Miscellaneous Uses for a Blog

While it’s been some time since I’ve spent a great deal of time in Second Life, I DO try to keep up with what is going on in-world.  News from Linden Labs (creators of Second Life) that they are stopping ALL gambling and gambling related activities in-world has sent waves through the Second Life community.  There are people that make a decent amount of money via running gambling spots. While I could care less if there was gambling in Second Life (outside of the fact that removing it also takes away 85% of the camping spots), it DOES create some concern.

Linden Labs has been fighting this battle with the FBI for some time now. Their arguement has always been that the Linden (the second life monetary unit) does not have any value.  This despite that one can exchange Lindens for actual US dollars. There are people in-world that make a real life living off of money they make in Second Life.  With Second Life conseeding the FBI and banning gambling, they are in essence admitting that the Linden has value. With that admission, it opens Pandora’s box to a whole host of other problems in the Second Life economy.

Next up, Uncle Sam 

If the Linden has value, then it can be taxed. If it can be taxed, it would need to be paid based off the seller’s state (as with most online sales). The question then becomes then WHERE and HOW? There has been talks for some time that taxes would likely be paid via the various Linden exchange markets.  LindEx, SLExchange, and the like. This would be the logical first step, but would ignore the in-state tax thought.  Taxes at that point would need to be paid off the declared state the exchange market resides.

If the Linden has value, what happens if I donate money to Relay for Life? Can I take this as a tax deduction? Do the organizers of RFL need to then maintain tax records for all the donations they get in-world? How about tips for music performers? Could those be treated as gift donations?

In the short term… 

It remains to be seen how the initial removal of gambling from Second Life will be taken by the community. I wouldn’t be suprised to have some sort of mass exodus from at least those that ran these casinos. I can already hear the virual screams complaining about the notion that gambling is bad, which will make even more people irate.  As was pointed out during Coffee With Crayon this morning, there will probably be a TON of inexpensive land out there for the land sharks to snatch up. The exchange rate for Lindens will probably change quite a bit. News reports will have yet another expose’ topic to do about Second Life.

Beyond the initial chaos, I’ll be curious to see how this intensifies the whole tax debate. Either way, the Second Life we know now will likely be somewhat different 6 months from now.

If you get out and listen to live music often, you’re often faced with paying a cover charge to get into the club/bar/etc. Sometimes cover charges range from $5 to $15 or more. All too often, patrons wonder why these places charge a cover. You’d think that selling drinks would make the venue plenty of money.

I was in the same boat for quite sometime. Although I didn’t go out often, I had always assumed cover charges were a way for the bar to make more money. Eventually, I came to believe that the cover was to pay the live musician. This made me even more willing to pay the cash, especially when quality musicians such as Matthew Ebel have graced a venue in Kansas City. While some of that money DOES go to the musicians, there are more important things that need to be taken care of… music licensing.

If you are a musician, none of this is a surprise to you. If you play cover songs, the writer of the song needs to get their cut via ASCAP/BMI. A club that plays recorded music needs to pay folks like the RIAA for the right to play that music. In many cases, a majority of the cover charge goes to paying these license fees.

Now to the point of this post: Second Life. It doesn’t matter if you are sitting in on a live concert or simply listening to the tunes being spun by a DJ at a party. Music is a big part of the activities in Second Life. BUT, is all this music being played legally? Suddenly the question becomes “Who is paying the licenses in these venues?” Is Second Life subject to the same licensing that a normal venue needs to pay. The answer is a resounding YES!

Unfortunately, few people in Second Life have even thought of these rules. Live musicians play covers from the comfort of their bedrooms with no one paying ASCAP/BMI licenses for the performance of those covers. DJs spin out hours of music for parties, but don’t pay the RIAA for the music they broadcast on their internet stream. Although I’m a huge fan of podsafe music, I’ve been to parties in Second Life where venues have taken advantage of this music. The contract they signed with places such as the Podsafe Music Network states that this music is to be used ONLY within the context of a podcast. A party in Second Life does not make a podcast (unless it’s being recorded and sent out as a podcast).

The members of the Second Life community need to wake up to these realities before ASCAP/BMI or the RIAA do. Is the the live artist responsible for the fees? Likely not. Is the stream provider responsible? How about the person that rents the stream? How about the venue itself? There are a few venues that DO require a cover charge. The Bluebird Cafe out of Nashville recently set up a L$750 cover charge for their nightly shows. We’ll likely see more venues requiring a cover charge in the future.

Either way, the time for the Second Life community to wake up to the inevitable is now. They ARE coming, and it’s not going to be pretty either way. It will likely do some serious damage to music in Second Life, which is probably the saddest party of this reality.