Future Shock
Fred Lane:
The best business model is the one that meets, for each individual business owner, the following criteria: a reasonable income, acceptable time commitment, opportunities for growth, and job satisfaction.
Dick Hunter:
I've never been very good at managing people, so remaining a one-man operation has worked well for me. I've got a lot of ideas and there's a ton of projects that I could do, so I try to focus my efforts on things that will require the least amount of maintenance and offer the most long-term recurring income.
Amelia G.:
Follow your passions. Create sites you believe in, and the money will follow. For some people success can be achieved with free sites; for some, pay, and for some, a combo. We are all unique.
Colin Rowntree:
The free sites feed your pay sites with traffic, plus they're great ways to leverage traffic deals and scare up a little extra money from exit traffic. The pay site is the flagship though, as far as revenue potential is concerned.
Legendary Lars:
A free site can never make the kind of money an affiliate-based company can, simply due to the limited time and resources a webmaster or single company can commit. A thousand-plus people powering an affiliate program can accomplish much more than a few people running a free site can.
Marc Womack:
The challenge is that you've got to do both right, and both are very different business models.
Legendary Lars:
I think billing is one of the biggest challenges facing adult, but I don't see anything really taking out Visa or MasterCard at this point. As long as adult manages its risk, there will still be banks willing to process for the industry. I also think a lot of lessons can be learned from the several third-party companies that have failed and left webmasters holding the bag for millions of dollars.
Allen Ingram:
There is too much money in adult for banks to turn a complete blind eye to adult. The same goes for large phone companies. Alternative processors will come and go. Banks will always be there to process our money.
Colin Rowntree:
Although the marriage of the adult and credit card industries has been a rocky one, it's not over till it's over, and knock on wood, things appear to be relatively stable for the time being. That is a good thing, as the day this marriage dissolves is the day when 70 percent of the revenue disappears!
Joe Sterner:
I see an increase in billing solutions and prepaid systems coming into play, though. As the credit card companies tighten their policies and standards, we'll have a stronger demand than what we have today.
Chandie Foster:
I also believe that we will see more and more migration to offshore banking and alternative billing options. With current Visa and MasterCard regulations, I would make the assumption that things will get worse and not better, so best to be prepared.
Colin Rowntree:
But Americans and Canadians like to use their credit cards. European credit card penetration is on the increase. All of the alternative payment systems in the world can't touch the amount of revenue that credit card billing yields. I'm sure the steady stream of "alternative billing" methods will continue to be rolled out, but I have my doubts that there is any "magic bullet" coming in the near future.
Chandie Foster:
Obviously, credit cards are still king. I don't expect that to change in the near future. The climate has evolved and companies have, for the most part, done a great job of maintaining the required thresholds. The recent failure of major billing companies does not bode well for the future, but the companies that continue to remain available to us for credit card processing are well-managed corporations that have a vested interest in helping us continue to work alongside Visa and MasterCard for many years to come.
Larry Walters:
The credit card companies will only stay in the adult space as long as they feel comfortable that the benefits outweigh the liabilities. Should the political or legal climate get too hot, they'll drop the industry like a hot potato. Contrary to popular opinion, the merchant banks can easily survive without the adult industry, so we are essentially at their mercy.
Dave Levine:
The idea that adult transactions are risky is wrong. It was correct back in the late '90s as many young entrepreneurs were jumping into the business and charging cards without proper controls, customer service, or refund policies. Now the only companies that survive are run well and have extremely low chargebacks. The idea that adult companies are inherently riskier is not only wrong, but if someone did a study, they would probably find adult companies to be a lower risk than most mainstream companies.
Joe Holm:
Credit cards are without a doubt the single most important payment option at the moment, but ACH is also a great way of accepting payments. In Europe, direct debit has proven to be a great way of collecting membership fees, with the only downside being that it is only available in a few countries.
Oystein Wright:
Without doubt you have to be able to spread your wings over multiple payment platforms to achieve the best result: to use credit cards as your primary source in a cascading billing solution, check processing for your U.S. customers as an option to credit cards, SMS billing for EU and Asia, telephone billing, and a type of invoicing system for those who don't want to use anything else.
Holly Moss:
The best way to process is to maximize your website revenues with all the most effective and sound billing options available, period! By not doing so—you are just leaving potential revenue on the table.
Amelia G.:
If someone wants to tape Japanese yen to a postcard, I'll accept it!
Colin Rowntree:
You know what? The strongest companies at present mostly seem to be in Amsterdam. Why? Friendly payment systems and liberal governments and societies allow them to actually focus on growing their business rather than chase merchant accounts and shovel 2257 documentation. It probably also has something to do with them being Dutch. Ya know? The guys that invented modern banking? International trade? Colonized a lot of little countries?
Joe Holm:
Speaking of that, geo-targeting is really making a difference for us. Our tour sites are translated into all major languages and use IP geo-targeting to redirect surfers to their countr[ies] and language-specific tour versions offering all payment options available for that country.
Kathleen Morford:
It's much more user-friendly when you're approached by local ads in your own language. Site and ad customization through geo- and language-targeting has completely revolutionized the way we, as marketers, cater to customers. That one-size-fits-all approach falls flat on today's audience.
Rainey Stricklin:
It's still true, though, that the key is to consistently get your company out there repeatedly, in as many ways as possible, to both webmasters and consumers. I believe in taking advantage of everything I can, including online advertising, print adve-rtising, trade show sponsorship, article writing, blog writing, board posting, etc. Obviously with a bigger budget you can do more advertising, but even on a small budget there are ample opportunities available to promote your company.
Asher Hardt:
Not only is it important to get your company name out there, but it's also important to let people know who you are and what you are about. Make friends and make relationships with people, even if they aren't going to buy your content. In my personal opinion, relationships and connections are the most important things in not only this business, but in all businesses.
Chandie Foster:
You're right: Success can come easy if you leverage the relationships you've built. I make an effort to seek out information and maintain contact with everyone I meet. The market is constantly changing, and new businesses and trends form overnight. The guy with a small TGP that I met on Thursday might explode his business and form a secondary business a month later. Stay current, stay informed, and most importantly, stay in touch.
Sam Sugar:
People want to make connections to individuals they like and trust. Jenna's big because the public thinks they know her. Danni's big for the same reason. Forget pushing how many photographs you have and talk to the people who visit you like friends. It's why blogs are popular, and it works.
Mike Hawk:
Be different and try new things is the only way, in my view, to make it in this market. Be good to the people that make you money: Don't steal from them, and tell the truth. It's just amazing how well that works.
Holly Moss:
I have witnessed many changes in this industry over the last eight years and I've seen many people come and go, but [in my experience], if you run an honest business, work very hard, and deliver what you say, then there is enough business for everyone to succeed no matter how crowded it gets.
Andy Alvarez:
"Hard work" may be two words nobody wants to hear, but that's it. You want to be advertised on every website, magazine, and forum sig. All of which are fairly easy to accomplish, but as a whole add up to a long-term project that never ends. If you're not in the game for the long haul, you haven't got a chance.
Derek Meklir:
The best way to market an adult site is to try everything and test and see what does well. You need to try SEO, CPA purchasing, CPM purchasing, PPC buying, search engine PPC traffic, affiliate programs, offline ads, and anything else that is out there and just test it all and see conversions. If one doesn't work, stop doing it; if another does work, keep it up. You won't know if it works unless you try.
Todd Spaits:
It is all about niche ownership and branding, I think. First, you need to understand your niche. Since this is the entertainment business, if you don't enjoy or at least understand why someone would enjoy the content you produce, you will not make it. Second, be true to the niche you are producing. Whether it's foot fetish, masturbation, or bondage, there are more than enough people who enjoy your brand of sex to make anyone a millionaire many times over.
Colin Rowntree:
Right: Niche, niche, niche! Gone are the days of being able to start up an adult super-site that offers generalized content. Today's consumers are savvy and know exactly what they are willing to pay for. Find one or more specific types of content to create and market, and stick with it. The members will love you for it and stay around longer.
Fred Valiquette:
Don't forget branding, branding, branding. You need to create a brand that everyone will recognize. You need to get your products into the customer's mind and make sure they remain there.
Linda Tran:
Beyond the typical online avenues, I think members are very drawn to personality and interaction. My cam shows are a favorite among members, and I always make appearances in different cities throughout the year to meet all my fans. Once you have that connection face-to-face with someone, they remember you forever! It's like their biggest fantasy come true when they're able to chat with you for even a few minutes.
John Desjardins:
I think there will always be a market for single-girl sites, since they have so much personal interaction and they have a very loyal fan base. The retention on a site that is actually run by or with the model can be amazing. In my opinion, a model site is the original reality site, because you get to know so many details about her life.
Tera Lord Masters:
Single-girl sites are taking off. Everybody wants one, and everybody is after that girl who will make them millions. I feel that people are venturing into different areas now, not just offering plain porn sites. You want everything a webmaster can promote under one roof these days.
Fred Valiquette:
I see the future going to amateurs. People are getting more and more open-minded. Porn is getting mainstream, so I expect a lot of people [are] ready to experience their sexual life on the Web.
Kathleen Morford:
There are plenty of middle America, Wal-Mart-shopper types who are secretly ready to explore the adult world.
Harlan Yaffe:
Just like in the mainstream, things come and go, hemlines rise and fall, low fat gets replaced by low carb, and then it starts all over again. It all stems from the available content and what can be done with it.
Kathleen Morford:
I think U.S. reality sites are a little tired. Anything that involves a bus makes me yawn. The only exception to this is Japanese reality porn.
Legendary Lars:
Single-model sites are popping up all over, but they are limited in their ability to grow due to the focus on a single model. The appeal is not there for the masses. webcam companies and dating sites are rocking right now and are in their prime.
Joe Holm:
Adult Internet surfers seem to have a much bigger need for personal attention than anticipated, and retention numbers confirm that.
Larry Walters:
The adult Internet industry will become more and more interactive. The lines between entertainment and relationships will become blurred. Porn stars will need to spend time getting to know their fans online, and virtual romances will be the name of the game. We're seeing the beginning of this with the convergence of adult sites and online dating sites. At the same time, everyone is fascinated with fame, and everyone wants to be a star. Anyone with a webcam and a microphone can be an entertainer now, and it all comes down to grabbing some attention. These factors will impact the look of the adult market in years to come.
Joe Holm:
At the end of the day, exclusive, high-quality content is always king. Everyone can set up an affiliate program, buy tons of traffic, or have all the billing options in the world, but it's the content you offer that makes a surfer pull out his credit card and join your site. Everything else is much needed, but is still nothing more than tools and tricks to attract more sales.
Future Shock
Amelia G.:
Responsible behavior from within the adult industry can help ensure that the shape of the discussion regarding social mores and such stays productive and positive. If those within the industry misbehave, they simply justify the political, social, and legal pressures aligned against the industry. We can limit ourselves to types of marketing which don't make the average American want the industry stamped out. If we believe what we are doing is righteous, we've got a much better shot at convincing the average American that it is a perfectly acceptable profession and form of entertainment.
Harlan Yaffe:
The average American has a view of the adult industry that is a little too Boogie Nights. I think the mainstreaming of the adult industry as an industry, not a living Kama Sutra – like the E! Hollywood Story on Jenna showing her as a person and a brilliant businesswoman – is more of what we need. Family Business (about Adam Glasser, aka Seymour Butts), showing a mother, son, and uncle working together and selling the same widgets we do in an environment that many people can relate to both in the office and out, carries forth the message magnificently!
Eric J. White:
Our industry is a business, like anything else. We need representation. We need to put a face on the industry. Recently, during a high-visibility prosecution of an adult company this became quite evident. I think the people were trying to help themselves, but every time they got in front of the camera, they dug their hole a little deeper. It got to the point where I cringed every time I saw them on TV. If they would have been able to refer the questions to a press spokesperson or industry trade representative skilled in these things, the media would have never been able to cut together the pieces that were so damning. Fortunately for them, they had a brilliant attorney who has done well for them.
Derek Meklir:
The current government and its policies are the biggest threat to the industry. The American people were looking for moral and religious leadership, and in doing so have brought the most conservative group of anti-free-speech/anti-freedom zealots into office. Just because we have shown adult to be legal in the courts doesn't mean that the current government can't try to turn that around.
Lengendary Lars:
The installation of so many new federal judges by the current administration will prove burdensome for a great while to come.
John Desjardins:
Yes, but the pendulum can only swing so far to the right before it has to come back to the left. I can't imagine the restrictiveness of the current political climate lasting much more than a few more years. People can only take so much of either political climate before they feel the need to change it.
Eric J. White:
The current administration's worst enemy is itself. We've just got to stay on the bull until it gets tired.
Tom Barrington:
The government has learned how to dance around First Amendment issues after suffering several defeats on COPA. Back-room deals and rewriting laws are only the beginning of a very creative and calculating campaign to regulate and hopefully diminish the presence of adult content outside the oversight of the courts and Congress.
Legendary Lars:
Billing and political pressure are the Achilles' heels of the industry. We need to be more advanced in our billing options, and the industry really still has not found its voice. We badly need a lobbying group.
Joe Holm:
Most importantly, we need a practicable and truly effective way to protect minors from accessing adult sites without locking potential customers out or making it unreasonably hard for them to access adult sites. This would also include a way of stopping X-rated spam once and for all, the main cause for negative public perception of our industry in my opinion.
Larry Walters:
Dot-xxx has the potential to be a good idea, if the industry adopts it as a preferred space for adult site location and as a viable means of raising money for collective industry efforts. It was inevitable that .xxx would become a reality in some form, and it is better that ICANN approved this as a sponsored TLD instead of a general TLD. At least with a sponsored TLD, the industry will get something back in the form of a well-funded trade group. There is also something to be said for taking this space away from the government and controlling it ourselves.
Fred Lane:
The idea of a .xxx TLD offers good short-term PR (to the extent that the idea is perceived to come from the online adult community as an aid to parents), but in the long run, will end up frustrating and irritating consumers, since not all adult companies will use the TLD. Moreover, its creation will give Congress the false impression that adult companies can be forced to use it, which is simply not true. It also offers the potential for isolating adult companies, thus making them a better target for prosecution.
Kathleen Morford:
It's just "dot-ridiculous." The only thing that will come from the .xxx availability is that domain sitters will try to buy up domains of well-known companies. I would love to keep kids safe, but this isn't effective. It's just going to force all adult companies to fork over more money to tie up domains before scammers buy them.
Amelia G.:
It is a silly idea. "Triple X" is supposed to mean something more specific than generally mature content. The adult industry does not want the .xxx suffix, and the religious right does not want it, either.
Sam Sugar:
It's a ghetto we're being asked to move into, at very high cost, in order to protect society from our evil influence. We're not evil, and the people who are won't voluntarily move in. Dot-xxx will punish the good guys.
Tera Lord Masters:
I don't think we will ever be forced to use .xxx, and I also don't think ISPs are going to be banning .xxx, but the option will be there for parents. I think .xxx is definitely adding a whole other layer to this industry. I have mixed feelings on this one that I still haven't completely sorted out within myself. Dot-xxx is not going to make porn go away on the Internet even if parents do block it, so unless we're forced to use it I have no idea how .xxx is supposed to help anybody.
Fred Lane:
Since Bush is a big fan of tax breaks, here's an idea: tax breaks for adult companies that voluntarily limit their operations to .xxx.
Mark Kernes:
Remember how, earlier this year, a bunch of state attorneys general got together and convinced Visa and MasterCard not to accept charges for cigarettes bought online? Do you think the federal government, operating through the U.S. Attorney General, could figure out an incentive or two for those companies to stop accepting charges for sexual material from any site that isn't in .xxx? In the online world, how many cries of "cyber-child-molester" would it take to convince, say, AOL or MSN or Yahoo to block all .xxx access?
Mike Hawk:
The .xxx people are claiming to everyone and ICANN that they are the … voice for our business and representing our views and opinions. I don't even know who is on that board, and they for sure do not represent anything that I am thinking. I am more worried about this than the 2257 deal. At least we get to see who we are dealing with here.
Mark Kernes:
The 2257 regs are one of several methods the government is using or soon will be using to harass the industry and try to drive it out of business. The recent rhetoric among Washington conservatives charging that adult video is being made by "sexual slaves" is another clue to the direction in which the pro-censorship minority is moving. They intend to do anything and everything they can to get around the First Amendment's unquestionable protection for sexually explicit material by nibbling away at whatever rights adult producers/webmasters have that aren't governed by free speech concerns. Congress just voted major tax breaks for any producer who makes a movie in America using American labor—unless that movie is XXX-rated. See the connection?
Fred Lane:
There's no question in my mind that when the newly formed Obscenity Task Force at the Justice Department starts its work, the new 2257 regs will be the first hammer taken out of the toolbox. The regulations are complicated, compliance is difficult, inspections are warrant-less, and violations carry stiff penalties. Although I support the goals of the law and the regulations (no one under 18 should be working in the adult industry), I am opposed to the adoption and implementation of a confusing law that can so easily be abused.
Larry Walters:
The regs will certainly be used as a tool to extract pleas to obscenity charges.
Dave Levine:
The government already has plenty of tools to prosecute. This may just help them win a little easier. It seems the government rarely wins its cases.
Mike Hawk:
2257 is something the government threw against the wall to see what would stick. In theory, it's not a bad idea, but there are things that put people in serious personal danger.
Electra:
The U.S. government, used as a willing tool of the Christian right, is the greatest challenge we have at the moment with the insane 2257 regulations, and also in the future (at the very least until the next major election.) The challenges are how to remain in business under those circumstances. How are companies to comply with rules that are created such that they can't really be complied with?
Allen Ingram:
I am always afraid of the religious right in the U.S. and its ties to those in power. No democracy should ever be a theocracy, which is what it has become in the U.S.
Oystein Wright:
The fact that child pornography exists makes our industry suffer as a whole. Thanks to ASACP I think we have a real chance to kick back and give ourselves a better image, as well as to do what is the most important, which is to combat child pornography at the root level.
Electra:
The latest 2257 regs were never created to protect children [or] to stifle child pornography. We know it and they know it. They're meant to shut down porn on the Web by creating such overly broad and onerous regulations that they either would be economically burdensome to comply with, or just totally impossible to comply with. What are people to do: Toss out tens of thousands of dollars of content in their possession that's been created in the last 10 years because the rules are retroactive? The government doesn't care about the privacy rights of the models, doesn't care about the overwhelming corporate economic burdens it creates, isn't doing it for the protection of children, and it doesn't even care that most of the regs cannot be followed. It's to eliminate porn on the Web and has no other purpose.
Eric J. White:
The bible thumpers who want to be on a jihad to destroy the industry and "save the children" from something natural like sex amaze me. For years, I had the same argument with mothers that were appalled their child might see a bare breast in an R-rated video, but thought nothing of letting their children watch Michael Myers cut off people's heads in Halloween. To me, that's obscene, not the natural act of sexual relations between consenting adults.
Asher Hardt:
How can they force all content providers to give away valuable information about our models, which in turn puts our models in serious danger? What does a webmaster need with the models' addresses and social security numbers? Not only is this revised regulation putting the models in danger, but it's also putting their loved ones in harm's way as well. So just because you have sex on film for a living, or even just take pictures, you have no right to privacy? It's putting a lot of innocent people in danger, and for what? To protect children? I'm not convinced, but hey, it's a very nice smokescreen.
Marc Womack:
Frankly the US government is shooting itself in the foot. They're leaving many people no option but to move their companies offshore. If the government is forcing me to set up all my operations offshore, I can guaran-damn-tee you that I won't be paying taxes on it! If you don't want me to do business in the U.S., fine, but you're not going to get tax revenue on what I do!
Tom Barrington:
This is the only business model I have ever been involved with where you can run an honest business and still have to look over your shoulder like you are running from a mafia hit man all the time. It's the only business where despite years of hard work, honest effort, and conformity to business and ethical law, you can be shut down in an instant because of some back-room processing deal or some cloakroom rewrite of existing law to make it nearly impossible to comply, all under the premise of "protecting children" when the apparent undertones in the motivation suggest a more "industry reducing" motive.
Fred Lane:
I am generally an optimistic person, which probably colors my analysis. Nonetheless, I do think that the political climate will get better. I believe that the American citizenry has an innate sense of balance and that the Republicans have overreached. I think that people are less likely to be distracted by less important issues (like the right's obsession with sex) given the ongoing fiasco in Iraq, the quietly deteriorating economy, the massive increase in our global debt levels (start brushing up on Chinese), and an environment that is either being drilled or burnt. A huge amount will depend on the upcoming midterm elections in 2006 and the next presidential election in 2008.
Jake Cruise:
What are democrats going to do? Rally around to support porn? No. They'll talk the talk, but they won't walk the walk. We're an easy target.
Kathleen Morford:
Everyone who votes will directly contribute to the future of the adult industry. We need to realize that our voices, lobbying, and financial contributions can move mountains.
Jake Cruise:
The only way the adult industry can shape the discussion is to join the mainstream. But we don't present ourselves as mainstream. The image the world sees is only the sexual side of the business; they don't see the business side of it. So, basically I think we need to put more business suits (male and female) in front of the media and fewer scantily clad women and men in muscle shirts. Why are the "actors" representing us? Where are the business leaders here? Where are the corporate giants who no one sees?
Punker Barbie:
I feel the right-wing factions and religious groups are deciding the societal morals at the moment. With Bush in office, things are only getting worse for our industry.
Dravyk:
If President Bush tomorrow decides to wear a red tie, I don't think red ties would fly off the shelf across the land. On the other hand, if Britney Spears started to wear a bra on her head, two weeks later that's all you would see. The fact is, if you look around, the public overall wants adult content. Co-eds buying T-shirts that say "Porn Star" in glitter, TV shows like Nip/Tuck and The L Word, the fact that Seymore Butts' Family Business is in season three, Jenna Jameson is on the New York Times bestseller list, Ron Jeremy pops up everywhere ... there's tons of examples that the public is open to porn. Only the Moral Minority is loud-voiced. Small in number, but loud, and they make headlines. Funny though … you don't see a host of TV shows about boring right-wing zealots do you?
Punker Barbie:
I think the greatest challenge facing the adult industry today is the adult industry itself. I don't understand why there has to be competition between sites. I mean, this is the only business in the world where you can link with your competition and make more money together.
Larry Walters:
The greatest single challenge is apathy. The adult industry, particularly the Internet component, has been historically reactive to issues and problems as opposed to proactive. The failure to create any viable adult Internet trade association is a prime example of this apathy. While the FSC has done an admirable job of reaching out to the adult Internet industry, it took the recent 2257 crisis for many webmasters to even consider shelling out a few bucks for the common good.
(Interviews were conducted by Kathee Brewer, Tripp Daniels, Ken Knox, MJ McMahon, and Charles Farrar. Collating, cutting, pasting and general magic weaving was done by Kathee Brewer.)
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