A little more than a year ago, there was a major shift in the pay site market. It wasn't terribly noticeable at the time, but it has grown into sort of an industry-wide mantra. In fact, if you have finely tuned senses and you open your window and stick your ear out, you might be able to hear the reverberating chant from pay site owners – re-ten-tion, re-ten-tion, re-ten-tion...
Long gone are the days of throwing together site after site. Here, are the days of providing high-quality, frequent updates and improved navigation. With a pay site market that has no shortage of competitors offering strikingly similar products, there just isn't any other choice than to focus on good-old-fashioned customer service, unique content, and innovative technology.
The bottom line is, if a pay site isn't serving up something original or a flawless surfing experience, the surfer is going to go elsewhere and the site is going to die a painful death.
"It's at that point where surfers are just smarter," said Laurel Hertz, Internet marketing director for FlyntDigital.com, the affiliate arm of Larry Flynt's Hustler sites. "It's much cheaper to sign up for a trial and then just cancel."
Cancel, and move on to one of the million other Adult sites on the Web. Today, surfers are making a lot of Webmasters work a lot harder.
The Good Old Days
There was a time when building a pay site meant nothing more than buying any old content, throwing it together and, viola – a porn surfer's paradise.
"It was really easy to build sites and a lot of people even had the same member's section – they would just build different front ends," said Mike Price, CEO of SilverCash.com, which housed 97 pay sites at press time.
"I could sit down in the old days and say, 'I'm going to make a site today,' and I could build a site in one day by myself."
That was circa 1996, which seems like an eternity ago in Internet years. There wasn't much competition in the Adult marketplace at the time, which enabled a lot of pay sites to employ the same content, present it differently and entice the surfer to stay or to at least forget about the monthly recurring charge on their credit card.
The Content Shift
Around the same time, amateur production house Homegrown Video was flying under the radar with their exclusive-content niche site. Homegrown president Farrell Timlake was already an Internet veteran, having sold picture sets on BBS boards previous to 1995, when Homegrown purchased their first domains.
Soon after, Timlake received a visit from Jeff Newman, who was peddling some amateur videos he shot on a San Diego beach. Although they didn't want to distribute Newman's work, Timlake pointed him towards the Web. Employing the help of a clever traffic deal with SexTracker.com, Newman would go on to develop the Internet phenomenon of Busty Amateurs.
"A few years back, some clever folks came in and said 'I'm going to try something different. I'm going to have less content, but it's going to be exclusive. It's going to be something you can't find anywhere else,' and it really represented a shift in the industry," said industry veteran Quentin Boyer, vice president of marketing for XBangCash.com. The revolution had begun.
Exclusive-content niche sites started to take over the market, driving the mega-redundant mega sites into a smaller and smaller corner.
Conversions and retention rates plummeted for the cobbled-together sites and the industry as a whole shifted towards producing their own content.
Of course, exclusivity carries the drawback of being a pricier model. Those who haven't jumped on the exclusive-content bandwagon today cite the fact that they pay about one-fourth the price by licensing, rather than creating, the same amount of content.
Still, exclusive-content sites have grown exponentially in number over the years, thanks in large part to the reality craze. Reality-based pay sites, like Bang Bus and MILF Hunter, now take up a large part of the market and more than one affiliate program has come to prominence based on their popularity. As a result, almost everyone to wanted a slice of the pie.
This saturation has caused the reality market to level off and pay site owners to more closely evaluate their methods for success.
"There will always be a market for reality, but I don't think it's the hot thing that you have to have right now," Price said. "It's good to have some, but we're not shooting any reality sites right now."
In Reality
There is a general consensus in the industry that the people and sites that are going to thrive are going to do so by focusing on surfer experience and new technology. The retention buzz has shifted from great, new content (i.e. reality) to focus on the all-around product.
"There are so many pieces to the retention puzzle and I think people have a tendency to focus on only one or two chunks at a time," Boyer said. "The key is not either content or marketing, technical infrastructure or design – the key is in getting all those elements solidified and making them work together to produce the desired results."
Some people have gotten the message.
"Over the past six months we've really made a point to work on retention, as opposed to just adding sites. You can have 150 sites, but if the member's area isn't easy to navigate and clean, what's the point?" said Stephen Bugbee, vice president of GigaCash.com, an affiliate program housing more than 60 sites.
Things that were glazed over in favor of knocking out a new reality MILF site every week, like ease of navigation, ever-changing content, links that work and videos that play, have now returned to paramount importance. As a result, site production has slowed down industry-wide.
"We were launching one site a week, but it was difficult to keep up with all the tools, the new designs and updating the content in the member's area," said Raffi Vartanian, owner of the Adult Lounge affiliate program. "It's a matter of yeah, we had a problem making sure affiliates had enough tools and surfers had enough updates in the member's area."
Employing 12 people in-house, Adult Lounge is one of the larger affiliate programs. The company boasted more than 100 sites as of February, but decided to temper their release schedule from one site a week to one a month at the beginning of 2005.
Bugbee, whose GigaCash program releases less than one site per month, on average, is now focusing almost exclusively on the surfer experience.
"My goal is for the user never to get through all the buttons I have and all the content I have and find what they want regularly, so they don't go anywhere," he said. "I think that's been a big help to us, but it always comes back to does the stuff work right? Going in and testing to see if things work right are important."
So important, that the company employs a full-time site tester who goes through five sites a day testing everything – buttons, links, banners, join pages, etc. – to make sure they work correctly.
Not only has site production slowed and customer service become more important, but content models have also undergone a makeover.
The exclusive content rage brought on by the popularity of reality sites isn't such a rage anymore. A lot of players are becoming more cost conscious.
Companies like Silvercash license non-exclusive content to use as filler in their sites, while still filling the bulk of them with the exclusive content believed to increase retention. Adult Lounge does the same, but also builds and markets exclusive-content sites through partnerships with studios such as Legend, Acid Rain and Victoria Givens Productions.
Another model gaining popularity is licensing semi-exclusive content, which is cheaper than exclusive and still scarce enough to entice the surfer.
"People have realized that exclusive content is great, but it's really expensive. However, if you only have a small amount of it you're not going to retain people because they rip through the videos in a night and they're gone," Boyer said. "So what we're getting is an average of the two models. People are putting out content on the front end of their site that's exclusive or semi-exclusive – quality content – and then they mix in a certain amount of the plug-ins as well, as sort of filler to hold people."
There are, of course, exceptions to the rule.
PornDollar.com has been producing hardcore sites since 2001 and has always licensed its content. Their offerings feature edgier material like double anal and interracial gang bangs.
"Everybody wants exclusive content and that model worked before. Then reality came in, everybody started shooting their own content and that killed the business model," said PornDollar's marketing director Lori Z. "What PornDollar sells is amateur hardcore. We have just about every variety you could ask for in a hardcore site."
However, in perhaps a not-so-strange twist of fate, PornDollar was at press time making plans to extend its brand through a DVD line. The exclusive content shot for the DVDs would also be available on their Websites, once again producing the content merger model.
And while the dominant content model has become clear, the dominant content type is up for debate.
The Hot Niche
It has become apparent that there is no new reality in the current climate – no hot, new niche.
"You really shouldn't worry about what content, or what niche, or what's new," Vartanian said. "This is all there is out there. How much newer can it get?"
Price, who has been building sites since the salad days of 1996, suggested that maybe there never was a hot niche to begin with. SilverCash tailors their sites as much to their peers as they do to the surfer.
"We'll just kind of look at the market and see what's going on. I truly believe the surfers don't create the niches, but that we, the Webmasters decide what the niches are for them and I don't even think we realize it," Price said. "If all of a sudden I went out and released 10 of a certain type of site and then another large affiliate company did the same thing after that – you get two or three guys doing it, then everyone does it and it starts a trend. It kind of happened with reality sites and I don't think the surfer necessarily wants reality sites. I think we just gave it to them."
With the apparent lack of faith that any one niche is going to mean success, technology has become the new niche – one of the driving factors behind what pay-site companies' are doing.
"Technology is the key to building sites now," said Fred Valiquette, president of Montreal-based affiliate program BrainCash.com. "Everybody's got exclusive content and reality sites, so you need to figure out how to do it better than the other guy with the same stuff. I think the best opportunity in the market right now is to be first in adopting new technology."
That means decision makers are more focused on video, Video-on-Demand (VoD), live chat, mobile content, or models of interaction like personals sites.
For example, GigaCash's highest converting site is video and cam site Real Time Videos, which Bugbee said does twice the joins of any other GigaCash site.
"If I'm surfing the Internet and want to look at some porn, I'm not looking at pictures. I'm looking for video," Price said. "In the old days, people looked at pictures because they were fast and the video was crappy. Plus, if you wanted to watch a video, you were only going to get a three-second clip. It wasn't going to do it for you."
To take it a step further, technologies like VoD appeal to the culture of instant gratification.
"The user wants to login, find what they're looking for and logout," Bugbee said. "The VoD model is great because the user gets to choose how much they want, they have the security of not being rebilled, the remaining time doesn't go anywhere and they can use it at their leisure. It's a no-brainer. I don't think subscription sites are going anywhere anytime soon, but people need to start thinking about embracing these types of business models."
Video, VoD, and interactive models have faired very well in the market over the last year or so, but not all attempts to push the technological envelope have met with resounding success. For example, Adult Lounge took a shot at a 3D site, but because it sucked up so much bandwidth and storage space (double the norm), it never took off.
"I think the thing you have to be is flexible and fast moving," Boyer said. "There's what's dominating the market right now and there's what might come out. You have to keep your finger on the pulse of technology."
