Not that he likes to toot his own horn, but Michael Herman is pretty impressed with the numbers at online Video-on-Demand giant AEBN.
“We’ve kind of gone past this transitional phase here, where we grew so fast we could hardly keep up,” notes Herman, Director of Business Development for the Charlotte, N.C.-based company. “I know it’s been estimated that we control roughly seventy percent of the North American VOD market, so we’ve grown that fast in less than ten years.”
After starting with just eight employees in its first two years, AEBN is approaching 250, and about to take over the only suite left that it didn’t occupy in the large complex it moved into after its birth in 1997. The company has more than 1,300 studios and 60,000 titles in its content library — more than 10,000 of these are gay.
“We’ve not only caught up, but improved our technology, made everything faster, increased our output. We’re outputting anywhere from two thousand to three thousand new titles a month,” Herman says. “We’re doing new bitrates, new formats, download-to-own, we’ve already got DRMs in place and future technologies in place for anything.”
It started nine years ago when Scott Coffman was selling DVDs through the brick-and-mortar world. He had just developed a website and was trying to figure out a way to get his videos on the website. After acquiring a warehouse with AEBN’s Media VP, the two figured out a way to make it work — and some Sprint commercials gave them an idea.
“The growth was purely organic, and it was these ‘ten cents a minute’ commercials that inspired them to start the pay-by-minute system on the Internet,” Herman says. “As far as we know, we were the first to ever do that. We can’t find anybody who did it before us, and certainly in adult we were the first to do VOD pay-by-the-minute. That’s how our whole business model started.”
With 30-plus developers and an $11 million data center, AEBN runs an incredible bandwidth that results in clear video across the globe, whether it’s in the United States, Amsterdam, or Japan. “We look at ourselves as a technology company, we don’t view ourselves as an adult company,” Herman says. “We look at things like IPTV, mobile — our platform auto-detects five thousand device types. Our next phase is going to be to integrate that into all our theaters, so that mobile is not separate. IPTV should not be separate down the road. It’s all a convergence, that’s the future of technology. We view it as access points. We need to make sure that whatever becomes huge in the marketplace, we can deliver video to it.”
And with virtually every major gay studio under its belt, AEBN is as dedicated to pleasing its clients and webmasters as it is its customers. “AEBN, according to the T3 report, has the world’s largest affiliate network, period. Now with that, we reach over four percent of the world’s population online every day.” Front-page categories feature individual directors, stars and studios, while different site templates allow for categorization of content, and personalization. For optimal search results an "extended functionality department" screens each film to determine every possible category it contains.
“The basis for our company was a simple idea, but it was a different idea for that time. Back then in adult, everyone was kind of with the business model of ‘Screw the Consumer’ — get as much as you can from them as fast as you can, get them on recurring billing, they won’t notice it for a few months,” Herman says. “And here, our business model is all about making nice with the customer and keeping them coming back with a good quality product. They only pay for what they use, and they keep coming back. We have five users who have spent over $20,000 with us.”
It’s AEBN’s dedication to quality — in both video and customer/ client service — that has enabled it to grow dramatically, and a new internationally focused venture is set to debut soon. The company has been able to easily keep up with the enormous storage demands necessitated by higher bitrates to provide top-notch quality, something that gay consumers in particular demand.
"The gay consumer converts better. They’re more of a spender. They convert higher — more transactions per user — and they typically know what they like. A lot of times, the gay user may not cross over categories. If they like twink, they’re not going to go watch bear, whereas the straight consumer will really just look at anything, from amputee porn to wheelchair porn,” Herman notes with a laugh. “It’s actually kind of ridiculous…”
Contact Info: AEBN.net; 800-628-0241; [email protected].
