102907 Electric Sheep And Csi Metanomics Transcript

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

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

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

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.

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

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

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

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

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

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.

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?

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

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.

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.

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

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.

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

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.

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

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

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.

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

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,

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?

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

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.”

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,

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.

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

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.

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

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.

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

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.

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.

ROBERT BLOOMFIELD: Bye, all.

[END OF AUDIO]

Document: cor2008.doc
Transcribed by: http://www.hiredhand.com
Second Life Avatar: Transcriptionist Writer

102907 Electric Sheep And Csi Metanomics Transcript

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