Mobile porn is no longer science fiction—it’s the reality of the here and now. Despite analyst warnings that it might be a hard sell, the adult entertainment community has pressed forth (however cautiously) under the ever-truthful premise that “sex sells,” regardless of the format.
According to research and consulting firm Strategy Analytics, revenues from mobile and wireless adult-oriented services are predicted to be as much as $5 billion by 2010. This might sound like a lot, but the forecast represents only about 5 percent of mobile entertainment service revenues overall. Even though the amount earned by adult entertainment won’t be the lion's share of the total mobile market, it will represent a significant rise from $.4 billion globally in 2004.
Determining the size of this market is difficult, but a Strategy Analytics study suggests that more than 150 million users worldwide will access video clips wirelessly by 2008.
Much like other technologies, adult content for wireless phones is not as widely or openly discussed in the United States as it is in other countries. The lack of attention, however, has not stopped U.S. adult businesses from planting the flag in the marketplace and generating demand from wireless carriers to discuss a possible multibillion-dollar revenue stream.
Consider the target market
Who are potential wireless porn consumers? Is it the businessman who closes the door of the office and just needs a quick fix and stress release? Is it the college student wanting something more entertaining to do during a lecture than doodling? How about the bored driver stuck in traffic? The target market is an important aspect to consider and the basis for a great deal of criticism on the viability of a wirelessly distributed porn market.
Presumably, the average watcher of adult entertainment is probably alone at home, would prefer something larger than a telephone screen on which to view his or her porn, and likely wants his or her hands free from holding the phone. Adult dating services and live sex conferencing may be able to overcome these obstacles to mobile adult services acceptance, but porn will determine what kind of content needs to be available to breach the wireless barrier.
Solicitors are not welcome
One wireless technology endeavor that has proved worthless is unsolicited marketing. In 2003, Japanese courts ordered that “spammers” must pay for unsolicited wireless porn messages. NTT DoCoMo Corporation, a Japanese mobile phone carrier, was awarded more than 6.5 million yen (the equivalent $54,420) to cover its costs in handling unsolicited messages from a particular company that had sent unsolicited ads for pornography and dating services. Although dating services are not technically a part of the porn world, they are definitely a service encompassed by adult entertainment. The Japanese corporation estimated “that more than 80 percent of the 950 million messages sent to its mobile email service each day are unsolicited – although much of that is filtered out before it reaches users – and the wireless provider claims to have spent more than 4 million yen bouncing the junk email that was sent to nonexistent wireless phone numbers,” according to a report by ClickZ.com.
Although adult entertainment companies might be wise to set aside a large legal budget to offset financial fallout if they participate in unsolicited wireless activity, analysts have assessed from market share numbers that such companies may still be profitable, and therefore a legitimate market exists. The distribution of actual content, however (vs. something along the lines of a dating service), might not prove to be easy money. David Kerr, vice president of the Strategy Analytics Global Wireless Practice, says the revenue from wireless distribution "is less than half of the value of the ring tones market in Western Europe in 2002. We believe that, with so much pornography available for free on the fixed Internet, demand for adult material will continue to be largely met by fixed Internet services."
Indeed, adult mobile services companies not only have to compete with each other, but the ultimate competition for wireless adult entertainment is free content on the Web. Strategies for distribution of wireless adult content, such as actual movies or pictures, are going to need to be creative in order to compete with the free porn available on the Internet.
However, Kerr also noted in a Strategy Analytics release that “Carriers … must focus on implementing applications infrastructure platforms and business models that will open up mobile to media and entertainment industries, including adult entertainment, as swiftly as possible.”
So far, the most prominent partnership in the mobile adult entertainment industry in the U.S. is that of AT&T Wireless and Match.com. The camera phone and video phone markets may not yet reap the revenue of streamed content, but both should positively impact the popularity of dating services on cell phones—especially if the wireless carriers agree to bundle dating applications as part of their service offerings.
Philip Taylor, another analyst from Strategy Analytics, says, however, "We believe the advantages of the mobile phone as a personal and discrete device for viewing pornography are overstated. The value of the mobile channel to the porn industry will be greater as a CRM [customer relationship management] tool than as a distribution medium.”
His colleague Nitesh Patel similarly cautions “Adult entertainment publishers such as Playboy and Private Media Group will no doubt extend wireless connectivity as an option for paying customers, but even among this group we anticipate that mobile usage will be low.”
In addition to the uncertainty of the market size, the profit potential of the adult mobile industry as a whole is often overstated due to the erroneous assumption that Internet providers of adult entertainment are raking it in. Thorough analyst research has disproved the misleading and inflated report that the revenue for the global adult entertainment industry is $20 billion— In reality, the figure is closer to only $4 billion, of which only $500 million will be generated online, according to Infosyncworld.com.
This information shouldn’t deter investors from adult entertainment opportunities, but it should be considered. An accurate return on investment needs to be assessed in order to avoid losing money on such an endeavor.
Who’s hot
Although the wireless porn industry currently is perceived as a possibly risky business, several high-profile adult entertainment companies are paving the way for other trailblazers to reap similar financial rewards. Playboy appears to be the leading explorer in testing the viability of the wireless adult market, offering wireless entertainment services through licensees in several territories around the globe, including the United States, Germany, the United Kingdom, Australia, and Brazil.
An executive from European wireless facilitator Dwango says, "Playboy fans [can] experience the fun and sexiness of the classic Playboy lifestyle through custom content including Playboy-themed games, images, video clips, voice clips, and ring tones.”
Another company wading into the unknown waters isPrivate Media Group, a worldwide provider of adult entertainment products, services, and content, which offers real-time adult SMS text-chat service. Private bills customers via their phone companies for mobile access to its online portal. Consumers use the company’s services to purchase magazines, videos, and DVDs for next-day home delivery through a simple charge to their mobile phone bill. Thus, Private Media Group is combating the lack of demand for content streaming by innovatively bundling in a discreet billing and purchasing module.
In a 2003 Private Media Group release Charles Prast, then president and chief executive officer of the company, said "Despite limited financial resources in 2002 following the withdrawal of our secondary offering, Private has managed to create a significant and proven content delivery and payment system for mobile phones. As such, Private is excited to be the first company to offer adult content with an integrated payment option on mobile phones in the United States. … Our strict policies regarding consumer data make us uniquely suited as an adult content partner for mobile operators in the U.S. … We believe consumers of adult content are fed up with expensive dialer programs and endless demands for their email address, billing address, and credit card details.”
Another company to watch is Bling Tonez, which is advertising an extensive array of wireless adult services such as sexy ring tones, wallpapers, pictures, mobile teen chat, mobile strippers, mobile adult friend finder, mobile adult friends networks, SMS community, and SMS dating, according to Adultwirelessmedia.net.
Even hotter: content that will beat the skeptics
A celebrity endorsement is often a good way to gain consumer attention in a new field. Jenna Jameson got together with Wicked Wireless to release mobile adult entertainment, offering R-rated wallpapers and the innovatively branded "moan tones" in its wireless storefront.
The products first launched for Telefonica subscribers in Central and South America could be available in the United States on a limited basis in late 2005, according to analysts. Jameson, who is a notable endorsement success story with Jackson Guitars for one, commented in a press release, "We'll provide [moan tones] in the universal language of sexy sighs recognized around the world but with our own personal touch. The technology is way beyond most of us, but the bottom line is that you'll able to hear [me and] the other Jenna's Web Girls moan when your phone starts to ring. We'll also provide audio content in Spanish plus photos and text features. . . . We're quite sure this service will be quickly and secretly downloaded to friends’ phones, becoming the biggest phone-related practical joke since calling a bar and asking the bartender to page ‘Mike Hunt.’” It appears that Wicked Wireless will be successful in this venture due to its realistic target market focus and the branding partnership with an industry icon.
Those who dismiss the adult mobile market as unworkable due to the hard-to-imagine thrill of viewing porn on a small cell phone screen will likely doubt themselves out of a burgeoning and likely very lucrative new industry. It won’t be an easy market to tap (or create), but the companies willing to get creative and take a chance now could find themselves on the ground floor of a market worth billions.
Grammy-nominated musician and composer Anand Bhatt is chief technology officer of SWI Labs, a technical consulting and research group, and is an executive at Sonic Wave International Entertainment. He can be reached at [email protected].
