Second
Life residents. Most of our content is produced by suggestions, actually, and things that
they'd like to see, things that they'd like to have incorporated into their Second Lives. But it's
mostly about partnering and co-branding and evangelizing for us. We have an in-world
component as well as a real-life component.
ROBERT BLOOMFIELD: Okay. Can you talk a little bit about your specific products and--
well, I guess, you know, I don't know how much you're willing to reveal as far as your
profitability, you know, your revenues. How large of a business are you able to arrange
STOKER SERPENTINE: Well, I will offer this: Our Second Life product services, primarily
our SexGen line, our animations, our attachments, are well into a six-figure industry--a six-
figure income. As far as--
ROBERT BLOOMFIELD: And that's six-figure, U.S. dollars?
STOKER SERPENTINE: Six figures, U.S. dollars; correct. We look at that as an integral
component of our overall business. Actually, it's a very small component. We've got several
enterprises that we're going to be rolling out this coming spring that are going to be far more
successful and profitable than any of our pixel products.
ROBERT BLOOMFIELD: Okay. And let's see, Temporal, do you want to tell us a little bit
about Temporal Industries?
TEMPORAL MITRA: Well, certainly. Temporal Industries began as an umbrella company,
more or less. I tend to be interested in a lot of things in Second Life. Real estate,
advertising, gadgets, malls, property management, sim liquidation even.
And one of my first ventures in Second Life was a fairly large escort club that was never
profitable. So I closed it. It was one of the larger ones in-world; it was just not a profitable
venture, however. So I began creating objects of--gadgets mostly that supported the adult
industry because there are a lot of other people who do become profitable running adult
clubs in Second Life. And so I began making gadgets and systems that supported those
ROBERT BLOOMFIELD: So if I could follow up on that a little bit, Temporal. So it's very
difficult, at least so far for me, having done a little research, it's been difficult to identify
exactly how much money there is in the adult entertainment industry in Second Life.
Certainly, everyone talks about it. But as far as the hard facts, it's difficult to find good
Now I hear you saying you had a big enterprise, actually, running an escort club, which
certainly we see these things advertised. Why do you think you didn't make money? Is it
something inherent about the industry? Did you just not have the luck or the right strategy?
TEMPORAL MITRA: No, it wasn't that at all. What it was is my club--some of you may have
heard of it. It was called Heaven or Hell--was about 100,000 square meters under roof. It
was very large and very well-equipped. At our peak we had about 300 employees. It was,
however, an industry that is kind of a shadow industry here in Second Life. It's very easy to
circumvent payment systems. And so basically we had employees and people that were
drawn to our traffic that basically took all the profit out of the enterprise.
ROBERT BLOOMFIELD: Okay. So now you're in the position of providing scripted objects
for the people then who you weren't able to control simply by hiring them and trying to give
them the opportunities to make money?
TEMPORAL MITRA: Exactly. And now we provide gadgets to the never-ending stream of
people who enter that--I'll call it a shadow economy. That business in Second Life, like that
business in real life, is something of a shadow economy.
ROBERT BLOOMFIELD: Hence, the difficulty of getting good data.
TEMPORAL MITRA: Exactly.
ROBERT BLOOMFIELD: Now, one of your products is the EscortHUD.
TEMPORAL MITRA: Exactly.
ROBERT BLOOMFIELD: Can you talk about what this product is? And keep in mind as
you're describing this that, although we do have a large in-world audience, we also have a
number of people who tune into Metanomics through the Internet and don't necessarily
know a whole lot about Second Life. So you'll need to provide a little context--
TEMPORAL MITRA: Okay, certainly. In my estimation, there are between 50 and 100,000
working escorts in Second Life. And with my background running a club, I was able to
design a gadget that would simplify what they had to do numerous times every shift or every
Basically, an escort gives out a lot of note cards, a lot of pictures. They have to check
profiles to see if an individual has payment information because, basically, if he or she has
no money, then obviously they're not a viable customer. And so we created a gadget that
automates a lot of that.
The EscortHUD basically will tell the wearer pretty much all they need to know financially
about a person that comes within range. It tells how long they have been in game, whether
or not they've used a credit card, whether or not they've actually used that credit card to
purchase Lindens. And--
ROBERT BLOOMFIELD: And all of this information is publicly available to anyone that
wanted to get it; this simply automates the process?
TEMPORAL MITRA: Exactly. And we automated the process of chat, as well. There are
standard things that an escort says when meeting a customer. And we basically created a
methodology where they could click on a button, and the HUD would say it for them. It also
automates giving out their note cards and photos. And then, of course, it also has a--just like
every other HUD in Second Life, it has a little radar so you can find the customers.
ROBERT BLOOMFIELD: Uh-huh. Okay. And let's see, this is--well actually, Stroker, one of
your big products is this bed. And I know that has--well, I guess if you could give people a
better sense of why that is such a popular item. I understand it sells for something around
30, 35 U.S. dollars?
STOKER SERPENTINE: That's correct.
ROBERT BLOOMFIELD: And so can you talk a little bit about the--I guess the production
and the marketing of that item?
STOKER SERPENTINE: Sure. Well, my background--I do have considerable experience in
the adult industry. I ran an adult nightclub in Fort Lauderdale for several years. And even
when I first came into Second Life, which was four years ago this last 8th of December, it
was pretty wide open, Wild West experience, inasmuch as there just wasn't a lot of
interactive, immersive entertainment out there. Yes, you could stand around a campfire and
you could chat but, with very few exceptions, were no interactive animations whatsoever.
So we started out--actually we did a rudimentary hack of several of the animations--the
OEM animations that Linden Lab supplied to the grid. And through that we've built a
business now that has been very successful by branding it, registering the trademark,
partnering with other adult content providers and scripters, and we've managed to market it
into a grid-wide presence and actually, with the advent of these lawsuits, have kind of made
it an international brand now. I notice that we're getting several hundred thousand hits on
Google for SexGen now, which I kind of find interesting because it only exists in Second
ROBERT BLOOMFIELD: So this is another advantage of filing a lawsuit? It's a marketing
STOKER SERPENTINE: Well, the lawsuit was definitely not anticipated. We were very
frustrated with the DMCA system that Linden Labs--and how they apply it. We had done as
much as we could in-world as far as chastising and ostracizing these individuals. They
would basically just--they would close their accounts and open up another account and set
up shop somewhere else. So--
ROBERT BLOOMFIELD: So can I ask you--let's just take a step back.
STOKER SERPENTINE: Sure.
ROBERT BLOOMFIELD: The mature of this lawsuit--and I know Temporal, you're not party
to either of these lawsuits, but you have shared the concern. It's basically that they are
copying and reverse-engineering your products? Am I understanding that correctly?
STOKER SERPENTINE: That's correct. They're using just about any methodology
available to them, either through print copying to geo-intercept to taking advantage of lag,
symbol backs, whatever--it's a game. It's an in-game that goes nowhere, and it's
participated in by individuals who either think that it's some sort of a challenge, or they just
lack total creativity whatsoever.
And so like I said, given the inability or apathetic--I know that's a harsh word, but--attitude
from Linden Labs, we didn't think that we had any other recourse but to look for really--in
ROBERT BLOOMFIELD: Okay. If I could, I'd like to defer--we'll discuss the lawsuit and also
the relationship both of your businesses have to Linden Lab in a little bit, but for now I would
like to focus on some more basic issues in your business.
STOKER SERPENTINE: Sure.
ROBERT BLOOMFIELD: And one of them is whether what you're doing is adult or
something much more mundane. You are managing virtual businesses, and I'd like to hear
you both talk a little bit about the challenges that you have. So if you could--when I think of
just any type of business, it starts with trying to attract and compensate and then retain your
So let's start there. Temporal, can you tell us a little bit about how you actually manage your
business, what sort of business structure you have with your employees?
TEMPORAL MITRA: Certainly, I'll be more than happy to. And I use an interesting model, in
that we employ, oh, about a dozen people right now. And they're everything from
professional writers to graphic artists to animators to scripters. We're kind of top-heavy on
And the way I compensate them is I pay them in Lindens by setting up a split of the product
sales. This keeps them incented; it allows me to pay them without having to worry about
income taxes. With my method, basically everybody pays their own taxes when they exit the
Lindens into U.S. dollars and then remove them out of the game. I prefer that method
because it, quite frankly, saves me from having to pay taxes twice.
ROBERT BLOOMFIELD: Now, as you mentioned--oh, first of all, I should say those of you
who are interested in the tax issue, you might look back to late September when we had
Professor Brian Camp from Texas Tech University, a law professor, and we had an
extended discussion on taxation.
Going back, Temporal, to your description of your employees, one of the things that I
noticed--maybe I missed it but it didn't seem like you mentioned hiring people to do
marketing and logistics for you.
TEMPORAL MITRA: That's because I handle that, for the most part, myself. Basically,
that's my full-time job. There are individuals that do product scripting. There are people who
do the graphics and the document work, and then I pull it all together into a marketable
product. I use my own advertising companies to advertise it visually in-world. I also
contribute quite a bit of money to the Linden classifieds, as I'm sure Stroker does, and
basically, I handle the marketing of it myself.
ROBERT BLOOMFIELD: Okay. Stroker, you want to talk a little bit about your business
STOKER SERPENTINE: Sure. We use a variety of compensation packages. Right now
we've probably got 20 real-time--or I'm sorry, real-life employees. Some of them get paid in
Lindens, some of them actually get a paycheck every week through Pay Pal. They're 1099
employees, sub-contractors, designers, developers, builders, scripters. We have an in-world
staff of 14 people. Most of them are compensated in Lindens and land. We have a--
ROBERT BLOOMFIELD: And if I can ask--so do you--as far as the tax side, do you provide
them with 1099s or do you take Temporal's view that Lindens earn money and so, when
they extract the Lindens, they're going to be taxed on it?
STOKER SERPENTINE: Well, that's pretty much the view that our accountants have pretty
much suggested to date is that, you know, as long as we're giving them--providing them a
virtual currency, if they spend it on virtual products, then obviously we're not having to tax
them for that. It's up to them whether or not they pay their individual income taxes, if indeed
they use the exchanges to cash their virtual currency into real-life dollars.
But our organization is pretty expansive. Like I said, we have a real-life component as well
as a Second Life component. I do primarily most of the marketing, as Temporal does. I do
take advantage of the classifieds. I'm very pleased with the new classifieds that Linden Labs
has implemented. Up until recently I had pretty much boycotted the classifieds, only
because they were being gamed.
ROBERT BLOOMFIELD: Can you explain what you mean by that?
STOKER SERPENTINE: Meaning that--well, what key works for one, obviously skin
manufacturers have nothing to do with dancing or virtual sex. So they would write a one-
sentence description—“We sell skins,” and then the remaining text would be nothing but key
words to try to pull up their classified ads on every single search for any virtual product.
So with that in mind, we do most of our evangelizing through events, through our support
groups, through our membership groups. We've got about 5,000 people in our Eros group
now. And our administration groups, we've got a 500-member support group. We feel that
pure peer marketing is the most effective use of marketing in Second Life. The grid is about
interactions. It's about relationships, and word of mouth has been more successful for us
than any other form of web-based classified peripheral marketing we've done to date.
And I challenge anyone to show me that they've got a better method because it's the old--
like the old shampoo commercial. She tells two friends and she tells two friends. Before you
know it, 40 people have turned into 40,000. And we've basically built our marketing model
ROBERT BLOOMFIELD: Now, you mention so many people being involved. One of the
challenges you must face is guaranteeing that the people that you're giving power to are
people you can actually trust with that power.
And so I have some questions for both of you on how you hire people. How do you--
especially, you know, people like to maintain their anonymity. Temporal, in fact, right, we're
only using your SL name in this show? So they need to also have faith in you.
How do you deal with these trust issues in the employer-employee relationship when so
many people hide their real-life identities? Temporal, maybe we can start with you on that.
TEMPORAL MITRA: I'll be more than happy to answer that one. I've had some really bad
experiences because over the last 18 months--I've only been in the game for 18 months, so
I've built a lot in a relatively short period of time. I can hardly wait till I've been in as long as
Stroker has and get up to his level.
But I had some very bad experiences in that I come up with some of my employees have
told me that I think way far outside the box. So I come up with some very interesting
concepts for gadgets. And in the past before I learned how to script with LSL, it was a
situation where I would bring a concept to a scripter and, for the first six months or so, they
would take my money and they would take my concept. They would disappear and, two
weeks later, somebody new with my product would show up.
And so I learned by trial and error to not give away the entire concept all at once. What I
have done is come up with projects, and I have individual scripters work on portions of
them, with one exception. Well, Bo Peep Yosarian(?) who is one of my managers and
partner here, she has access to all of our projects and all of our scripts. Everything else I've
kept compartmentalized so that no one scripter can walk away with an entire project.
ROBERT BLOOMFIELD: Okay. Now, when you say Bo Peep is a partner, is that in your
real-life--the real-life aspect of your business, and that you two know one another's real-life
TEMPORAL MITRA: We do know one another's real-life identities. We've never met. She
lives 1500 miles away from me, and is a time zone away from me, but we have worked side
by side on dozens of products. Right now we are marketing somewhere around 250
different products. And she is the one avatar--or one personality in Second Life that I trust
with my property, my bank account, literally everything, just because she's paid her dues
with me. She's proven herself to be trustworthy.
So all of my other employees, what they do for me is totally compartmentalized. And when
they have worked for me for a while, I give them more responsibility, more freedom, and
more access to larger portions of larger projects.
ROBERT BLOOMFIELD: Okay. And Stroker, do you want to talk a little bit? It sounds like
you might have even more of a challenge with managing your people, since you have so
many of them.
STOKER SERPENTINE: Well, Temporal is actually right. It's a matter of trust and
responsibility. Obviously, I'm not going to, you know, as any organization wouldn't bring
someone in and give them the keys to the kingdom from the beginning. Most of our staff we
have real-life contractual agreements with, non-disclosure agreements. They are officers of
our corporation. They have specific responsibilities they're expected to perform.
We have employees all over the world and the States and the U.K. and Australia. And it is;
it’s really is a matter of trust.
As far as hiring new people, escorts for example, we give them a probationary period. They
are expected to perform and interact with the customers. And if they don't do so, then we cut
ROBERT BLOOMFIELD: Okay. And--okay, I'm just--sorry, was distracted by the fact that I
appear to have crashed in Second Life. So fortunately, we're on Skype.
STOKER SERPENTINE: [INAUDIBLE]
ROBERT BLOOMFIELD: Yeah, but fortunately we're on skype, one of the nice things about
STOKER SERPENTINE: _____ as far as our organization's concerned, I mean, stability
and reliability of the grid is a key component. It's very difficult to do business in this
environment when we have database crashes and when you have a heightened sense of
impatience from your customers, inasmuch as in-world delivery and those types of things,
so it does present a customer service challenge.
We actually have to be--and I've had considerable experience in real-life with customer
service. And this takes it to the nth degree inasmuch as--fortunately, they're virtual products.
They're easily replicated. But I find that the level of impatience is considerably more intense
than it is in real life.
And so it does have its difficulties, inasmuch as a grid-based virtual property that people
want and they demand in nanoseconds and so, from a customer standpoint, you have to be
very keen and very fleet of foot to capture these sales.
ROBERT BLOOMFIELD: Yeah. So this actually gets to a topic that I'm hoping we can
spend a fair bit of time on, which is that both of you are relying heavily on a proprietary
platform that is still relatively young, somewhat unreliable, and very frequently changing.
A couple weeks ago we had the author, Ted Castronova, on the show, who's written
frequently about the economics of virtual worlds and synthetic economies. And we had a bit
of a discussion on interest groups in Second Life, and he made a remark along the lines of
there aren't interest groups in Second Life, which is surely not true. There are certainly
people who are trying quite hard to actually influence Linden Lab in what they're doing. And
one of the questions--and this is unclear to me--is, although these groups are here, I don't
know how effective they are or they can be.
Can you talk a little bit about your association--your attempts to control Linden and the
Second Life environment that you rely on?
TEMPORAL MITRA: If I could respond to that, there's an old adage about you would be
more successful controlling the tides than you are controlling Linden Labs. They tend to go
their own way. And what happens is I think everyone here at one time or another has
commented on the fact that Linden Labs is not overly responsive to individuals within
I mean, if you have a griefer on your sim that is dropping particles all over and hurling
obscenities and attacking individuals, they won't do anything about it. I mean, you can file an
abuse report, and you'll get a message two weeks later that, “Oh, gee, it doesn't seem to be
a problem anymore.” Because, of course, that griefer is not going to sit there for two weeks
and wait for them to show up. And I think that is pretty much what I have experienced on the
business end of it. So we try to be self-reliant. One thing that I do know is that my profits, my
sales, are directly tied to the amount of unplanned outages on the platform. And I--
ROBERT BLOOMFIELD: I assume that's a negative association? More outages are bad?
Just to clarify.
TEMPORAL MITRA: Exactly. The more outages, the less money I make. And I never
thought there was a direct correlation. I thought that certainly it would have an effect on it.
But literally, you can put the metric that they have published of unplanned outages side by
side with my total sales and my profitability, and the unplanned outages are like a negative
chart to my sales. I mean, I can pretty much anticipate whether or not I will have a good
month based on how long the platform is up--
ROBERT BLOOMFIELD: Now, can I ask--you know, one of the things that I would worry
about in the longer term is that poor performance in, say, October won't just hurt the
October sales when people aren't able to get to your goods or just don't spend much time
in-world but then, in November, presumably, there are people who are leaving and less
interested. Do you see a lead-lag effect, as well, in the data?
TEMPORAL MITRA: Not to any large degree, because one thing that Stroker said--time
seems--well, he didn't exactly say it this way. But time seems to be compressed in Second
Life. So people are looking for instant gratification and they also seem to--if they can't buy
something today, they will buy it tomorrow.
And there is a constant stream of short-term residents, people who come in-world who may
buy a few things and a month down the road they're bored with Second Life because they
haven't really gotten into it, and they go away. But there's a constant stream of people
coming in all the time. So we obviously look for repeat customers. And we are fortunate in
that many--I would say a good 50 percent of our sales--are to people who have purchased
another item from us.
As an example, we sell the EscortHUD, as I mentioned. We also sell a club version of the
EscortHUD that allows a club owner to purchase it and hand out an unlimited number of
HUDs to his employees. The advantage is that those HUDs only work within his club. So
they can't take them to another club and expect them to work.
So what happens is a lot of club owners will see the EscortHUD that an individual escort will
have. He or she will come to our shop and purchase the club version, which sells for a little
bit more than the individual version does and, while they're there, they may pick up one of
our DVD players, or they may pick up one of our other adult-oriented systems.
And currently we're working on more adult-oriented systems. We're designing and creating
a total club system that will have dance poles and like an escort payment system and a
skybox rental system that's all servered and all in one comprehensive system. We also
brought out our TIM DVD players, which if you'd like to chat about a bit later, I'm more than
ROBERT BLOOMFIELD: Okay. Yeah, well, let's get Stroker in here on this. So Stroker, can
you talk a little bit about your dealings with Linden Lab, your experience with, I guess, the
platform's reliability, and also maybe how you deal with changes and features or absence of
features you would like to see?
STOKER SERPENTINE: I would like to see a variety of media formats, for one. I think
Quick Time is antiquated. It's obese. But as far as interaction with Linden Labs, I appreciate
the difficulty that they have dealing with such an expansive customer base, but you can't
strip customer service.
I've learned from my real-life experiences that there's no replacement for a kind word or
even if it's just, you know, “We're working on it” or “We’ll get back to you.” The blogs have
been implemental in disseminating information, but they're very one-sided. I don't know if
anyone's been following the Second Life blogs, but there's a lot of literal animosity in there,
and it's difficult at best, given the constraints of their staff, to deal with such a large member
So I'm willing to give them a hall pass on that, but there are basic tenants of customer
service that every business must adhere to to survive and compete. I think that they could
go a long way in making it a lot more personalized. The JIRA(?) or “gyra,” or however you
want to pronounce it, is very convoluted and complex.
I don't need the Lindens to actually be involved in my organization or my activities; I just
want a stable grid, as many do. And I want them to concentrate their efforts along those
lines. We can't expand these virtual markets, these virtual worlds, and these micro
economies without some degree of stability.
We kind of balance our in-world and real-life industries so that, as Temporal mentioned,
when there are performance difficulties, we can concentrate in other areas. We partnered
with a lot of real-life adult content providers. We have relationships with Playboy and Jenna
Jamison and Kink.com, Bang Brothers. These are billion-dollar industries that are interested
in penetrating these virtual world markets, but they read the blogs. They Google; they see
that it has its inherent limitations, and so they're hesitant to make considerable investments
with that in mind.
ROBERT BLOOMFIELD: Okay. So actually, let me follow up a little on that and, Stroker,
ask you a question, which is, you’ve mentioned that you have real-life enterprises in the
adult industry. And now you, at least personally, are doing things, you know, trying to make
a go of it in virtual worlds.
And so one question I have for you is, why try this small-market, newfangled thing, that a lot
of people still can't quite figure out what the attraction is of, you know, avatar intimate
activities? And you know, instead of the multi-billion dollar RL and traditional web-based
models? So that's question one. And--well, actually, let's just start with question one. Why
are you--yeah, go ahead.
STOKER SERPENTINE: You can't talk to a web page. Sure, you can stream content. You
can develop a variety of profitable models that--you know, subscription-based or download-
based, whatever, but you can't replace the immersive, interpersonal connectivity of having
someone else actually respond to you and your content on platform.
I believe wholeheartedly this is the attraction of these social networks inasmuch as you're
able to share your thoughts, your feelings, you're able to create a content in real time. It has
relevancy to someone that may be halfway across the world. You can't get that from a
website. And the industry--the adult content industry realizes this. I mean, it's a $4 billion
industry, according to Forbes magazine. And they want to be able to advance their product
models, their profitability.
They understand the interactivity, but they also understand that on the bottom line. These
are start-up organizations. They're minimally capitalized. They're used to much larger
content delivery networks. And so it's a challenge.
I personally am motivated by the ability to actually connect with people on the web. It's not a
static environment. It's chaotic. It's responsive. And I think that that's the primary attraction
for the majority of us.
ROBERT BLOOMFIELD: Yeah. Temporal, you want to add in on that?
TEMPORAL MITRA: Certainly I do. And I'd like to apologize. I got a little bit off the subject
last question. It was the marketer in me coming out there.
ROBERT BLOOMFIELD: Well, yeah, that's something we're used to on this show.
TEMPORAL MITRA: But if you look at what they're saying about Metaversed and virtual
worlds and the coming together of virtual worlds into a virtual universe--if even, you know,
10 percent of that actually comes to fruition, the Internet will not look anything like it does
now. Right now it's mostly--the web pages feed information to you, but they don't take any
reactive information from you, other than filling out a form or clicking on a link.
Basically, Second Life is a chat room with visuals. And not only with visuals, but with
resident-created content. So what is happening here is not just cutting edge, it's bleeding
edge. And if the big companies like IBM is working with Linden Labs right now to push this
into its next generation--I was fond of saying, you know, ten years ago, back when
everybody was paying 3,000 for a PC, there's gonna be $500 PCs available. And sure
enough, there are now.
Well, what is going to happen, from what everybody is saying, is Second Life will be a world
in a universe, and you'll be able to freely travel from world to world within this universe. So
the Internet of a decade from now will not be web pages; it will be avatar to avatar. It will be
video conferencing. It will be much different from Googling something and seeing a web
page. There will be true interaction between people across the globe.
ROBERT BLOOMFIELD: So yeah, this--you know, it's very interesting to hear two
purveyors of adult products saying things that really are very similar to what I hear when I
talk about educators, talking about the intimacy of the environment, talking about the ability
to make very real and lasting connections with other people. Now we're talking about maybe
different degrees of intimacy and connection.
But I think the lessons are very similar, and the proof will be--at least in my view, you know,
Linden Lab and other platforms still have a long way to go beyond proof of concept to
actually get the technology working smoothly and not demanding quite so much on the
TEMPORAL MITRA: I'd like to throw something else out there. Historically, on the Internet
from the time when it was billboards with plain text to gooey interfaces and browsers and
the like, adult content has always played an important part in pushing the technology. I
mean, video on the Internet was not created for somebody to sell coffee. That's all there
was to it.
And as a result, the technology is created to support this industry in many cases. So sexes--
or sex or intimacy or adult content has always driven the technology. That's how I see it.
ROBERT BLOOMFIELD: Let me move on. We only have about ten minutes left. And I'd like
to talk about some legal issues. And we did touch on the intellectual property side of things.
And I'm hoping we'll get a chance to go back to that.
But there are other legal issues involved, particularly in adult industries, that I think become
even more difficult in identity-free environments like Second Life. So in particular--and I
should mention also, it isn't clear what jurisdiction you guys are actually going to be subject
to. You live--if you live in Florida, Linden Lab is headquartered in California. They have
servers in Texas. And you may be selling escort services to somewhere in--you know, to
clients somewhere in Europe.
And so in particular, you know, prostitution and child pornography would seem to be
concerns. Can you talk a little bit about your approach to these potential problems?
STOKER SERPENTINE: I can.
ROBERT BLOOMFIELD: Okay, go ahead.
STOKER SERPENTINE: Adult is adult content, whether it's a pornographic image, whether
it's an intimate animation. I challenge that skins are adult content. They're a graphic
portrayal of a naked body. I think as long as Linden Lab is headquartered in San Francisco,
they will be predominantly watched over by the Justice Department along these lines.
They have a long way to go as far as compliance with USC2257. Age verification is going to
be an albatross for them. Adult content is going to be very difficult for them to police and
control and maintain, inasmuch as what's appropriate and what's inappropriate, even across
all international boundaries.
ROBERT BLOOMFIELD: Yeah. So let me ask how about your personal or corporate
liability as opposed to Linden Lab’s?
STOKER SERPENTINE: Well, we're excited about partnering with the Electric Sheep.
We're going to be offering an alternative grid this spring that will allow adult content
providers the opportunity to get off of the main grid, where they will be assured that a client
base is age-verified, that they have payment info on file, and that they are compliant with the
vast majority of international regulation.
ROBERT BLOOMFIELD: Okay. So for the people who aren't that familiar with the jargon in
Second Life and virtual worlds, can you just describe what you mean by a separate grid?
STOKER SERPENTINE: Currently, Linden Lab offers membership registration to anyone.
There is no age verification necessary. There is no payment information necessary. There
actually--yes, sure, they capture your IP address, and you could possibly track down
someone in Bulgaria, if necessary, but we find that very inadequate, in terms of adult
We are planning our own series of simulations. We've got currently 20 sims that we're going
to be taking over to our _____ grid. We're going to be providing payment alternative
solutions through our IPSP, our Internet Payment Service Provider, Cardzilla.
ROBERT BLOOMFIELD: So as I understand it, then, the technology within the world that
people go to will be basically the same as the public Second Life.
STOKER SERPENTINE: Right.
ROBERT BLOOMFIELD: It's just that you are controlling access to this subset of servers
STOKER SERPENTINE: Correct. We're controlling access and content. We're able to
control content. I know it's a very difficult challenge to do so, but we plan multiple clients.
We're gonna have a developer client. We're going have a resident client. We're going to
police our content. We're going put an emphasis on public service.
We're going offer alternative payment solutions. We've actually been able to work with Visa
Europe. We've been working on this for the last year to develop a virtual MCS(?) code. We'll
be able to--and this is something we're going to roll out this spring. Merchants, Stroker's
Toys, pixel(?) balls. Temporal Industries will be able to have a virtual Visa and MasterCard
merchant account, with no other information necessary but their real-life information and a
place to send the check to.
ROBERT BLOOMFIELD: Now, that's just on your grid, you're saying?
STOKER SERPENTINE: No, that's--
ROBERT BLOOMFIELD: That's--okay, that's public grid-wide.
STOKER SERPENTINE: Yes.
ROBERT BLOOMFIELD: Well, now, let me ask--we had Chris Corella, the chief creative
officer of Electric Sheep on a month or so ago.
STOKER SERPENTINE: Uh-huh _____.
ROBERT BLOOMFIELD: He didn't happen to emphasize Electric Sheep's exploration of
the triple X markets. Is this separate grid is specifically going to be adult-oriented?
STOKER SERPENTINE: Absolutely. It will be very similar in respect to the CSI New York
grid. It will--the biggest difference will be age verification and payment _____.
ROBERT BLOOMFIELD: Okay. Wow. Well, that's very interesting news. And I expect--at
least I should say that's news to me. Maybe I'm behind the times. But if it's news to--
STOKER SERPENTINE: It's something we've been working on and discussing and kicking
back and forth for, like, the last year. I have considerable relationships with a lot of the staff
and administration of Electric Sheep. I really believe they are on the cutting edge of
developing these virtual worlds. Between them and our staff, I think we're going to be able to
offer one of the most exciting venues in Second Life.
And I wanted to touch on it a little bit, something that Temporal had mentioned. And that is
the expansion of these presences. I see a time where the clients will be basically in our
favorite space on our individual browsers. If you want to visit World of War Craft or if you
want to go to Second Life or Dare(?) or Multiverse, you'll be able to just click on your
favorites. Your client is loaded within your browser, and there you are.
I anticipate a resilient avatar, inasmuch as Stroker will be able to go from world to world to
world and conduct business, to interact, to create content within these. And that's where
we're putting our investments is, you know, eight years from now. How these environments
are going to transform, how they're going to develop, how they're going to be able to cater to
the demands of these instant gratification web enthusiasts?. And I'm very excited about the
potential and the future of virtual interactive experiences.
ROBERT BLOOMFIELD: Yeah. Well, I'm going to let you have the last word on that, partly
because that is a wonderful segue to what we're going to be doing next week on
Metanomics, which is we're going to be talking with Dr. Yesha Sivan, who's a professor in
Israel and focuses specifically on interoperability between platforms.
I think many people are probably aware that there is now an active interoperability effort
involving not just the world developers, but also the major tech firms. Sun, IBM, Intel are
involved. The cell phone manufacturers are involved because you know it's only a matter of
time before you can use your cell phone and get Stroker to send an IM to someone in-world
and maybe see something on a two-inch screen, a little bit of Second Life or other world
content. So that will be a major aspect of discussion when we come back to Metanomics
We are out of time. I'd really like to thank Temporal Mitra of Temporal Industries and Stroker
Serpentine of Eros, LLC. Thank you so much for coming on the show. And--
STOKER SERPENTINE: Thanks for having us, Robert.
ROBERT BLOOMFIELD: --look forward to watching your businesses grow. And if half of
what you hope for comes true, this will indeed be a very new world of global commerce.
STOKER SERPENTINE: Thanks, Robert.
TEMPORAL MITRA: Thanks for having me, Robert.
ROBERT BLOOMFIELD: Thank you so much. Bye all.
[END OF AUDIO]
Transcribed by: http://www.hiredhand.com
Second Life Avatar: Transcriptionist Writer