Kitely Mentors Group Meeting, 28 Nov 2012: summary

[Dot Macchi]

Kitely Mentors Group Meeting 28 November 2012
This week's meeting included another lively brainstorming session led by Ilan on possible features of a web-based Kitely marketplace.

The discussion started with a show of hands on who had bought or sold anything in SL, whether inworld and/or via the SL marketplace. This included most of the attendees.

When buying from the SL marketplace, most people used their L$ balance, though a couple used both Paypal and L$ (this depended on their L$ balance).

Some said they browsed for items using the SL marketplace, and then visited the inworld shop to buy them.

Marketplace -- US$ via PayPal; Inworld shop -- KC only
Ilan asked: "How would you feel if the only place to find professional content was on the marketplace? People would still sell inworld but the professionals would use the marketplace."

This was initially met with some unease -- "No, I don't like that. Here is different to SL." "Define 'professional'."

Ilan went on to explain Kitely's thinking. If items on the Kitely marketplace were priced in USD and bought via PayPal, this would enable content creators to be paid immediately -- no currency conversion required.

If content creators wanted to, they could sell inworld using KC and have a link to the marketplace entry for selling in USD (and the other way around, from the marketplace to inworld). But there wouldn't be a way to convert the KC into USD.

Going down this path will keep KC purely virtual (or for paying Kitely for its services). This will enable many forms of inworld activities that a convertible virtual currency wouldn't allow. As Ilan said: "The problem arises if there is some path which enables people to get real USD for KC. Then we enter a whole realm of potential legal and fraud related problems. By keeping real money buying separate from KC buying we avoid both these types of BIG problems."

The meeting saw some potential in this: "It sounds like it would be ok at first glance." "it does sound like a realistic way to avoid the fraud issue." "...and it is a way for designers to start to earn money."

Lynne suggested: "Low cost items - KC in world. Make something amazing for the marketplace."

Relating marketplace and inworld
Suzy said there would have to be a way to confirm deliverability, so those paying in dollars would get the item they are purchasing. Ilan explained that items would be delivered directly to subfolder of a "Kitely Marketplace" folder in Inventory.

Lynne asked whether designers might set up an inworld shop on their free Kitely world, or whether there might be a restriction ("The free world could be like Premium in SL - no commercial activity."). Ilan said there would be no reason not to have the shop on the free world.

Marketplace fees and PayPal, minimum item cost
One problem with going down the PayPal route is the issue of fees, especially for low-cost items. After paying Kitely its fee, the merchant would be charged by PayPal either $0.30 + 2.9% to 3.9% (depending on the buyer's payment method) OR $0.05 + 5% to 5.5% (if the merchant's PayPal account is set to accept Microtransactions).

Kitely's current thinking is that they would charge the buyer a $0.30 processing fee per transaction, similar to the SL Marketplace processing fee (covering up to 5 merchants with as many items as you want per transaction), and charge the seller 10% of the gross before PayPal fees. PayPal would then charge whatever they charge from the merchant when they deposit the money in his or her account.

Question: How do you feel about not being able to buy from more than 5 different merchants in one transaction?
Generally the meeting felt this would not be a problem. Most bought only one or two items at a time. Inga commented that the SL marketplace has a limit of 10 items per shopping spree. Ilan explained the limit of five arose from a PayPal limitation for using a particular payment-splitting API.

Question: Considering the fees and buyer considerations, what do you think the minimum item cost in the marketplace would be?
This is a key issue: setting the minimum too low drives people to a race to zero -- hurting merchants but offering a lot of content to buyers. Setting it too high reduces the PayPal fee effect but will prevent selling a lot of things that just aren't worth $X.

The immediate reaction of most was to suggest a minimum price of US$1 per item.

Ilan then pointed out that if merchants change their PayPal account to accept microtransactions then the fees aren't that bad even when charging less than $1. This would require merchants to submit a request to PayPal (Kitely would give some instructions on how to do this, but it remains a hassle).

Question: Is there an item you need for which you wouldn't be willing to spend $1.30? (US$1 minimum cost + Kitely processing fee)
Immediate response: textures (probably single textures, from context).

Question: Which do you think is better: a minimum cost of $0.50 or one of $1 and advising people to sell packs of items to justify the minimum cost?
The consensus was for US$1 (the $0.30 Kitely transaction fee would added to this).

Ilan asked if people often bought items costing less than $1 on the SL marketplace. Responses: "Only because they are there -- I'd not really miss them." "I get freebies when it's something useful."

Marketplace features
Question: Would you expect the marketplace to list freebies but with just links to inworld? -- under a "Inworld Freebie Shops" category perhaps
Consensus seemed to be that it would be better to keep freebies inworld, with creators advertising them via their own website/whatever. So no freebies on the marketplace.

Question: How would you feel about having items in either USD or KC in the marketplace?
Ilan explained: That way merchants could sell low cost items for KC and have the upmarket content sell for USD. But items sold for KC won't get real USD -- there will be no way to covert or exchange. The merchant would choose the desired currency (KC or USD) then the desired price. The buyer would be able to filter out items not sold using KC or USD.

Generally the meeting felt this option would be useful.

Marcel asked if the same item might be put on the marketplace twice, one priced in KC and the other in USD. Ilan asked which would be preferable: having two entries for the same item, or a single entry with two prices. The meeting felt a single entry with two prices would be better (and by implication, the answer to Marcel's question is "yes".)

Question: How would you expect to be able to discover / browse content in the store? What types of filters would you want to be able to apply?
This led to a lively discussion about search filters, categories and options, with all sorts of ideas being put forward. Given the number of possibilities, it was agreed to continue the discussion on the Kitely Users forum. [Suggestions from the meeting will be outlined in the forum discussion thread.]

Question: There will be a rating system. How do you feel about only people who buy an item being able to rate it? How important are user reviews if there is also a rating system?
The meeting felt that both a rating system and user comments were useful. "Rating systems are quicker and easier for people to use, but adding comments helps -- comments give feedback to merchants."

Many at the meeting commented on how user reviews on Amazon or eBay or the SL marketplace help them gauge a merchant's reliability and/or the quality of their products. Inga said that some user reviews give a better description of the product than the seller!

Lynne suggested: "There should be a way to amend your rating. So if the merchant responds, you can change it. Mistakes can happen." Others agreed that being able to edit comments and ratings would be helpful.

Question: What types of content would you think we shouldn't allow on the marketplace? We can't allow copyrighted content obviously (a DMCA system is in place: http://www.kitely.com/#!copyright_notice).
The meeting discussed the issue of adult (A-rated) material. Some felt that the marketplace should be uncensored, but with the A-rated items in a separate category with warnings. Ilan agreed that that would be possible, but potentially some A-rated items would be illegal or against the Amazon datacenter T&C. The meeting suggested that using the Amazon guidelines for what was appropriate in this area would be a good way forward.

The question was raised whether adult content could be kept exclusively to adult sims. Ilan said that theoretically they could filter A-rated content bought in the marketplace from going into General-rated worlds, but people can import or build content inworld which bypasses that.

Question: What types of functionality would you like to see in the marketplace that isn't present in SL's?
The immediate response was "Better search" possibly using Google-style Advanced filters, and other ideas on this theme. It was agreed detailed discussion could continue on the forum.

At that point, several needed to leave so the meeting was wrapped up with an agreement to continue the brainstorming at next week's meeting (Wednesday 5 December).