Determining Price in Second Life
On the Second Life Music Development List, there’s a discussion concerning price for music services in Second Life. The question brings to light a very important topic; how do you determine price in a virtual world? What would you charge a virtual person for your services rather than a real person? The economies of scale in Second Life versus that of the real world are quite different. While the Second Life economy is strong, the value of 1 Linden ($L) is not the same value of 1 United States dollar ($). Many entrepreneurs, business people, and hobbyist, benefit from this smaller scale, they are able to deal with larger sums of value virtually with little impact to their wallet. Determining prices is still an issue; it requires surveying, taking a look at the economic data, and the value of the provided service.
In most cases, you can shop around to find the prices of other products. Searching through SLExchange or OnRez provides a quick glance into how much things cost. For musicians and DJ’s it becomes very difficult to determine prices, venue owners would like to pay one price, Musicians and DJ’s differ in their pricing schemes, and the pricing rate vary. I like to use some the Second Life Economic Statistics to help determine price ranges, especially when looking at the Monthly Spending Amount and the Resident Transactions by Amount sections. These two areas discuss resident spending, and show at a glance the ranges of where people are spending their virtual money. What I do is pay more attention to the Resident Transactions by Amount, and break them down in to ranges based on quality, for instance most $L 1 transactions are poor quality, demos, or ‘free’ items, and most transactions in the $L 5,000 - 19,999 range are extremely high quality items (or land).
Value for your service is very important. The more use of your service, the higher the price should be. For instance, if you are DJing without any special requirements, then your price is less than DJing for a wedding where the genre, music, must fit a certain theme. Another example would be a musician who performs in Second Life would charge less for use of their music in an advertisement. The more value your service has (a grand opening vs. a regular party) the higher the cost, but it should be within certain limits. This is still a very small economy compared to the real world, it is very difficult to charge real world prices for virtual services; most of Second Life would struggle. For something of extremely very high value, the $L 5,000 - 19,999 would be an appropriate price range as compared to something of very low value ($L 1). Although this idea gets thrown out of the window when working with large development groups, companies, or corporations firmly rooted in the real world. I charge separate for these sorts of companies as compared to someone in Second Life. If I were to charge everyone real world rates, I would not be as accessible to those whom deal primarily in Second Life and budding virtual entrepreneurs.
My final tip in determining prices for Second Life is to consider how accessible your service should be. Repeat business in Second Life in smaller amounts adds up compared to one huge pay-day. While the less expensive services are more accessible by going too low, people may think your price reflects your service, which would be cheap.
