Lee (striver) wrote in blog_sociology,
Lee
striver
blog_sociology

The profit motive.

Any time you get a bunch of people together doing anything, someone will find a way to profit from it. I'm not going to delve into the pros and cons of that here except to show how it appears to be effecting online communities.

One of the most important factors in the equation is finite resources. Things like bandwidth, storage, software and server power can be very expensive on a large scale, not to mention the cost of support personnel. Yeah, you can debate how much all this really costs on a site like LJ but the bottom line is the bottom line. Every penny more in costs is a penny less in profits. In modern business, companies take every penny they can.

This is even more extreme on resource intensive services like second life. They can only handle so many people online at once. Two years ago the online population at any one time was between 50,000 and 80,000. The numbers are the same today. They have had almost zero growth over two years. At the same time, there has been a constant flood of new accounts. That indicates a constant turn over of almost 100%. People are leaving as fast as they are coming in.

Members tend to complain that Linden Labs, the company who runs second life, isn't doing the right things to retain membership. But retaining membership is not in the best interest of profit. It is usually the new members who spend the most when everything is still new and interesting and exciting. It doesn't take long for members to fill up their inventory with junk and stop buying so much.

So the best way for Linden to profit from SL is to get people in the door, get what money they can out of them, and shove them out the door again. This is not a good formula for building community. But is it really smart to think about the future on a platform that could, and likely will, be made obsolete quickly?

I was recently looking at a post I did in January 2003 showing some of the stats from LJ at that time. 832,563 total users and 307,692 of those had posted in the previous 30 days. Compare that with the current stats of 25,078,440 total users and 906,963 posting in the past 30 days.

This again shows an extremely high turn over with very slow real growth. Good for the bottom line but not for community stability. I am seeing this happen all over the computer communications industry. Give people some exciting new toy to interact with, get them into it, harvest money, and send them packing. This isn't what the membership wants, of course, so they think the company is doing everything wrong. But the company just has a different agenda.
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