METANOMICS: MILLIONS OF US

FEBRUARY 16, 2009

ROBERT BLOOMFIELD: Hello, everyone. I’m your host, Robert Bloomfield, and on behalf

of Cornell University’s Johnson Graduate School of Management and Remedy

Communications, welcome to Metanomics. Today our guest is Reuben Steiger. Over the

last five years, Reuben has catapulted from his role as a Linden Lab employee to serving as

the CEO of the social-media agency Millions of Us. Millions of Us has evolved as well from

being one of the first and most influential marketing firms in Second Life to building content

in Sony Home and licensing celebrity-oriented virtual good through their affiliate Virtual

Greats.

As always, Metanomics is filmed from the virtual Sage Hall, right here in Second Life’s

Metanomics region, thank to my real life employer, Cornell University’s Johnson Graduate

School of Management. I’d like to say hello to our event partners Muse Isle, Confederation

of Democratic Sims, Rockliffe University, New Media Consortium, Orange Island and Meta

Partners. And I also want to say hello to our growing audience who’s watching the show live

on the web. I see we actually have quite a few of you out there, and I see that many of you

are not yet registered on the website. You’re showing up as guests.

So for those of you who have trouble getting into Second Life, whether it’s a firewall or a

lack of bandwidth, going to the web is a great option, metanomics.net/watchnow. You can

see the show, and you can also participate in backchat through InterSection Unlimited’s

ChatBridge system. But, for those of you who are not registered, my understanding is, you

won’t be able to use ChatBridge. So if you want to see the show on the web, please do

register so that you can talk not only with the other people on the web but the people

throughout our event partner locations.

I’d like to say a special thank you to the couple dozen people who have shown up for our

Metanomics Office Hours sessions. We’ve had two the last two Thursdays. We got some

incredibly useful feedback on what you’re looking for in this series, what works and what we

could do better. This week we’re going to do it again with the special focus on the show’s

content and format. Do you want to see more focus on academic research, law and policy,

new Virtual World platforms? How far should we step outside Virtual Worlds and how often?

Should we be talking about all forms of social media, all forms of technology and business

and policy?

How about personal stories? Breaking new? What matters more to you, the topics or the

guests? Do you like the interview format, or would you like to see more panel discussions?

Or how about debates? Or, for all I know, there’s a big unmet demand for PowerPoint

presentations. So anyway, come to our next Office Hours session this Thursday at noon,

Second Life time, on the Remedy Sim, and tell us what you’d like to see.

Speaking of breaking news, one of the content options on the list, our first guest today is

Jade Lily, community manager of the Austin-based consulting firm Metaversality. But Jade

is wearing another hat today, representing the board of directors of the 2009 Second Life

Community Convention. It’s really an honor to have the first public announcement of SLCC

here on our show. So, Jade, first, welcome to Metanomics.

JADE LILY: Thank you for having me on the show, Beyers.

ROBERT BLOOMFIELD: It’s great to have you on. So let’s just jump right to the details.

Where and when will SLCC be this year, Jade?

JADE LILY: Actually, first of all, if it’s okay, I’d like to just go ahead and explain a little bit

about what SLCC is for those people who haven’t heard about it.

ROBERT BLOOMFIELD: And keep everyone in suspense; that works for me. If only we

had a commercial to slip in, in between, but go ahead.

JADE LILY: Okay. Second Life Community Convention is a sort of conference where

people who are in Second Life can meet up. It’s filled with all sorts of sessions where people

can share what sort of things that they’re doing in Second Life. In the past, we’ve had

educational tracks where educational organizations have talked about how they have used

Second Life. We’ve had business tracks and social tracks. So in general, it’s just a place

where people in real life can go to connect with one another.

ROBERT BLOOMFIELD: Well, my understand is that SLCC really just started out in 2005

as a bunch of Second Life residents who wanted to get together in real life, and, over the

years, it evolved into a much more formal event, with, as you say, the business tracks. And

last year, what, there was an entire sub-conference on education and keynote speeches by

Philip Rosedale and Mark Kingdon. So are you planning to continue that trend or get back to

the roots of just a social get-together?

JADE LILY: I think it’s going to be a little bit of a mix. And one of the things that we’re really

trying to focus on is to have sort of a balance between a lot of the more rigid structure of

having panelist discussions and also, at the same time, have a lot more social sort of

interaction. Yeah, you can look forward to both of those things. And, if you’re interested in

reading more about the history of SLCC, you can go to our website--and I believe we’ll have

the link there in a little while--and there’s a section there that talks about how SLCC got

started.

ROBERT BLOOMFIELD: And that’s slconvention.org? Is that right? That’s the website you

mean?

JADE LILY: Correct. Yes, slconvention.org.

ROBERT BLOOMFIELD: Okay. Now you’ve kept us in suspense long enough. Where and

when?

JADE LILY: We’re excited to have SLCC at San Francisco this year, from Thursday,

August 13th, through Sunday, August 16th. And the location is the Marriott Hotel in

San Francisco, but we don’t want people to go and book their rooms yet. We’re going to

have a registration opening soon on the website, and when people get registered, they’ll

receive a code for their hotel room so they’ll be able to sign up and book their hotel room at

the same time as they register.

ROBERT BLOOMFIELD: Okay. I see the backchat seems happy about that. So cool. Yeah,

San Francisco is great and should make it easy to get some Linden Lab representation

there.

JADE LILY: Absolutely.

ROBERT BLOOMFIELD: And I also notice that you have an earlier time. Last year it was

the first week of September, which I know caused some difficulties for people associated

with education. Was that part of the thinking in moving it earlier?

JADE LILY: Yes, I believe so. There was a lot of complaints about people who were going

to be in school at that time, so that’s why we moved it back to earlier in August.

ROBERT BLOOMFIELD: What is your role as community coordinator?

JADE LILY: My role is basically to improve transparency a little bit into the planning

process. I want to help to encourage and facilitate increased participation this year. We

really just want to get as many people in Second Life involved in the planning process as

possible. And so, along those lines, one of the things that I know already is, if you go to our

website slconvention.org, along the side there you can see a tool that we’ve set up, that

allows people to submit ideas for the convention this year. And once they’ve submitted an

idea, anybody can go in and vote on the ideas they like the most. We don’t guarantee that

we’re going to have everything that’s posted there. We can see what sort of ideas people

like the most and try and implement some of those.

ROBERT BLOOMFIELD: Okay. Great. I assume you are still looking for sponsors and

speakers and volunteers and the whole works. That’s right?

JADE LILY: Absolutely. So if you go over to that user voice page and you can submit ideas,

but that doesn’t commit you to actually planning. So if you want to get involved in the

planning, you want to volunteer, what you can do is send an email to

volunteer@slconvention.org. And we’re also looking for sponsors so, if you’re interested in

sponsoring the event, we’re going to have some information out on the website about

sponsorship as well. But, if you think you’re interested, in the meantime you can send an

email also to sponsor@slconvention.org.

ROBERT BLOOMFIELD: Okay. Thank you very much, Jade Lily, for coming on behalf of

the Second Life Community Convention, and I, for one, hope to see you there.

JADE LILY: Thanks so much for having me, Beyers.

ROBERT BLOOMFIELD: My pleasure. Let’s turn now to today’s main guest,

Reuben Steiger, founder and CEO of Millions of Us, a company dedicated to helping

businesses understand and harness the power of Virtual Worlds and online communities.

Reuben began this career path as a Linden Lab employee, with the colorful title of

“evangelist.” He left Linden Lab to found Millions of Us, which contracted directly with

companies that wanted to reach consumers in Second Life, companies like Toyota and

Warner Brothers. But now Millions of Us has its focus elsewhere in Worlds, like Gaia Online

and Sony Home, and in licensing celebrity-based virtual goods through a new company

Virtual Greats. Reuben, welcome to Metanomics.

REUBEN STEIGER: Thanks for having me. I’m glad to be here.

ROBERT BLOOMFIELD: We’re delighted. I’m really interested in hearing about all these

different aspects of what you have been doing and what you’re doing now. I know that a lot

of our viewers are going to want to know why Millions of Us is no longer so active in Second

Life. But one reason, of course, is that there are big opportunities elsewhere, so what I’d like

to do is start with those. And, in particular, one that’s very interesting to me is Sony Home,

since I recently bought a PlayStation 3. There was a recent article in Virtual Worlds News

that reported that you’re no longer a licensed developer for Sony Home. So I’m wondering if

you could start by telling us what you were doing for them and then why are you no longer

going to be.

REUBEN STEIGER: Sure. We were hired--let me get this right--in late 2007 by Sony to

build a lot of the content, I’d say substantially all the non-core Home content. So the Central

Plaza, the Far Cry spaces, spaces for all the third-party games. And we spent [the greater?]

part of a year building that and really enjoyed it. Had a fantastic time. And we’re not doing it

anymore. So is there more that--tell me where you want to go with that. I mean I think

there’s a lot in common with that and with Second Life, “Why aren’t you there anymore? Do

you not love it? Do you not feel this way or that about it?” And the reality is that there are

now 250-odd commercial Virtual Worlds, and we’ve been very, very bad, as a company, at

finding the one that will work for us, to the exclusion of the other 249.

ROBERT BLOOMFIELD: One possibility is that you guys are well-positioned to come in, in

the early stage, do something you do particularly well and then, as it becomes more routine,

let other providers come in, take over your job while you go to the next new World. Do you

see it that way?

REUBEN STEIGER: Possibly. I think it’s a much more interesting question actually

because I think there’s a lot of other questions to unpack underneath it, all of which are very

interesting, if you think Virtual Worlds are interesting. So I assume we have a qualified

audience where the answer to that is a hundred percent yes. I guess one thing I always

hoped with Second Life--and I think this is probably true of this crowd--is that maybe we can

do like an IM chat, virtual show of hands, but for how many people in the room today is

Second Life your primary Virtual World platform as to [AUDIO GLITCH] time spent.

ROBERT BLOOMFIELD: So just so you know, most people are watching this through a

video stream, so it will take anywhere between 15 and 30 seconds for them to hear that and

start responding. But I’m sure they will. Let’s let them.

REUBEN STEIGER: While they start doing that, why don’t I just take a very tiny sample set

with you.

ROBERT BLOOMFIELD: Yeah. So for me, I hate to take the focus off you and put it on the

interviewer, but I do want to say I got into this whole thing in the first place because I had a

very specific goal I wanted to accomplish for my research, and I was looking for platforms

that would help me. So I looked at a bunch of different Worlds, and Second Life, very early

on, appeared to me to be about the worst choice, but it was a great place for me to learn

more about the industry and just to keep in contact with the people who knew about the

other platforms and the technological innovations that would be coming over the next year

or so. So for me, it has ended up being, in some ways, the place that I hang out waiting for

that perfect World to be formed, which I guess I’m still waiting.

REUBEN STEIGER: Yeah. Your description of it, I think, is fairly--without meaning to

undercut your personal uniqueness--I think it’s fairly technical. And, what I mean by that is

that, certainly in the IM sent, it is for everyone here as well; Second Life is their primary

world. And that makes sense. The interesting thing is that it’s a very small percentage of the

overall market, in terms of people. Growing. Certainly, I would say the most committed

single population, but we all know that the bulk of the market is kids and teenagers. And

often the use cases are not what they are in Second Life.

So the interesting observation here is that Millions of Us, as a company, there’s many ways

to describe us, but the easiest one and the one that’s most accurate, I think, is that we’re a

company that gets paid to create very cool stuff, and, in general, the bill is footed either

predominantly by an advertiser who feels a glow on their brand because they’re doing

something very innovative or very interesting in environments that are atypical, or it’s paid

by the intellectual property holder, whether that be a Sony or the owner of content that’s

being highlighted within Sony Home.

Second Life--and I think it bears going into this--in the first wave of hype around Second

Life, Second Life sort of failed as an advertising environment. And that, not more than

anything else, that and that alone is why we stopped. We couldn’t do work in there anymore.

And it was really, I think, attributable to two key things, both of which are fixable. One, for

the most part, advertising is about aggregating attention. Right? So I don’t need

advertising’s help to have a one-on-one conversation with you, but, if I want to talk

quote/unquote to a million people like you, I need to advertise in some way, shape or form.

And, in the entire Second Life experience, because it wasn’t built to enable reaching tons

and tons of people, it was built to facilitate small groups like this, it never performed very

well when measured against things like banner buys or television ad spots, in terms of just

volume. It killed everything ever known to man, in terms of engagement. But the observation

is that advertisers, they like engagement, but only if it’s in reference to how engaged the

millions of people rather than tens of thousands were.

ROBERT BLOOMFIELD: You see it primarily as a metrics and scale issue?

REUBEN STEIGER: Well, metrics simply--yes, it’s a metrics and scale issue. I had to

consider that for a second, but I do think it was a metrics and scale issue. I think that the

second thing there that’s really interesting is that, while you’ve got metrics and scale, you’ve

also got control. And interestingly, Second Life did okay in terms of control, meaning, if

you’re a corporation, there are the thousand horror stories of you’re doing an event like this.

You’re XYZ corporation and some [AUDIO GLITCH] comes up and starts launching

self-replicating penis attacks. That, one would have thought, would have been the bigger

hurdle, but I think that relative to what could have happened, Second Life did really, really,

really well in the area of control and not so great in terms of--

ROBERT BLOOMFIELD: Okay. We’ve got a bunch of questions already popping up, and

I’d like to pass some of them along. One is from Dusan Writer, and that is: Do you see

console-based Worlds having a future based on what you know about Sony Home?

REUBEN STEIGER: Wow! First of all, I just got an IM from Latok Neumman--that’s

awesome. “Console-based Worlds, do they have a future?” Yeah, they do have a future.

Absolutely. The question there, I think, breaks down to--I’m going to start ignoring the chat

as I’m speaking because I can’t devote--

ROBERT BLOOMFIELD: It does take a lot of practice. So if you’re willing, I will go through--

I actually have a staff who sends me the best questions and stuff like that.

REUBEN STEIGER: Awesome. I will quell my curiosity. They absolutely have a future, for a

variety of reasons, namely because there’s a huge audience using the consoles. Secondly,

consoles are really, really good at synthesizing 95 percent of the things that make Virtual

Worlds compelling. So I think you’re going to get Virtual-World-like experiences, meaning

undirected, highly graphical, but not hierarchically imposed goal-based. So they might be

about status. They’re broadly about socialization and co-discovering content with people

and making friends.

ROBERT BLOOMFIELD: Not slaying the giant orc and then [CROSSTALK].

REUBEN STEIGER: No, no, no, no, no. But the interesting observation, I think, is that, at

least in the first wave of console-based Virtual World experiences, the unifying element is a

shared interest in games. That’s what everyone has in common so a lot of the content, a lot

of the social experiences are built around facilitating people to meet so that they can go off

and play console games together and creating sort of a unifying scoring backplane so that

context can be added to that. It’s so different than Second Life, and certainly, when I first

started looking at it, I wanted to say that it would fail because so many of the truths that we

hold to be self-evident as Second Life evangelists are really notably absent in the

console-based Virtual Worlds like user creation of content.

ROBERT BLOOMFIELD: Let me, if I could, I’d like to get you to put some of this in the

context of the Gartner Hype Cycle, which I’m sure you’re familiar with, but some of our

viewers might not be. We actually have a graphic of the Gartner Hype Cycle. It starts with a

technology trigger, which causes the technology to become more and more visible until it

reaches--and I love this term--the peak of inflated expectations. And then when those

expectations are revealed to be unattainable, the visibility and hype drops down to the

trough of disillusionment. And then, finally through the slow and quiet efforts to improve the

technology and use it more intelligently, you see companies climbing up the Slope of

Enlightenment toward the Plateau of Productivity. They must have spent a lot of time

thinking of those names.

But one of the things I’m wondering, especially being one of the first companies to come in

and try to do marketing campaigns within Second Life, do you feel like you came in right at

the peak of inflated expectations? Well, let me just ask that. Where do you think, when you

were doing your Scion and some of these other pretty high-profile ones, do you see that as

being like just before the peak of expectations?

REUBEN STEIGER: I don’t know. I can never think about how movements start effectively

in the terms that, who was it, Gartner?

ROBERT BLOOMFIELD: Yeah, Gartner.

REUBEN STEIGER: Gartner. I can’t do that. It’s like, “I get it.” Tech makes something

possible. We all get excited. We tell everyone we know. Then we feel hideously

embarrassed because everyone who know shows up and the thing breaks, and we sit there

sweating and crying and apologizing and saying, “It was so cool yesterday. You’ve got to

see this.” Then they tell a lot of people that they heard about it. We’re insane; it doesn’t

work. And then we lock ourselves in a garage and make it work. And then they come back,

and they say, “Wow! It really was cool when you told me about it five years ago.” So I have

no idea where we are in that slope.

My perspective is, yeah, I’m probably to blame for a lot of the Hype Cycle. I got so excited

about Second Life when I was first exposed to the idea, that I figured out how to devote my

life to helping this become more widespread and helping people from a huge array of

backgrounds understand how this would affect their life and how to do interesting things with

it. I don’t know where we are. I do know that, from the perspective from which I look at it

today, the hype is way over. I think you’re right that we’re sort of whatever that little squishy

bit before enlightenment is called is probably where we find ourselves.

ROBERT BLOOMFIELD: Climbing the Slope of Enlightenment.

REUBEN STEIGER: Exactly. Why do we have to climb it? Why can’t the Slope of

Enlightenment go down to the playground of the glossy-eyed and weary? I think we’re

somewhere. Right? My big observation today is that--I measure this by where everyone in

my family’s head is at during the holidays, around Christmastime or Hanukah. I remember

five years ago I told everyone that I was going to take a job at a company called Linden Lab,

and they made a Virtual World called Second Life. And they all became very nervous. As

long as I wasn’t being paid in virtual currency, then they would deal with it. But they’d never

heard of it. It was endlessly exotic and scary.

The following year, a lot of interesting things had happened at Linden Lab. We’d gotten

growth to really move. We were over 100,000 residents, and there was a lot of Second Life

in the news. And my family thought--probably didn’t think I was smart; they’re like, “Wow!

The insane kid gets lucky again. Maybe he won’t have as big a humiliation here as we

thought.”

The year after that, Second Life had gone global. I’d just started my own company around it.

People were hiring us. It was clearly a bigger movement. The year after that, it was now

clearly much, much bigger, but advertisers had left Second Life. That year, three years in,

two years ago, was the big aha for me because the big Christmas present was a Virtual

World product. Right? Now, still, no one in the mainstream had a clue about Second Life.

Right? It was way too much for them, but they were buying their kids Webkinz.

ROBERT BLOOMFIELD: Webkinz. Yeah.

REUBEN STEIGER: Right. So it went from obscurity to the centerpiece of every family’s

Christmas, in three years. And, for the most part, without explaining what the last two

Christmases have been like, for the most part, that’s, I think, the interesting place in which

we find ourselves now is, first of all, Virtual Worlds are pervasive.

Secondly, there’s a set of core concepts and principles from Virtual Worlds that can be

abstracted and are now broadly being applied to all forms of communication and product

development. And, largely speaking, it’s an interesting thing to get into, but I think this has a

lot to do with the fact that, over time, atoms get more expensive, bits fall to zero, and

marketers, product designers, educators, humans are starting to learn which pieces of that

thing that we call happiness can be virtualized and made more affordable and more

universal. So I think it’s a really, really interesting time to be involved in all this, and I don’t

know which way it’s going to break between now and next year, but I do think it’s an

unstoppable process that’s going to keep--

ROBERT BLOOMFIELD: You’ve made a bet on one way that this is going to break, which

is that you are now getting into licensing of distribution rights for celebrity virtual goods.

REUBEN STEIGER: Yeah.

ROBERT BLOOMFIELD: In December, I saw the New York Times had an article on Virtual

Greats, which is--actually I’m hoping you can clarify, just for starters, on just the business

end. Who actually owns this company, and who are the collaborators?

REUBEN STEIGER: This is Virtual Greats?

ROBERT BLOOMFIELD: Yeah.

REUBEN STEIGER: Okay. I should say, by the way, sort of laughing to myself when you

said, “You’ve made a bet.” I make a lot of bets over the course of a year, and the one you’re

talking about is a big bet, and it’s a multi-year bet. But, over the course of every year, when I

look back on it, like last year, we made a lot of bets that didn’t pay off that I would have bet

on again, I think, if I had the chance. We made a big bet on Lively.

ROBERT BLOOMFIELD: What was the nature of that bet? Did you become a licensed

developer for that?

REUBEN STEIGER: Yeah, we became one of the first developers. I think we were the first.

But the bet, broadly speaking, was kind of a silly one. It was, “Google plus Virtual Worlds

sounds like it could work.”

ROBERT BLOOMFIELD: Why do you think it didn’t?

REUBEN STEIGER: I think it’s very interesting why it didn’t. I’d like to be very diplomatic in

saying that the reason--

ROBERT BLOOMFIELD: No one’s listening so it’s--

REUBEN STEIGER: Yeah, right. The reason it didn’t work, I think, was that it wasn’t

compelling to [end users]. The reasons why it wasn’t compelling are--I think it’s a very good

case study because a lot of things did work about it, and some things that are absolutely

critical for success didn’t. It also may not have worked because Virtual Worlds, at least in

the Second Life model, need an extraordinarily long runway. And the Google let a thousand

flowers bloom and cut the nine hundred and ninety that didn’t bloom into entire forests, let

those die. Second Life wouldn’t have made it, according to those criteria. But I think there’s

a lot of reasons to look.

You’d asked about Virtual Greats, by the way.

ROBERT BLOOMFIELD: Yeah, let’s get back to that.

REUBEN STEIGER: Let me give folks the background there. Three years ago, 2007, two

years ago now, statistics started to be released about the volume of virtual goods

transactions across all Virtual Worlds. And this was at a time at which we were still very,

very active in Second Life, which I should say we’re going to be again in the very near

future. But we were still involved in Second Life, and we were also branching out and trying

to understand which of the other successful consumer communities or emerging platforms

were going to be very promising.

And the stats came out that there was about a billion and a half dollars in virtual goods

transactions. And this came at a time when we were doing a lot of work with folks in

Hollywood. What I found really noteworthy was that none of that, or substantially none of

that $1.5 billion involved preexisting intellectual property. In other words, if I were to

right-click on your shoes, they’re not Nike shoes; they’re a Second Life creator. Which is

awesome, but I found it to be counterintuitive. That there wasn’t a market for stuff like, I

don’t know, Pirates of the Caribbean merchandise, or the ability to be Jack Sparrow, or the

ability to aspirationally become Elvis Presley. I just didn’t understand it. We went and looked

at it, and what we discovered was that nobody had defined the legal rights that related to

virtual goods. So what we did was, we defined the rights. We came up with a strategy to

acquire them exclusively from some very iconic figures at the top of the market, with the

hope that their endorsement of this new company and this new approach would drive the

rest of the rights-holders towards us. And so we launched by announcing that we had the

exclusive rights for Justin Timberlake, Tila Tequila, Paris Hilton, Snoop Dogg, 50 Cent, the

Incredible Hulk and Elvis Presley, if Elvis--

ROBERT BLOOMFIELD: I’m guessing that mid-40’s aged accounting professors are not

the target market that you’re trying to hit. It’s okay. You don’t have to answer that even. We

see lots of Worlds where the whole World is tied to content, owned by the World developers.

So you can think of this with, you know, Disney has some Worlds tied to the fairies from

Peter Pan. Of course, then there’s Webkinz, which is an RL product in in-world content. So

you’re trying to open this up and say, “Whatever World you have, we will have licensed

goods that may be of interest to you. You can work these into your World.”

REUBEN STEIGER: Yeah. Here’s the way it works now and--well, here’s the problem. So if

your Habbo Hotel or Gaia Online or any other at-scale World, if you want to, either for

promotional reasons or for transactional reasons, offer Snoop Dogg stuff in your World, you

have to get on the phone, call Snoop Dogg’s agent, perhaps then figure out that that’s not

the right person. Then you go to their management. And then you have to convince,

effectively, Snoop Dogg and his manager that they should care about your World that

they’ve never heard about and so on. And then you have to negotiate a deal.

Turns out it’s massively, massively time-consuming because these Worlds don’t really

matter to these stars because they don’t represent individually a lot of revenue potential.

And so our structure simply allows any World to tap into a catalogue or a library and use it

as they see fit. Right? So they don’t have to argue with anyone or waste a year of their life

negotiating for a single right; they can get them all.

ROBERT BLOOMFIELD: So it sounds like one of the things Virtual Greats will bring to this

is you’re going to do not only the legal work--

REUBEN STEIGER: So it’s interesting. The audience doesn’t like any of this.

ROBERT BLOOMFIELD: I am kind of noticing that.

REUBEN STEIGER: And I’ll challenge them on it. It’s very interesting.

ROBERT BLOOMFIELD: Okay. Go for it.

REUBEN STEIGER: Folks see this in very binary terms. So one person said, “The good

thing about Virtual Worlds is that it allows completely separate celebrity to work.” That’s

true. That has nothing to do with this. Not everyone will want to be Torley Torgeson, to use

an example, or pick your Second Life celebrity. So the reality is that the way in which we

encode meaning and tell stories is a large industry, and it’s protected. So there, first of all,

are a lot of people who want to use those elements of identity to express who they are. In

fact, it is one of the most efficient ways to do so. It’s more so in Worlds that have less user

creation rather than more.

Secondly, I think a lot of people would think, “Well, you’re just sitting here,” and this is the

new DMCA I heard someone say.

ROBERT BLOOMFIELD: Yeah, I saw that.

REUBEN STEIGER: I don’t think there’s a controversy to be had there. The fact is that, if

someone’s going to pay for celebrity or just IP-related stuff, to not pay the IP holder is not

legal, and it’s not possible to get to real scale and have it be done really beautifully without

some sort of mechanism to fairly pay all participants.

ROBERT BLOOMFIELD: I’d like to pick up a different aspect of this business. Part of this is

just arranging the legalities, but a lot of it seems to be that someone’s got to go to

Snoop Dogg’s whoever is representing him and not only work out some sort of reasonable

deal, but also convince them that Virtual Worlds are even worth talking about and paying

attention to. And, beyond that, if I understand you right, you’re going to go try to convince

them to give you legal rights for virtual content. You’re not necessarily handing them a

specific World and a specific promotion. You’re saying, “Someday you’re going to want to do

this. We’d like to nail something down now.” And then you would go sell that, try to work with

the Virtual Worlds so they don’t have to think about the legal side.

REUBEN STEIGER: That’s right.

ROBERT BLOOMFIELD: That seems like a very hard sell to the celeb.

REUBEN STEIGER: It is, which is good and bad. It’s bad for us, in that it doesn’t happen

quickly. It’s good because it means we have a reason to exist. It’s considered a barrier to

entry.

ROBERT BLOOMFIELD: This is a Millions of Us rather than a Virtual Greats activity, I

believe, but it seems like you got close to this type of business plan with the World Wrestling

Entertainment’s SummerSlam in Gaia Online. So that was Millions of Us, right, not Virtual

Greats?

REUBEN STEIGER: That was. Yeah.

ROBERT BLOOMFIELD: We’ve just been talking about celebrity. And I’ve also heard you

talk about storytelling and the importance of storytelling in marketing and in engaging with

people. I’m wondering if you could sort of pull these two together for me. How did you blend

storytelling and celebrity to promote World Wrestling Entertainment’s SummerSlam in a teen

Virtual World?

REUBEN STEIGER: What we did was, one Monday morning, the users of Gaia Online,

which is a large Virtual World for teens, logged on to find out that someone had appeared

on their forums and claimed that they had taken over the World. This person was one of the

bad guys from the WWE. Over the course of the next five days, a drama unfolded

essentially on the forums of Gaia, which is very interesting because Gaia has both a Virtual

World, like the one in which we’re sitting in now, but most of the activity actually occurs on

the forums, where people are speaking to each other asynchronously through avatars.

So over the course of the next week, we essentially had a scripted drama, that was

puppeteered by Millions of Us, unfold, in which the good guys and bad guys of WWE fought

it out, where the users would rally support for them as it unfolded and show their affiliation

by carrying virtual good related to the WWE, like the chairs that they break over each other’s

backs or other pieces of virtual merchandise around the World to show whose side they

were on. Over the course of it, it all sort of concluded on live television so you had to turn in

to the purview to see how it played out. Close to a million pieces of virtual merchandise

were taken, and most importantly, I think people loved it.

ROBERT BLOOMFIELD: Fascinating story. You’ll have to forgive me. I’m just scrambling a

little. You’ve kept me on my toes, so we’ve been changing around and trying to get the

graphics to line up with the direction of the conversation. We only have a few minutes left,

and I guess I have one quick question about the economy, and then I’d like to talk about

your work with Byron Reeves. But first, on the economy, I know Advertising Age reported

that--this was last week--77 percent of businesses plan to reduce their advertising

campaigns’ media budgets in the coming year. I’m wondering are you feeling that? How are

you responding? Do you think that these sort of cutting edge forms of advertising can

actually survive in this climate?

REUBEN STEIGER: There were three questions there, and I’m not going to get the

answers correct.

ROBERT BLOOMFIELD: I do that. I never got interviewer training.

REUBEN STEIGER: I’d say 77 percent is probably a low estimate. My guess is that

95 percent cut their budgets. I think that the kind of stuff we do, in terms of Virtual World

marketing, if it hasn’t been cut already, it’ll be cut in the next two weeks. And what else was

in the question?

ROBERT BLOOMFIELD: Now there’s going to be fierce competition. I’m wondering if the

headline is, “Virtual Worlds Lose Out Because Everyone’s Sending Their Advertising Dollars

To The Most Traditional Outlets.”

REUBEN STEIGER: Well, what are the most traditional outlets?

ROBERT BLOOMFIELD: I know they’re leaving newspapers. I know they’re leaving TV.

Certainly local TV.

REUBEN STEIGER: Those sound like pretty traditional outlets to me. What, everyone’s

going to put their stuff on billboards? The reality is that, during recessions, you have two

competing pressures that go on. One, you have no money to waste, so there’s a flight

towards the most accountable media, whether they’re better or worse; it’s the most

accountable. And generally, in our day and age, that means Google. Direct response. Highly

actuarial. So you can actually say, “For every dollar I spent, here’s how much money I

made.” And, if that equation is that you’re making $1.10 for every dollar you spend, then the

logic is, you should just scale that until you have all the money in the world. Most advertising

is not like that.

So broadly speaking, what we’re seeing is that digital, as part of the advertising portfolio, is

the only growth area. The fastest growth area within digital, in terms of consumer attention,

is online communities or social media.

And the third piece is that the economy is in the toilet. So you put those all together, and it

just says that the market’s under huge pressure to be where people are and be relevant and

to be spending their money responsibly. It’ll put a damper on the most sort of experimental

things, into which camp I think probably Second Life falls, but it won’t kill the market. There’s

a lot of places, broadly speaking, that advertisers don’t know how to capitalize on. And so I

think these will be places like, “How do we be successful in Facebook? How are we going to

be successful in Twitter? How do we talk to people instead of advertising to them?”

Because, in general, that’s going to be the defining element for the entire category known as

social media, I think. It’s that it just won’t obey the rules.

The same observations you saw with Second Life, that it’s hard to get pure scale, which you

can buy through advertising. Most of these media are not driven by those same forces.

They’re not very excited to have messages thrown in front of them, and the question

becomes not how do I make this behave like something it’s not to get the numbers that I

think I’m used to, but how do I learn to value radically different numbers differently, and how

do I think long-term about using this broad class of technologies ranging from social media

to Virtual Worlds to micro-blogging platforms, to do something that’s important, namely build

a movement that might not be about my brand.

I’m not sure people are dying to join the Pepsi movement. I think that they’re excited to join

movements, and movements are things that often have very little to do with a brand, other

than that the brand may have brought it to you. And, when a brand brings you a movement,

meaning something you really care about that you’ll devote a lot of your time and energy

and passion to, then that’s good for [AUDIO GLITCH]. That was a long rant.

ROBERT BLOOMFIELD: That was. We will definitely make a clip of that for YouTube. It’s

interesting, we’re getting very mixed feedback on the show topic itself. I think there are

some people who, especially in Second Life, not wild about the marketing side, the

consumer engagement side of business in Virtual Worlds. And we have Prokofy Neva

calling you a genius and just saying I guess I’m not doing a good job asking the right

questions, which, no doubt, is true.

But, if I could, I’d like to change gears just to close by taking a look at a rather different

endeavor that Millions of Us is doing in collaboration with Stanford professor Byron Reeves

on the Green Energy Conservation Challenge. And, rather than try to explain it, we can just

take a look at the video and then talk about it right afterwards. So, SLCN, go on and cue up

that video.

[VIDEO BEGINS]

ANNOUNCER: We’re all interested in helping the environment. Right? Recently I had a

smart meter installed and found out a whole new way to do that. Smart meters are like

regular electricity meters, except they can tell me just how much energy I’m consuming

anytime online. So whether I’m online at home or on the go, I can see just how much energy

I’m consuming. But that’s just the beginning. My smart meter connects me to a virtual home

that gives me detailed information about how my house is consuming energy. I can even

find information about how to lower my usage rate instantly.

And then the real challenge begins because the smart meters let everyone see just how

much energy we’re using and play a really fun game to compete, to make our home that

much greener. Because, in this world, the only way to improve your virtual home is to lower

the energy usage in your real one. And, with all the extra info about my energy efficiency

peak hours and comparisons to similar homes, it was no problem finding quick ways to

improve. When saving energy and the environment is this easy and fun, everyone wants to

do it. And I finally beat my neighbor Frank at something. That’s his house.

All this effort paid off, not just for the planet, but also four our pocketbooks. Once we knew

how to conserve power, we started saving both energy and dollars. And once one

neighborhood does something so amazing, pretty soon our whole town was green with

envy, and all the neighborhoods were competing to be the best. People always say it’s hard

to change set behaviors, but, as it turned out, all they needed was a really good challenge.

[VIDEO ENDS]

ROBERT BLOOMFIELD: Reuben, that seems like a fascinating project. My understanding

is that this is demo. Where do you see this heading for Millions of Us?

REUBEN STEIGER: Where do I see the stuff we’re doing--

ROBERT BLOOMFIELD: The collaboration, yeah, with Byron.

REUBEN STEIGER: I’m not quite sure. I sort of dreaded this interview, to be honest with

you. I know I’m a bit of a polarizing figure in these audiences because I think one of the

reasons is that people think what we’re doing is crass and commercial and devalues the

important things that are going on in Virtual Worlds. I guess my view is what we’re really

interested in doing is making what’s going in Virtual Worlds more and more real and giving it

a bigger voice and a bigger platform on which to play.

At the beginning I said Virtual World principles are just endemic, and I think this

Byron Reeves stuff shows how you actually take Virtual World game feedback system

principles and attempt to use them to change real behavior. And that’s a very big deal, I

think. If we, not we as Millions of Us, but we as a population of people, as a community of

people, are able to make people in the Real World more energy efficient, that’s massive. Or,

able to promote more responsible behavior, that’s massive. So whether this project will

come to fruition with Byron and a particular energy company is less important to me than will

this type of approach be able to be applied to a broad swath of industries and applications,

and I think there the answer is, absolutely.

ROBERT BLOOMFIELD: I think it looks fascinating. The video itself certainly makes a

compelling case. So many people are into social games, and it really seemed to tap into

their latent competitiveness. I just want to say, in closing, Reuben, thank you so much for

ignoring your feelings of dread and coming onto Metanomics to speak your piece. I think it’s

a fascinating take, and you guys have shown lots of successes. So I look forward to getting

you back again and not too long, and you can tell us about your next success.

REUBEN STEIGER: Thank you so much for having me. I enjoyed it.

ROBERT BLOOMFIELD: Thanks a lot.

REUBEN STEIGER: Bye, everybody.

ROBERT BLOOMFIELD: So to our audience, I’d like to say, if you enjoyed today’s topic,

there are a number of past shows you might find particularly relevant. If you found this topic

annoying or objectionable, you should definitely take a look at these items from our

archives. We’ve had a couple of interviews with competitors of Millions of Us. Electric Sheep

Company’s Chris Carella, back in our first year, and Sibley Verbeck last fall. We also had a

great discussion with K Zero’s Nic Mitham last August, who talked about a number of virtual

marketing successes and failures.

I’d also suggest taking a look at one of our shows from the Virtual World, There, with

Morgan Brooks, of CosmoGIRL, and Mary Ellen Gordon, of Market Truths, as we took a

look at CosmoGIRL’s virtual prom. So I guess maybe the analogy to the SummerSlam, but

for the fairer sex. So anyway, I hope you did enjoy this show and take a look at our old

ones.

We always close Metanomics with an opinion piece, Connecting The Dots. Connecting The

Dots today is Tish Shute, author of the blog Ugo Trade. As someone who follows the

business side of technology, it’s great to be able to rely on someone who follows the

technology side of the Virtual World business. So, Tish, take it away.

TISH SHUTE: Okay. Well, Rob, you said that that would be a good segue perhaps from the

green gaming project to what I would like to talk about. I think it is because I think if you’d

been anyone that’s been reading Ugo Trade, you’ll know that I’ve actually been turning my

attention to the connection between virtual environments and real environments. I’ve always

been interested in that, but I think, really, in the last six months, I’ve really kind of taken the

bull by the horns and tried to look at that conversation. I know this is supposed to be an

opinion section, but I think, really, this is a conversation. I mean how we connect real and

virtual environments is really--it’s a conversation that’s just beginning.

And I think, if you probably heard a number of terms; everyone’s heard these terms floating

around there, the internet of things, the web of things, Bruce Sterling’s neologism of space

and time--spines, S P I N E S. There’s another great term: Every Ware, spelled Every Ware,

W A R E. And there’s a great book by Adam Greenfield that really looks at what the world of

Every Ware might be about and all the kind of things that we’re going to have to think about

in a world of Every Ware.

But anyway, I think a lot of people go, “Well, what’s this got to do with Virtual Worlds? We’ve

just kind of got this so the thing doesn’t crash on the end-to-end internet, and now you want

to take it like beyond the end-to-end internet.” But, this is happening, and I would argue, and

this is the conversation piece, but who’s going to be envisioning this? Aren’t people who’ve

spent a lot of time in these Virtual Worlds that, at the end of the internet, we’re basically

stuck behind our PCs still? But, as this begins to move out and be not tethered to a single

PC, but pixels anywhere is really another expression I’ve started to use, who better than to

start this conversation than people immersed in this space? I think Reuben pointed out he

doesn’t know where that conversation on green gaming is going. Because, clearly, how we

make these connections between virtual and real environments is just beginning to be

explored.

So that brings me to a recent blog I did with a project called “patchbay.” It’s spelled

Pachube, and a lot of people call it that. I call it patchbay because it’s sort of went around

that that what it was called for a while. But you’re free to interpret. It’s something so new that

its name even is flexible. But I think what’s important here and what is very interesting is

actually Virtual Worlds have been the first to kind of step forward and become early

adopters of something like patchbay, which really is about connecting environments. Not

just real to virtual environments, but environments like web pages with objects in the World.

If you want to know more about it, I’ve got an extensive blog. I interviewed the founder,

Usman Haque. I think it’s an interesting project. If you don’t have time to read the whole

blog, look at Natural Fuse, which is his project of electronically assisted plants there. You’ll

see how interesting this all starts to get when we’re talking to machines and machines to

each other. [There’s a new?] system that goes literally beyond the traditional internet.

Now I’m probably messing Lynn up drastically with the slide she’s got to put up because I’m

adlibbing slightly. But there’s an important piece of this, I think, that Virtual World people

might be the most interested in, and that is one part of Every Ware is how we link these

environments together and the communications protocols we use to do that and how we see

that evolving.

The other part of this is, you know, what is the cyberspace that we useto--how do we relate

to this new data everywhere, data coming from everything. And I think that this is where

probably Virtual Worlds people and people in Second Life--you probably all read Snow

Crash at least ten times--I don’t know whether all of you have read Halting State--but,

obviously, Halting State gives you an idea of what cyberspace might be like when it’s

everywhere, as opposed to being linked, something you sit at, you know, you sit at your PC

and “enter.”

Now basically I think one of the things that people have not really thought about a lot, and

Virtual World technology has taken a long time to stabilize, but it takes a stretch of the

imagination to think of mobility and Virtual Worlds all in one breath. And I don’t mean little

light-weight Worlds on your mobile phone so that you just basically got a little mobile

desktop. I mean pixels anywhere. I’m not sure if Lynn’s ready for this slide yet, but she has

a link. Everyone, I assume, saw the Super Bowl ads. They saw this idea of ubiquitous

avatars, right? I’m not sure that everyone knows how damn close this is. I think, if there’s a

link going to go up at some point of a little YouTube demo put up in 2/07 by total immersion,

a little blue ape avatar, it’s around the corner, really, in many, many ways.

Now that’s not to say it’s tomorrow, and it’s also not to say that some of the ways that we

begin to link real and virtual environments won’t just happen using our PCs, using a platform

like patchbay so that we can begin to do some interesting projects now. We don’t need

these magical goggles and whatever to really get started with this. I think one of the things

that is really interesting is that actually how quickly people who work in Second Life and

OpenSim get this. You show them patchbay, and a very good example of this is the reaction

grid folks, that, within days, they had got out some really amazing projects. I think, again,

Lynn will put up this link so that you can go and see what they’ve done. And, plus, I think

G2’s put up some very clear explanations how to use the code to--what you can do, what

the protocol that patchbay is based on, which is called the extended environment’s markup

language is about and what that facilitates.

I would argue, and this is the conversation I’m sort of, “Why has my interest gone from

Virtual Worlds more towards beyond the end-to-end internet and the internet things is

because I think that, really, people who’ve experienced Virtual Worlds at the end-to-end

internet and really positioned to do some very creative things now that we have really the

pieces we need to really break our tethers to these PCs. Virtual Worlds should not be

something that you just have to enter because you happen to be sitting at your PC. There’s

something that should be there when you need them and where you need them. And, in

fact, it’s quite critical that they’re there. Because, if you imagine a World of Every Ware,

W A R E--Rob told me be careful when I say “everywhere” and “Every Ware”; it’s

confusing--how you can relate to that, what your data visualization, what your pixels are

telling you about Every Ware is vital.

Again, and there’s another interesting point that’s going to come up, and there’s a lot and a

lot and a lot, and I see Prokofy’s in the chat here. She’s debated this endlessly. Well, not

endlessly. She’s talked about this a lot. But the end-to-end internet has a very special

relationship to identity. It gives you, because you basically have as a given anonymity, a

certain amount of anonymity in the end-to-end internet. It’s freed us up to have lots of ways

we can present ourselves, plus sitting at a PC where you have control of how you present

yourself. It’s a very different situation to what cyberspace will be like when we really have it

where we want it, when we want it. So the people who are kind of pioneering these visions, I

think visionary architects have been key, I think in augmented reality, actually thinkers from

games and Virtual Worlds are very key, that this is a conversation. I think it’s going to be

interesting who kind of defines this, how it gets defined. And I’m happy to see people from

Second Life and OpenSim. I think that, hopefully, Lynn’s putting up the links to Reaction

Grid because it’s going to be a class there so you can get started. I’m thinking my time is

nearly up.

ROBERT BLOOMFIELD: That would be about right.

TISH SHUTE: Yes. Just go get involved, and get started, and see where this goes. I think

it’s exciting, obviously.

ROBERT BLOOMFIELD: You spell out a fascinating vision, and I know I hear more and

more about the Halting State vision of the Metaverse, as opposed to what’s usually taken is

the Snow Crash vision, with just lots of information flowing from devices in Real and Virtual

Worlds, connecting them not in giant immersive ways, but in very small and penetrating

ways. So thank you, Tish Shute, from Ugo Trade, for coming on and giving us a great look

at the future of virtual technologies.

Next week, we have Alice Krueger--some of you may know here as Gentle Heron--who

works with the nonprofit organization Virtual Ability, and we will be talking about the

challenges of engaging with Virtual Worlds when you have disabilities, and we will also be

looking at the opportunities that Virtual Worlds and related technologies provide to those

with disabilities. So I look forward to seeing you at next week’s show. Thanks a lot, and

bye bye.

Document: cor1050.doc Transcribed by: http://www.hiredhand.com Second Life Avatar: Transcriptionist Writer