Playboy, Hustler, Vivid ... you know the names. You know the brands. Each has an identifiable presence on the Web, not to mention various other endeavors establishing their respective companies as household namesBut what about the rapidly growing adult mobile market? One would expect these companies to be leveraging their brands and pushing the envelope through mobile adult content.
Well, they are—but they're doing it through different avenues than they use to market their videos, websites, and other commodities. Tradionally, those have all been largely marketed to porn-loving U.S. consumer first and with the most muscle.
Studies, which seem to be all the rage in the mobile industry, bandy about large dollar amounts, such as a recent report by Informa Telecoms and Media that concluded the global market for mobile entertainment will be $42.8 billion by 2010. Of that, the same study concluded, adult content will generate $2.3 billion. Similarly, Juniper Research estimates the mobile adult market will triple by 2009 to a total worth of $2.1 billion worldwide.
This sector is widely tipped to lead the mobile entertainment revolution, exploiting its huge success in the fixed Internet world, Juniper says.
That's great, but what about right now?
As you would expect, the leaders in the adult realm have found a way to make money with mobile content even while the mobile industry itself is still in its infancy. With the conservative U.S. climate and carriers like Verizon and Cingular slow to take on any adult content, they've had to go to Europe to do it.
Mobile Porn Invades Europe
Hey, the Europeans love porn too. Who knew?
Well, the Europeans knew and handful of American companies had an inkling too.
Playboy announced its presence in Europe in December 2001, signing a deal with Finnish company Wireless Entertainment Service (WES) and making plans for its content to hit Belgium in the first quarter of 2002.
Playboy has always been a leader in the adult industry, and they were no different in the mobile marketplace. At the time the announcement was made, only black and white images were available because most handsets didn't have color screens.
Over the next few years, Playboy followed the WES deal with several more, hitting markets in the U.K., Germany, Italy, France, Spain, Portugal, the Netherlands, and so on. Effectively, Playboy rolled out its mobile offerings country-by-country and splintered its deals among different solution providers that agreed to deliver Playboy content to the masses.
When the WES deal was announced in 2001, word from the Bunny was that the U.K. and U.S. were the next targets for its mobile content. However, despite an announced deal with Ann Arbor, Michigan-based Legend Mobile in 2002, Playboy wouldn't fully gain a foothold in the U.S. until this year.
Meanwhile, they were seeing greater-than-expected revenues from their mobile offerings in Europe.
At the time of their announced launch into the Spain and Portugal markets in October 2004, then-president of Playboy Online Randy Nicolau said, "We are thrilled with the success of our wireless service in France, and the results we have seen give us the confidence to roll out this service to Spain and Portugal. We believe there is a huge opportunity in the wireless arena and we will continue to focus our efforts on international expansion."
And so they did. Playboy now has a mobile presence in 17 countries around the world, having branched beyond Europe with offerings in places as diverse as Hong Kong, Australia, and Brazil.
Hustler, meanwhile, hit Europe in March 2004, through a partnership with Santa Monica, California-based Giant Mobile. The companies had been developing Hustler-branded mobile content since June of 2003. Unlike Playboy, Hustler routes all of its mobile offerings through one company—Giant.
Like Playboy, Hustler had similar success in Europe. The company announced plans to enter the U.S. market in March 2005, largely based on the success of its European offerings.
"I didn't anticipate it being as big of a revenue stream as it has become, and we know it's only going to get bigger," then-LFP licensing director Chris Camacho said at the time.
Since Hustler first began its mobile development, there has been a drastic change in the perception of the market as well.
"When we started in 2003, mobile content was something new and novel and wasn't really that widely distributed. People weren't clamoring to launch something on a mobile phone. Now it's everywhere you look," says Michael Klein, president of LFP Broadcasting and LFP Internet Group. "We've had information from different providers that once they launched with Hustler content, they had usage increases from 300 to 400 percent. Every day I'm getting approached by someone new asking how to get Hustler content for their mobile service, which is quite a difference from 2003 when there were just a couple people who were interested."
Video production powerhouse Vivid has a mobile presence in more than 20 countries. They too use one solution provider—Sherman Oaks, California's Waat Media, which also develops the mobile offerings of adult powerhouses Digital Playground, Evil Angel, Playgirl and the Spearmint Rhino Gentlemen's Clubs.
Vivid's mobile content has been live and operational for three years in Europe, which is by far its most successful market, according to Adi McAbian, the managing director of Waat Media. Breaking it down by country, Waat has been the most successful with adult content in the U.K., followed by Germany and Italy. McAbian says that these successes largely are due to the maturity and size of those markets.
While Vivid has been seeing mobile revenues add to its already vast empire, they've seen the numbers increase dramatically since age-verification tools have been introduced. The U.K., Spain, Austria, and the Netherlands all have various methods of age verification to protect children, allowing companies like Vivid – which prior to age verification offered primarily glamour and artfully unexposed topless and nude shots – to offer more.
As any pornographer can tell you, hardcore content sells.
"We've noticed an increase in usage and customer retention with the introduction of the harder content," McAbian says. "In some markets it has been substantial. In some areas, we've seen an increase of several hundred percent."
For the industry leaders, age verification has become a key component of any mobile offerings. Until it came into play there was no question about hardcore content. Playboy and Hustler, like Vivid, essentially offered PG mobile content more to establish their brands than anything else, through downloadables like wallpapers, screen savers, ring tones, video clips and games. Playboy doesn't deal with in hardcore content, but Hustler does, and age verification has altered the mobile landscape for them just as it has for Vivid.
"We're exploring [hardcore offerings], but we won't do anything until we can ensure there is safety and you can verify whoever is using is over 18," LFP's Klein says. "We clearly don't want stuff being broadcast to someone under 18. In each market, once we know those precautions are in place, we'll explore more explicit content."
The Informa report stresses the importance of that responsibility, and unlike the Internet where the early days produced plenty of cowboys and quick-buck artists, its authors believe the status of the mobile industry will only allow for legitimate businesses.
"The key to turning erotic mobile content into a sustainable revenue stream is to adopt a responsible approach, making sure subscribers who wish to view such content are age verified and that those providers who are looking to make a quick buck are squeezed out of the equation," says senior research analyst and author Daniel Winterbottom.
In the infant stages of the mobile industry, the content and money appears to be more about brands and sex appeal anyway.
For Vivid, their branded games have been a big hit in Europe.
"We've had some games ranked in the top 10 downloads [with various carriers] and a couple ranked number one for a period of time. Video is increasingly becoming more and more relevant, so it's representing more and more of the revenue. As more customers get better phones and a better experience on the handset, we're definitely seeing the numbers skyrocket," McAbian says.
As such, Waat recently launched four 24/7 mobile TV channels for Vivid and three other brands in three European markets. They're not breaking the bank, but early returns are promising, and Waat has plans to enter the TV channels into five more markets by year's end.
As for Hustler, Klein says, "All [of our offerings have] been working – just being able to have a screensaver of the Hustler name, to the clips, to things like branded games. Clips and images, obviously, being able to download a Hustler centerfold is a very attractive thing."
Cutting out the middle man
Certainly not everyone has the resources like Playboy, Hustler, and Vivid. However, there are other companies making a splash in the mobile market and they're doing it without some of the typical partners.
Falcon Foto has an extensive content library—one in which they saw a great opportunity in leveraging using Europe's mobile infrastructure. What they didn't want to do was turn it over to a mobile solution or delivery provider, which takes a cut of the content provider's profits. So Falcon Foto went directly to the wireless carriers, which they found to be receptive.
"[In the typical mobile business model] by the time you get your money, you realize you're five guys deep. So we went direct to the carriers and struck deals, so our revenue split was with them," says Jason Tucker, president of Falcon Foto. "The only caveat was we prep our own stuff, but the return is much higher. Instead of making 5 cents on the dollar we're making 50 cents on the dollar."
At the time of this writing, Falcon Foto had prepped its images and video for mobile dissemination and Tucker expected their first offerings to be available in Europe in September.
In the states things are a bit backwards, with mobile solution providers essentially going around the carriers to sell mobile porn.
Take for instance OhMobile, which packages and delivers webmaster content to mobile phones without using carrier billing. Users pay for the mobile content from models like Sunny Leone, Aimee Sweet, and Martina Warren just like they would for Web content – with their credit cards, which offers the current standard of built-in age verification.
Xobile offers a similar service. As part of the AEBN VoD empire, Xobile's mobile content offerings consist of hundreds of adult movies licensed directly from the studios.
"However you can bill for content, do it," McAbian says. "Don't limit people on the billing options. There's an ease-of-use barrier. Carrier billing has always been a lot more seamless and convenient. It has higher conversion rates. That's not to say credit card billing, for example, hasn't worked. It has, but carrier billing, from our experience, has far outperformed alternate forms of billing."
The point is, there are other options available that allow the nongiants of the industry to take a little slice of the pie for themselves. However, most of the industry still believes they have to wait for the carriers to step up to the plate.
"Nobody knows any better. Certain companies are looking at wireless very seriously as a revenue stream. Other companies are looking at it as an additional revenue stream, and some companies are just rolling the dice," Tucker says.
Speaking of backwards…
Although the United States dominates the world in porn production and consumption, the mobile industry hasn't quite fallen in line. It seems the U.S. also dominates the world in the number of conservative nitwits with agendas. As such, the carriers have been wary of adult content offerings while the Europeans are whacking off in the bathroom stalls at work.
It's left most of the adult industry players in a holding pattern while T-Mobile, Verizon, and the rest figure out just how they want to dive into the adult realm.
"It's just like anything in mobile technology. Europe has been slightly ahead of the U.S. both in the infrastructure deployment in terms of customer adoption and in dealing with content. They're just a more mature market than the U.S.," McAbian says.
Vivid had U.S. offerings two years ago, but had nothing on the market as of press time. Hustler expects to go live later this year, and Playboy has a deal with Seattle-based Dwango Wireless. Their content is ready, but the company is waiting for rating and age-verification systems to be put into place.
Fortunately, sources say, those systems are close to being completed and may even be in place by the time this magazine hits the streets.
The CTIA, an organization that represents the wireless telecommunications industry in a dialogue with the Federal Communications Commission, was nearly finished with the rating system as of this writing. The age verification system was also set to follow closely behind.
"There has been a lot of proactive movement," says Rick Hennessey, CEO of Dwango Wireless and a member of the CTIA leadership council.
Essentially, the U.S. is a mirror image of what's already happened overseas.
"It's like what we've experienced in Europe. People have to embrace the technology, embrace the reality of the market, and figure out the best way to address it in any given territory. The UK implemented the UK code of practice where all the operators came together and figured out how to address adult from an industry level. Then each operator went back and said this is what's good for me from a brand perspective. We're not witnessing something very different here than we witnessed in the UK two or two-and-half years ago," McAbian says.
Clearly, the motivation for adult mobile content in the U.S. is here, what with a potential billion-dollar marketplace and a hearty stake of it bearing the name Cingular.
"You walk through Europe, [and] you see ads on walls for adult content on your mobile phone. You don't see that here," Klein says. "It's a more cautious market, but people recognize there is a desire, it is a huge revenue source, and can be done correctly and safely. It will break through."
The right partners, the right name
When adult content breaks through, it's likely that these adult players will be largely responsible.
Playboy, Hustler, and Vivid have positioned themselves to have their interests well represented to the wireless industry. Playboy has done it through Dwango and Hennessey.
Vivid has put its fortunes in the hands of Waat, who has six years of experience in the mobile marketplace, an influential presence, and a track record that shows they know what works and what doesn't.
"As a company we've never sat back. We have been kicking down doors, but we kick them in a responsible fashion," McAbian says. "We've basically written the content ratings matrix that's been adopted by a lot of operators in Europe for classifying content. We've set up systems of checks and balances that allow operators to work with us.
"The reality is, a lot of things happen behind the scenes, rather than one day somebody says it's OK, now let's go at it. We tend to be on the other side of that conversation," he continues.
The name recognition certainly doesn't hurt either.
"People are looking for brands," Klein says. "There aren't a lot of very strong brands in the adult marketplace, and we think Hustler is one of the strongest, if not the strongest. Obviously it gives us an edge and gives us the ability to get in and get on more services because of that."
The mechanisms are in place and the future is apparently finally here for mobile smut. Porn lovers can expect to see offerings from Playboy, Vivid, and Hustler shortly after age-verification systems are introduced.
If European market revenues are any indication, the results should be golden.
"I think we're going to have a huge reception," Dwango's Hennessey says. "Playboy has strong sales in all the other countries they've launched in and I think the strongest country for their brand is the U.S."
The same can probably be said for the other brands. After all, we're a nation of consumers … consumers who love porn.
