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Resale permissions / royalties

I've been thinking lately that one of the things that has (IMO) limited SL's growth over the years has been that creators have had so much trouble figuring out how to collaborate. One of the most basic ways to do this requires an upstream provider to sell full-perms versions of their creations, but that just begs for abuse. Ideally, they would be able to constrain what downstream creators do with their components so they can still earn an income.

Consider a concrete example. You design a texture for a flower. You sell it full-perms so someone downstream can create a mesh for a bunch of flowers that includes your texture. They make it full perms so someone who designs a house prefab can include that flower bunch mesh.

See the problem, though? Full permissions components like the texture and mesh are so easy to abuse by having some unscrupulous buyer pack it up as a freebie or otherwise simply resell it, cutting the creator out of the income.

An elegant solution occurred to me that would work for SL, at least. I'd like to describe it here so it feeds the discussion of how permissions should work in Sansar, too.

Imagine components in the real world. Let's say you manufactured silk flowers that someone then bought and put into silk bouquets that then were sold to interior decorators to do their job. In the real world, the silk flowers must still be manufactured. The interior decorator cannot bypass this step because there is no magic infinite copy capability (yet). So there is a way for the upstream component provider to continue to earn money.

Now apply this concept to SL in the following way. Let's say Mary creates a texture and sets a (new) "Royalty" property value for it. Typically, this would be equal to the sale price on the Marketplace or from in-world vending machines. Let's say Mary sets Royalty to L$10. The creator could even make it full-perms, too. Now every person who buys the asset pays the original creator. So now along comes Bob, who buys a copy of the texture. He creates a house and sells it on the Marketplace. Everyone who buys Bob's house will also be paying Mary her L$10. If Bob's house costs L$100, Bob nets L$90 and Mary nets L$10. Now if Joe buys Bob's house at L$100 and then sells the house at L$1 to a buddy, Joe actually nets L$ -9 and Mary nets L$10.

One upshot of this is that a content creator can be guaranteed an income even from derived works. This is almost identical to how music royalties work. Another upshot is that it discourages devaluation of creations that are full perms. Anyone who distributes an item derived from an item with a royalty will have to pay to do so, which will encourage creators to price their creations based on their material costs.

One huge benefit to this is that it can encourage reselling. In SL most content creators are not good at selling and marketing. They would much rather just make a thing and have someone else sell it. This becomes super easy now because the creator just sets a royalty rate and just makes it available to resellers to figure out how best to market it.

Ideally, the owner of a creation who sets its royalty rate should be able to change it over time. I would recommend only allowing them to lower and never raise the rate. If they could raise it, they could effectively disrupt downstream consumers of their products and scare designers away from using components that come with royalties for fear of getting shafted later by greedy royalty holders.

I know I couched all this in terms of SL, but it's a mature platform that most of us know well. I welcome people to discuss this idea and how it could relate to Sansar's future permissions.

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