Chris Stokel-Walker | The Verge

YouTube channels are selling for millions

2019-01-23T08:20:00-05:00

A top 100 YouTube channel has sold for millions of dollars for the second time in a matter of months, and it’s the start of what YouTubers and behind-the-camera management believe is a coming wave of mergers and acquisitions. The trend is led by individual creators who worry that YouTube won’t deal with them unless they are (or look like) a formal corporation.

Enchufe.tv, one of the biggest YouTube channels in the Spanish-speaking world, announced last week that it had been sold in December. The sketch comedy channel has 19 million subscribers — more than Logan Paul and bigger than the YouTube presence of BuzzFeed. Its sale follows the acquisition of YouTube’s 13th most-viewed channel, Little Baby Bum, in July. And they may be just the beginning.

The trend is being driven by three major shifts: YouTube shunning homegrown creators in favor of Hollywood stars, creators’ ongoing struggle with burnout, and the lucrative off-platform opportunities.

“You’re at the whim of the ever-changing algorithm or a random support email address.”

Concerned with controversial creators pushing advertisers away, YouTube announced a slate of new original programming last May that starred Will Smith, Kevin Hart, and UK comedian Jack Whitehall instead of its homegrown talent. At the same time, plenty of creators have taken breaks from the site in the last year due to burnout from the intense workload, including comedy vlogger Elle Mills and Rubén “El Rubius” Gundersen, one of the world’s biggest gaming YouTubers. And creators can see the success of those who have achieved sustainability through podcasts, traditional media hosting duties, and book deals.

As a result, YouTubers are trying to look more like the mainstream celebrities they once pitted themselves against so they don’t get left behind. That often involves increasing the level of oversight and professionalizing operations, both of which are easier by pooling together or selling out to formal management, like a multi-channel network (MCN).

The increased professionalism is “a line of defense” against changes occurring on the platform, says Jason Carpentier, who helps run his wife Rachel’s art and DIY YouTube channel, Chezlin, which has over 100,000 subscribers. “[As a smaller creator], you’re really in a place where you’re at the whim of the ever-changing algorithm or a random support email address,” he says.

Whether their fear of abandonment is founded or not — after all, YouTube still relies heavily on its homegrown talent — doesn’t matter. The worry alone is making people take action. “If you’re a channel that wants to grow now, you should consider a strategic partnership of some kind,” says Derek Holder, who ran Little Baby Bum with his wife until the sale but has since stepped away entirely from YouTube as a result of the acquisition terms.

Bigger opportunities like product licensing are easier when creators are part of a team

The buyers of Holder’s channel were former executives of DHX Media, which owns the Teletubbies brand, and Maker Studios, a YouTube MCN owned by Disney. The executives set up a new company, Moonbug, to buy the channel, which has since raised $145 million in funding for further acquisitions.

Now, a majority stake in Touché Films, the production company behind Enchufe, has been bought by 2btube, one of YouTube’s biggest MCNs.

While the exact terms of the deal have not been publicly released, according to a source with direct knowledge of the matter, the purchase values Touché Films at more than $5 million. The sale closed just six months after Little Baby Bum changed hands for what Harry Hugo of the Goat Agency, an influencer marketing firm, estimated was between $7.75 million to $11 million. (Holder declined to comment on the actual figure both when the news broke and when interviewed for this story.)

These acquisitions suggest there are more to come, says Ian Shepherd, chairman of the London-based Business of Influencers, an industry body. “I would expect to see more channel sales like this in the coming months,” Shepherd says. Buyers who are able to juggle the jobs required to run big channels are attracted by the guaranteed ad revenue from their huge, highly engaged audiences.

Some creators also see an opportunity to lighten the workload by inviting bids from bigger businesses. Everyone from PewDiePie to Lilly Singh, who, for years, has styled herself as “||Superwoman||,” say they’re struggling to continue juggling being on-camera talent, producers, directors, marketers, and salespeople. YouTubers are grateful to get help handling the challenge, Holder says. “For a creator, the ability to share the workload with a bigger team of specialists is really appealing.”

By more closely embracing TV and movies, YouTube starts to look more like the media it’s trying to replace

Creators are also making the calculation that bigger opportunities, like product licensing, merchandise, and intellectual property rights, are easier to gain under group management, rather than as sole traders.

The ability to do more with their channel as part of a larger team is one of the reasons Derek and Cannis Holder cited for selling Little Baby Bum. “We’d come to a crossroads to take the company to the next level,” Derek Holder said when he sold the channel in September. Little Baby Bum was starting to branch out from YouTube to traditional TV. “In order to do that, we needed to pull together a team.”

There’s still a big divide between the cultural reach of a Hollywood star and a YouTube star. That’s why some of YouTube’s biggest independent creators, who boast hundreds of millions of views, still can’t land a television series away from YouTube. And among those who might be able to sell or join an MCN, there’s division on whether it’s worth it. In recent years, YouTubers have pointed to MCNs as feeling outdated, since they can earn ad money on their own. The collapse of networks like Defy Media and Machinima have also left some creators distrustful.

Carpentier and his wife haven’t yet taken the plunge — “We’re still weighing up options,” he says — but doing a deal could extend their reach on and beyond YouTube, shoring up future safety. Enchufe’s sketches are already broadcast on Comedy Central across Latin America and on Galavision in the US, and a movie, distributed by Sony Pictures and co-produced with the team behind Netflix hit Narcos, will hit theaters this year. Bastian Manintveld, the executive chairman of 2btube, told The Verge that owning Enchufe would help his other YouTube talent dabble in “higher-end productions” like movies and TV shows.

“Traditional media need to reach this audience, so I see us doing a lot more with them in the future as we grow in higher-end production capacity,” Manintveld says.

The risk is that by more closely embracing TV and movies, YouTube starts to look more like the media it’s trying to replace — both in front of the camera and behind the scenes. Once accessible and relatable stars may start to seem more distant from the viewers who brought them success.

Getting rich on apps in the heart of Ukraine

2014-04-16T15:06:49-04:00

“Uh guys, I think we took a wrong turn somewhere.”

Denys Zhadanov, the 25-year-old marketing director of Readdle, a Ukrainian app-development company, peers out from behind the wheel of his gleaming white Volkswagen Tiguan, vainly searching for a landmark.

We’re lost somewhere off Akademika Filatova street, a long four-lane boulevard cutting through Odessa, a sprawling Black Sea port of a million people in southern Ukraine. A brutal winter has given way to February’s slow thaw, the drab surroundings easing into slightly duller shades of gray and brown. Christmas trimmings provide a welcome splash of color: Ukraine celebrates the holiday on January 7th, but a month later many decorations remain, including a giant gorilla in a Santa suit.

Denys hasn’t driven here in years, and it’s easy to understand his disorientation. His older brother, Igor Zhadanov, 30, points the way. Alex Tyagulsky, Andrian Budantsov, and Dmitry Protserov, Igor’s three former university classmates and current colleagues, pull up in a Volkswagen Touareg. The Readdle team steps out of their cars, heading toward a five-story residential building, one of a number of similar-looking orange-yellow blocks built as cheap, temporary housing during Nikita Khrushchev’s tenure as Soviet premier. That was a half-century ago, and today the apartments are still inhabited. At the building’s dark entrance, frayed telephone wires protrude from a gunmetal gray box. A black Labrador, one of Ukraine’s many strays, prowls the grounds; snowmelt flows around discarded tires embedded in the sodden earth.

They’re revisiting Readdle’s first office; six years ago, $400 a month rented a small corner apartment on the Khruschevoka’s third floor. “We were happy here,” says Protserov, the quiet, laid-back leader of the company’s design team. “Me and Andrian, we’d cook food for all of us: sausages, potatoes, that kind of thing.” Andrian once brought in a cookbook and the two made French onion soup. “Alex was complaining for a whole week after that the flat stunk of onions!” says Budantsov, the CTO, who stands 6-foot-7 with a wispy beard and a Steve Jobsian fashion sense.

Because they worked odd hours and ran their business out of an apartment, the software entrepreneurs were often mistaken for drug dealers. “Now we’re back with English-speaking guys,” Budantsov says with a laugh, referring to me and a photographer. “They probably think we’ve gone global.” They have, just not in the way their neighbors suspected. After a few photographs and lots of laughter, a babushka yells from her nearby apartment, telling the men to quiet down and cutting short the reminiscing. Igor Zhadanov herds everyone back to their cars, and back to the office.

Because they worked odd hours and ran their business out of an apartment, the software entrepreneurs were often mistaken for drug dealers

Six and a half years ago, Readdle was four friends working out of a rented apartment. Today, the company employs 43 people and occupies most of the ground floor of an Odessa office building; the staff often gathers around catered lunches of borscht and varenyky. Readdle builds unsexy productivity apps like Scanner Pro and PDF Expert — utility products that helped the company recently reach 20 million total downloads. Continually updated software and a dedication to customer service have helped inspire loyalty, too; Igor Zhadanov claims Readdle’s user-retention rate is 10 times the average, with between 500,000 and 1 million users opening a Readdle app every month. And it’s accomplished all that despite being three flights and 20 hours’ travel from Silicon Valley.

That story — a successful company built on unflashy apps far from tech’s center of gravity — seemed simple enough the previous November, when I’d first contacted Readdle. Then things got more complicated. At the end of that month, Ukrainians began to gather in the capital, Kiev. They filled Maidan Nezalezhnosti (literally, “Independence Square”) to protest the government’s decision not to pursue closer social and economic ties with the European Union; instead, it appeared to be aligning itself with Russia. Thousands packed the square, occupying it day and night. A police raid quickly turned violent. which galvanized the opposition, leading to riots throughout the city as protesters chanted “out with the thugs” and sang the Ukrainian anthem. They occupied the city hall and called for a national strike. The government was headed toward collapse. “It looks like we have a revolution,” Denys Zhadanov tweeted.

When I arrive in February, though, Odessa seems calm. There are no barricades on the streets, no mass protests. There are just leftover the Christmas decorations and that gorilla in a Santa suit. If there’s a revolution happening, I can’t see it.

Daring to think differently

“You’ve picked a good time and a bad time to see us,” Denys Zhadanov says, picking me up at Odessa’s tin-hut airport. “It’s a bad time because it’s February and freezing, but it’s a good time because we’re really busy.” Readdle’s preparing for Mobile World Congress in Barcelona, rolling out a major update to one of its most popular apps, and working on a secret project. The company is all business, heads down, even as Kiev simmers 310 miles away.

Readdle has always been a focused company. Within weeks of the US release of the original iPhone in 2007, Alex Tyagulsky and Andrian Budantsov both had one, shipped over by a mutual friend. They loved the devices, but couldn’t believe they weren’t able to do what they’d done for years on their Palm PCs: read books. “We read a lot,” explains Tyagulsky, the company’s wildly frenetic chief marketing officer. He has the angular features of a gothic comic book character. “It’s part of the culture: you read a lot at school and university,” he says. “Reading on the phone was very natural for any person of my age and my education in Ukraine.”

He slips into faux-valley girl astonishment. “And ohmygod, I can’t read books on the iPhone. OH MY GOD! It’s crazy! We should change this!” — now smacking his hand against the desk. “This was how it started. I told Andrian: what can you do about this? That weekend, he said, ‘Alex, I think we can do this, this, this and this.’” They started coding. “It always starts from the problem and we find the solution,” says Tyagulsky today, summing up the company’s ethos.

An early, rough-around-the-edges first version of their document viewer and manager, ReaddleDocs, caught Apple’s attention. The company asked if Readdle would submit its app for the launch of the new iOS marketplace, the App Store.

“We didn’t have any business plan or any other crazy stuff. We just built the app. We put it on the App Store.”

The coders didn’t have much time, and hunkered down to work. As a freelancer, Budantsov could make his own schedule, and Protserov and Tyagulsky hadn’t taken time off from work in years, giving them two months’ vacation time to devote to the app. When the App Store launched on July 10th, 2008, Apple claimed it had more than 500 apps — today that number’s more than 1 million. And ReaddleDocs was there at the beginning, selling for $14.99.

It was a gamble. In 2008, admits Tyagulsky, “We didn’t have any business plan or any other crazy stuff. We just built the app. We put it on the App Store.” A week later, he saw the sales figures. Readdle had made $3,000 in revenues. “I called my boss and told him, ‘I’m quitting my job,’” Tyagulsky says, his shoulders shaking with laughter. “We understood then we had a chance to build the company.”

Nine months later, Denys says, “We were all sitting together and suddenly Dmitry stands up and shouts, ‘Woohoo! We’re rich!’ I thought he was drunk.” He wasn’t: Wall Street Journal technology journalist Walt Mossberg had listed ReaddleDocs among “some favorite apps that make the iPhone worth the price.”

After Mossberg’s endorsement, sales jumped 800 percent. According to Denys Zhadanov, Readdle was pulling in $500 to $1,000 a day. For the four men who’d just wanted to read books on their phones, it was a breakthrough.

From the App Store to the revolution

From its open-plan office, where colleagues are constantly intermingling, to its flexible workday, where employees come and go as they like, Readdle resembles the typical tech startup. But Odessa is not Silicon Valley. At least, not yet.

For that matter, Odessa isn’t even Kiev, Ukraine’s capital and largest city, where most of the country’s (relatively few) venture capitalists, accelerators, and entrepreneurs gravitate. Igor Zhadanov, sitting at a conference room table in Readdle’s Odessa offices, suggests his tech-sector colleagues lack the entrepreneurial zeal necessary to forge new, homegrown companies. Like many businessmen who’ve succeeded through a combination of timing, determination, and not a little luck, he’s looking for the same gung-ho attitude among his compatriots.

The room has the post-collegiate stylings of an early-stage Valley startup — a black leather couch and a foosball table whose dusty plastic players suggest it’s more decorative than functional — but Zhadanov believes Ukraine, less than 25 years after declaring its independence from the USSR, still has some catching up to do. “Timewise, we’re maybe 15 or 20 years behind the rest of the world,” Zhadanov says, in everything from traffic signals to Starbucks (there are none in Odessa) to entrepreneurial spirit.

Yet there’s no lack of IT resources in the country. There’s ubiquitous high-speed internet and a modern telecommunications infrastructure. Schools and universities produce large numbers of technically proficient graduates, Readdle’s co-founders among them. Many go on to work at software-development companies in Odessa, Kiev, and Dnipropetrovsk, the three major cities of Ukraine’s IT sector. (Odessa also has a reputation as a haven for hackers and credit card fraud; some evidence suggests the city as the origin of the recent theft of 40 million credit card numbers from Target.)

When graduates get available jobs and competitive salaries, Igor Zhadanov believes, many become content simply to carry out other people’s instructions and ideas. (One estimate pegs Ukraine’s outsourcing market, providing IT resources for Europe and the world, at $2 billion, with more than 50,000 employees.) “That’s the core thing the Ukrainian IT industry should learn fast,” he says. “How do you change your mind from building something you have been provided with, a design and specification, to something you don’t know what it’s going to be tomorrow?”

And, he adds, “there’s a huge inflation of titles and salaries.” In Readdle’s early days, they could hire a top-quality developer for $800 per month. Today, a graduate working as a basic QA grunt can earn as much as an accountant, says Zhadanov. That’s still a better value than the United States, though. “If we wanted to replicate PDF Expert in the US right now,” Igor admits, “it would cost us millions and millions of dollars.”

But the business environment is not all cheap, talented labor. Igor Zhadanov doesn’t want to say much beyond admitting that “running a business in Ukraine is challenging,” but cronyism and corruption have defined much of Ukrainian society in the generation-long hangover following Soviet rule. In its 2013 index of perceived corruption, the anti-corruption charity Transparency International ranked Ukraine 144th out of 177 countries, tied with Nigeria, Iran, and the Central African Republic, among others. By those rankings, Ukraine has the highest level of perceived corruption in Europe. Similarly, the World Bank ranks the country 112 on its “ease of doing business index,” though that’s up from 140 in 2012.

Stay or go?

Readdle’s founders are not revolutionaries. The company has survived the past six years with an established niche: simple-to-use productivity software aimed at businesspeople willing to drop $9.99 on an app. They don’t chase trends; they’re not producing Flappy Bird clones. They base their business on loyalty.

But in six years competition has grown; the game has changed, and loyalty might be in short supply. “Across the App Store the number of paid downloads has decreased,” says Denys Zhadanov. “The industry went crazy. It’s a race to the bottom. More and more people just get free apps, and they have no idea of how much effort has been put into the development.” Readdle responded by adopting a freemium model for some of its apps, and offering its file manager for free.

Its fundamental proposition, though, its essential ethos, remains the same. “Here’s the deal,” Denys says, “you pay us $7 up front. You get this product. You get continuous updates for it, you get customer support” — a large screen in the middle of the office tracks the number of outstanding customer support emails: every day begins at around 2,000, and by the time I leave in late evening it’s dropped back, only to creep up again by the next morning — “and we always listen to our customers and improve our apps. We’re making it a fair trade.”

Igor Zhadanov sits down for a meal at Steakhouse, a haute-rustic steakhouse in the heart of Odessa. Nearby, waiters arrive with a butcher’s block laden with raw meat for pre-cooking inspection by the diners. Beef from the United States arrives regularly in the city, Zhadanov says — but it can be hit or miss. He orders the Ukrainian veal.

Why stay in Odessa? I ask.

He lists the obvious answers: it’s cheaper, and that means it’s easier to experiment. He believes there’s just as much talent and knowledge in Europe as in Silicon Valley, and Readdle can draw on that. He’s skeptical about taxes in the States, and believes he’s already built something impressive in Odessa. “The fact that we’re in this building is the result of four different people working really hard for six-and-a-half years,” he says.

His younger brother agrees. “We made it work here,” Denys Zhadanov says, “and being away from the Valley is on one hand bad. We’re kind of disconnected from the industry.” On the other hand, he says, “it’s good to be immersed in the Valley for some time, to drop in and get the spirit of it, then to get out before you stay there. It’s a bubble.” A bubble of both easy money and received wisdom, he might be saying. He appreciates his city’s comparatively down-to-earth atmosphere, and thinks it makes his company better, but he’s sometimes frustrated by Ukraine’s lack of mobility, particularly in Odessa. He’s thought about leaving: maybe he doesn’t want to be here in a year, depending on what happens in the meantime. But he’s not willing to leave yet.

Two months later, he’s vacationing in Venice, Italy, taking some time to clear his head. Since December, the revolution has gotten complicated. Russia refuses to recognize Ukraine’s opposition parties as a legitimate government; Ukraine has become the subject of a battle of words between Vladimir Putin and the West. Crimea, the southeastern peninsula formerly belonging to Ukraine, voted to join Russia; Russian troops flowed into the region, with tens of thousands remaining along Ukraine’s eastern border. Most recently, Russian-separatist demonstrators captured Ukrainian armored vehicles sent to reclaim eastern towns for the government in Kiev.

When Kiev began to roil in December, Denys was glued to online video streams, the violence in the background 12 hours a day as he worked. The upheaval didn’t affect Readdle as a company, he emails, but “everyone is affected on a personal level to a certain extent.” The company’s staying focused on his customers, and “the spirit inside Readdle is healthy.”

As for his country, Denys is optimistic. “With time, I began to hope about a new and better country, with less corruption, with better people, with democracy,” he writes. Three months of turmoil have united Ukrainians worldwide, and now Denys wants to help build a better country. He wants to see a democratic state, an educated people, a clean government, and economic growth. “It will be a hard transition period for Ukraine,” he writes, “but I really hope that we can build a better country so that people like us can create outstanding businesses that operate globally.” And he’s going to be there to help make that happen.

Photography by Alex de Mora

Second Life’s strange second life

2013-09-24T12:09:48-04:00

second life

Do you remember Second Life? Set up by developer Linden Lab in 2003, it was the faithful replication of our modern world where whoring, drinking, and fighting were acceptable. It was the place where big brands moved in as neighbors and hawked you their wares online. For many, it was the future — our lives were going to be lived online, as avatars represented us in nightclubs, bedrooms, and banks made of pixels and code.

In the mid-2000s, every self-respecting media outlet sent reporters to the Second Life world to cover the parallel-universe beat. The BBC, (now Bloomberg) Businessweek, and NBC Nightly News all devoted time and coverage to the phenomenon. Amazon, American Apparel, and Disney set up shop in Second Life, aiming to capitalize on the momentum it was building — and to play to the in-world consumer base, which at one point in 2006 boasted a GDP of $64 million.

Of course, stratospheric growth doesn’t continue forever, and when the universe’s expansion slowed and the novelty of people living parallel lives wore off, the media moved on. So did businesses — but not users. Linden Lab doesn’t share historical user figures, but it says the population of Second Life has been relatively stable for a number of years.

You might not have heard a peep about it since the halcyon days of 2006, but that doesn’t mean Second Life has gone away. Far from it: this past June it celebrated its 10th birthday, and it is still a strong community. A million active users still log on and inhabit the world every month, and 13,000 newbies drop into the community every day to see what Second Life is about. I was one of them, and I found out that just because Second Life is no longer under the glare of the media’s spotlight, it doesn’t mean the culture inside the petri dish isn’t still growing.

Packing tape and pyrotechnics

One of Second Life’s million-strong population is Fee Berry, a 55-year-old mother of three children who lives in Middlesex, a leafy suburb of London, England. And though her Second Life avatar, Caliandris Pendragon, is cool and calm, I’ve caught her at a bad time.

“I’m moving house,” she explains. In the background I can hear boxes being heaved back and forth, tape unspooling and being wrapped around packaged items. At one point in our conversation she has to ask her son to keep the noise down.

Berry became a stay-at-home mom after the birth of her first son and started gaming in 1998, playing Riven, a more puzzle-centric sequel to Myst, a popular adventure game first released in 1993. Both were developed by Cyan Worlds, at the time simply called Cyan. A friend introduced Berry to Riven when she bought a second-hand Apple Macintosh; she was initially wary, telling the friend, “I don’t think I like those sorts of things.” She finished the game within three weeks.

She stuck with games produced by Cyan for the next six years, graduating to Uru, their MMO adventure game. When Cyan discontinued support for Uru Live, the online section of the game, Berry, like many others, moved on to an alternative. As with everyone entering their Second Life, she was dropped from the sky. Her feet first hit the turf of the new virtual world on February 12th, 2004.

“I can shrug off my role as a mother.”

“It’s like every toy you ever had, all rolled into one,” she tells me in awed tones, recalling the power of the game to keep her playing nearly a decade on. It’s also liberating, she explains, allowing her to forget about the kids, the responsibilities, and the extra few inches she’d rather not have. It lets her cut free.

In Second Life she doesn’t have to be a graying 55-year-old mom; she can keep the bright eyes and warm smile, but can pinch, tuck, and pluck the other bits so that she becomes 25-year-old Pendragon, a vampish babe with full lips, long jet black hair, and heavy eyeliner.

“It’s like every toy you ever had, all rolled into one.”

“I can shrug off my role as a mother,” she explains. “I can swear or misbehave in Second Life in a way I couldn’t in real life.”

The second-ever person I meet in Second Life, in a drop-off zone, proves that point. HOUSE Chemistry’s been in Second Life for nearly six years. The 28-year-old lives in New Orleans, and may or may not look like his in-universe avatar: a 6-foot-7-inch-tall man wearing all black, with thick brown dreadlocks down to his waist — he won’t say. Regardless, HOUSE Chemistry’s warm and welcoming, and seems to enjoy taking me under his wing, explaining the universe to me.

When I ask him what he does in Second Life, I’m expecting him to advise me to talk to people, make friends, and take some classes. He replies a little differently: “Anything I want. Walk near me. I’ll set this place on fire, watch.”

And so he does, under a clock showing 11:26, on one of Second Life’s introductory islands. Truthfully, I’m not impressed: it’s a pretty poor-quality animation with blocky gray smoke and weirdly flesh-colored balls I presume are meant to represent the actual flames. Still, I politely show my admiration and ask him whether he’d want to set stuff on fire in real life.

“No,” he says. There’s a brief pause. “Take your time. You’ll learn how to do all kinds of cool shit.”

I try and move the conversation on, asking HOUSE Chemistry what he does in real life. “I build things,” he replies. I’m intrigued by this person who builds things in real life, then sets polygonal representations of them on fire in Second Life, and say so out loud. He ignores it, moves on, shuts down the conversation.

“You got it now,” he says. “Enjoy.”

You a wife or a men?

“You a wife or a men?”

The concept of an avatar in the sense we know today first emerged in the 1980s from the LucasArts game Habitat and the cyberpunk novels of the time. Philip Rosedale, who created Second Life, describes an avatar as “the representation of your chosen embodied appearance to other people in a virtual world” — one that often blunts the harsh edges and tones fat into muscle.

There are people like Berry who use their second lives as a way to play a different role, a smudged mirror reflection of themselves — and that’s great. But there are those who believe that identity in Second Life is too opaque.

On my first day in-universe I meet Larki Merlin, a 40-something German Second Lifer who likes to punctuate his conversation with written-word emoticons. “I am all time on big smile,” are his first words to me. His next words are to the point: “You a wife or a men?” Merlin’s asking that for a good reason; he stepped away from Second Life two years ago “for a long time — too many crazy people, only sex and lies. 50% of the girls are in rl [real life] boys.”

This might not be far off the truth: Berry tells me that at one point Linden Lab said six of every ten women in Second Life were men behind their avatars. One of the most famous women in Second Life, Jade Lily, is a male member of the US Air Force named Keith Morris. Morris real-life married another Second Lifer, Coreina Grace (real name Meghan Sheehy) in 2009.

Despite this, Merlin’s back, but he admits that there are slim pickings in the universe: he’s met maybe two of a hundred friends in Second Life — and “you waste 200 hours to find them.” He’s back, but barely.

“There’s huge areas of Second Life that just look like suburbia and people will build a house and put a TV in it.”

Every story has two sides. I asked Berry about her experience in Second Life: has it made her more comfortable, more confident? Has it changed her first life persona in any way?

There’s a long pause. “Err… It’s made me realize other people are not as scary as they appear to be.” The first person Berry ever encountered in a virtual world was in Uru. “And I ran away,” she admits softly.

“I don’t know what I was afraid of, really. But they spoke to me and I ran away, because it was a stranger.” As a woman, Berry says, the interaction was completely the opposite of what she’d been taught: “You wouldn’t strike up a conversation with an unknown male because there are dangers associated with that.” But when she plucked up the courage to stay and chat, “it made me realize I’d been frightened of that 5 percent instead of realizing 95 percent are decent.”

When mainstream media outlets touched down in Second Life seven years ago they tended to focus on the strangeness of it all. People were having sex through a game and dressing up as foxes and kittens. The reality, says Tom Boellstorff, a professor of anthropology at the University of California, Irvine, is more prosaic: “Humans already live many different kinds of life: online is just one more of those kinds of lives.”

“You can do anything in Second Life,” Boellstorff continues, his voice rising in a lilt. “You can do crazy stuff. You can be a ball of light or you can be 500 feet tall, or you can be a child, or a dog, or whatever.”

You can do all that. But most people?

“There’s huge areas of Second Life that just look like suburbia and people will build a house and put a TV in it,” he says. “They’ll watch TV with their friends online.” An entire world of opportunities out there and people choose to be couch potatoes. It is, eerily, just like real life.

Ghost towns and boom towns

“We thought of Second Life as complementing your first life,” Hunter Walk, one of the original Linden Lab team members working on the universe from its launch, tells me. It was conceived as a space that gave you a set of choices that were missing from reality. “In your first life you don’t necessarily get to fly. Here you can fly. In your first life you can’t choose what you look like. Here you can choose what you look like — and it’s malleable.”

That changeability extended right back to the developers. “The story of the internet in general is one of unintended consequences,” begins Boellstorff. “It’s about repurposing and doing things the original designers did not design for.” As the custodians of an internet-based community, Second Life’s developers were little different. When they began sketching out the universe early in development, Linden Lab deliberately left things open-ended. “The early users showed us the way to where the community was,” explains Walk.

That community is now being overlooked, believes Berry, who began working for Linden Lab making textures and music in June 2008, and was fired in June 2013 after a dispute over money. “After five years working quite closely with them, I still don’t feel I really know what the culture is,” she says. “They simply never seem to understand their own product. It’s ludicrous that they don’t understand how people use Second Life, what they like it for, what they want it for.”

There’s no such thing as an average Second Lifer, but some people just don’t get it, no matter how long they spend in-world. Berry tried, years back, to convince her mother and siblings to join the world. “I’ve had very little luck. If I can’t get them to try it they’re obviously not going to understand it. And it’s really hard to explain it to anybody else.”

A giant bubble floated down from on high. “Step in,” she said

For the longest time I didn’t get it. I’d spent several weeks pottering about, teleporting from one place to another. I stood on a dock of a bay, overlooking an azure sea and hearing the whistle of the wind. I walked through a cold, gun-metal gray futuristic world full of walkways that reminded me of any number of first-person shooters. I’d chased a woman, inexplicably sprinting, arms flailing, through the palazzos of Milan, looking at the fashion boutiques. I’d visited London — in reality a tired collection of worn cliches, a cardboard cut-out of the Beatles crossing the street down from a roundabout with a red telephone box on one corner. It was kind of cool, but it was also corny.

Then Berry invited me to Nemesis. It’s where she lives in-universe, all rolling green hills and gated houses. Berry — or Pendragon, as she was in this world — wanted to show me just how magical Second Life could get.

She had in her possession Starax’s Wand. Created by a user, it was at the time the most expensive item a user could buy in Second Life. Clever coding meant that if its possessor mentioned certain words in-game — “money,” for example — the universe would change around it (a briefcase full of cash would descend from the heavens and spit out greenbacks, for example).

The wand has been largely outmoded by updates, but some commands still work. We were standing outside the perimeter wall of Berry’s house, green grass beneath our feet. Her avatar hunched over and moved her hands on an invisible keyboard: the animation shows when the real person is typing. In the chat box appeared a word.

“Bubble.”

A giant bubble floated down from on high. “Step in,” she said. I did. And the bubble rose, and I saw a bird’s eye view of Nemesis. I was suspended in mid-air in a giant bubble, and could roll over the shoreline high above the sea. I couldn’t help but smile; finally, I’d found my niche.

People come to the Second Life universe for different reasons: some go there to escape their reality and to stretch the boundaries of their lives in ways forbidden by the constraints of their bodies or the norms of society. Some go to meet friends and family; there are some who want to create buildings, paintings, and whole new worlds. And some — big companies and small entrepreneurs — hope to make a living.

There’s no such thing as an average Second Lifer, but some people just don’t get it

Even after the deluge dried up there’s a booming economy in Second Life: Berry began taking meetings in 2006 with companies looking to extend their reach into the universe. Her knowledge of the world was her selling point, helping companies avoid missteps in this strange, new place. “Reportedly Adidas spent a million dollars on their sim in Second Life,” Berry says with a laugh. What it got them was a single store selling sneakers. Problem was, the sneakers slowed down the universe: “Anybody running an event would say if you’ve got Adidas trainers on, take them off because they were lagging the sim so bad!” Ironically, Berry says, it was when the big companies descended on Second Life that the place felt most like a ghost town, and not a boom town: they didn’t get the ethos, didn’t engage, and left empty offices and buildings.

Berry’s earnings from Second Life have varied enormously: a poor year can see her earn £5,000 ($7,600) for her consultancy work, as well as creating music and textures for avatars and locations in-world (a few years ago she specialized in providing Christmas trees to those looking to get into the festive spirit). “It’s not a fortune,” she explains. “I haven’t earned a lot of money from it.” But it pays the bills.

Second Life isn’t a whole new world — that’s something everyone, from Berry, to Walk, to Boellstorff, has been keen to stress. For those truly committed, who have property, and cash, and a business, and money invested in the universe, it’s simply an ongoing extension of their lives: “That’s why we chose the name,” Walk says.

Settling a civilization

Second Life has survived its first 10 years, but every society rises and — inevitably — falls. So what of Linden Lab’s creation? Will people still be living Second Lives in 2023?

“I wouldn’t be surprised to see Second Life around for quite a while,” says Hunter Walk. It’s been seven years since he left the prosaically crazy universe, but he still remains on its periphery. For a couple of years after leaving Linden Lab he occasionally dropped back in on the world, teleporting from place to place and checking out the sights. “It never quite got to the point where it was something I’d be able to integrate into my life,” he says regretfully. Instead, he now reads about it, takes pictures, and watches videos.

Tom Boellstorff looks to history for precedent. LambdaMOO was the original MOO (object-oriented MUD, a multi-user dungeon game). Set up so long ago that its creator, Pavel Curtis, can’t remember whether it went online in 1990 or 1991, it lives on today through the benevolence and hard work of a core group of volunteers that refuses to let the world die.

Fee Berry’s less sure. Resident for nearly a decade, she’s seen a lot of areas of Second Life fall victim to the decay that’s part of a relentlessly forward-looking world: “They haven’t really preserved the history of Second Life, as far as I can see, and don’t really rate it as anything worth saving. I think that’s a shame.”

Her ‘Second Life’ relationship became a real-life romance

Fired by Linden Lab and exasperated at the direction the universe is taking, she’s spending more time in OpenSim, a financially free and less constrained version of the Second Life architecture, working on paid projects. There’s one drawback: it doesn’t have a strong enough community or economy — yet. If it gets those, it wins hands down, she says.

But that doesn’t mean she’s quite done with Linden Lab. She starts extolling the virtues of OpenSim, but brings it back to Second Life.

“I hope to get a better work–life balance, and to be able to spend entertainment — leisure time — in Second Life,” she says. I get the sense that deep down, she’s made such a strong connection that she’s permanently a resident there. After all, her Second Life relationship with partner Oclee Hornet became a real-life romance. “He had a bald avatar, which is quite unusual in any world,” she says. “I was interested to know why.” Berry spent most of May in Rotterdam, where Hornet — real name Eelco Osseweijer — lives. The two own a two-story red brick home together in Second Life, on which they spend $295 a month for the freehold to the land. “There’s a possibility we will live together [in real life] at some stage in the future,” Berry explains.

Despite it all, I ask her, despite the changes, and the intractability, despite the disputes and the stagnancy, you’re still a Second Life fan?

“Oh yeah,” she says. There’s a pause and her voice grows richer, the kind of alteration in voice that only comes when speaking through a genuine, heartfelt, and involuntary smile.

“Oh yes. Yes.”