It’s one of those buzzwords you can’t really put a finger on. Convergence— what the hell does it mean? Is it the future? If so, how will the converging actually play out?
In basic terms, convergence means “the act of converging and especially moving toward union or uniformity,” according to Webster’s. In adult industry terms, it’s a grandiose vision where beautiful, naked women dance hand-in-hand on a sunny hillside with gnomes and elves while photographers and videographers gleefully shoot them for the Web, for video, for mobile, and for print. It’s one big happy world where everyone realizes the value of the myriad distribution models, uses them effectively, and we all roll around giggling in a big pile of cash. It's online and offline coming together in peace and harmony.
In some sectors, that convergence has already started to happen. It goes by another name though: diversification. It also has another meaning: cashing in on different revenue streams with a singular piece of content.
“If you shoot good content, there are many ways to monetize it,” says Jonathan Silverstein, owner of TheContentStore.com, which licenses studio-shot content to webmasters. “You have magazines, video, pay sites, VoD, phones, and cable television. That’s a lot of ways to make a lot of dollars off one scene.”
This type of convergence, or diversification, is nothing new. It’s only now going through new avenues because of the ever-increasing competition in the adult industry.
“Everyone is looking for more revenue streams. When doing that, why not look at the product you’re already creating and find a way to make more money with it?” asks Eric Matis, marketing director for Adult.com. “This is not a new concept. For years, video and image producers have taken the content they produced and sold it to webmasters.”
The difference today is that more people are seeing where the money is—online companies are moving into the DVD market, studios are effectively marketing websites, and everyone is moving into the mobile market, which brings us all closer to that vision of naked women frolicking on a hillside.
Reconstituted porn
Several online powers have successfully made the transition into the DVD market—Adult.com distributes its own titles through CinemaPlay Entertainment, TopBucks has Pink Visual, Naughty America struck a deal with Pure Play Media, MeatCash did the same with JM Productions, and sites like NaughtyAllie.com and FTVGirls.com distribute discs through online distributor DVDSuperstar.com, just to name a few.
While these companies have essentially found additional revenue by repackaging their content for another medium, they’ve also found that the DVD market is a whole different ballgame, and one in which they haven’t been welcomed with open arms.
Despite success on the Web with sites like EuroBrideTryouts.com and TeenHitchhikers.com, Matis says Adult.com’s early 2004 entry into the DVD market was met with resistance and ignorance by some of the established players on that side of the aisle. Luckily, the company was able to bring in video industry veteran David Stidham to run CinemaPlay Entertainment and break down some of the barriers.
“He was able to get us an audience by reputation alone, where those same guys wouldn’t have given us the time of day if it weren’t for the relationship that David had with them,” Matis says.
TopBucks’ spin-off, Pink Visual, also entered the DVD marketplace in 2004 with titles like MILF Seeker and Her First Lesbian Sex. Two years later, the Tucson-based company is thriving, having opened a second office in Los Angeles in 2005 and effectively used their DVDs and websites to cross-promote.
The company’s biggest hurdle? Carving out shelf space that used to belong to video producers.
“Our biggest obstacle has been gaining market share. The adult film industry has been around for quite a while. Trying to get our repurposed titles put on shelves alongside established companies such as Vivid, Hustler, and Metro was not easy,” says Lea Buscyk, director of marketing for Cyberheat, the parent company of TopBucks and Pink Visual.
For a company like MeatCash, which has also reversed the Web-to-DVD model by building and marketing websites for adult directors, cashing in on the video market is simply an exercise in collecting checks. Arthur Chang, one of MeatCash’s three partners, says his company got lucky partnering with JM, a company known by porn aficionados for its extremely raunchy releases.
“They do all the work, we just provide the content. It’s like taking a cow and splitting all the parts—the tail will make a good belt, use the hooves for soap, and we, of course, take off the good parts for the fillet.”
Of course they do, but even if a Web producer can get distribution and get on the shelves, some find that the content doesn’t always translate.
“We have some titles that do amazing on the Web and only so-so in the DVD market,” says Matis. “It’s a very different game. In those cases, we move forward with the titles that sell well, just like we do online. There are times when you’ll produce a site that does well and other sites will do poorly. Online, you can tweak your product and make little changes here and there to create a product that sells. With DVDs you can’t go back and make those changes.”
There are, of course, other areas of diversification for that singular piece of content besides DVD—mobile, iPod, PlayStation Portable. If it’s the girl or the guy that’s the center of it all, add webcams and blogs to that list. There’s certainly no shortage of porn or ways to peddle it.
It’s something even the talent is realizing. While porn stars have long had websites, some girls who started on the Web are crossing over into the video market.
Sunny Leone started out in the pages of Penthouse, built a strong online following, and in 2005 made her debut as a Vivid Girl with Sunny. Similarly, Kinzie Kenner started her adult career as a Lightspeed Girl and later moved on to her own site, KlubKinzie.com. More recently, she’s made dozens of movies for Shane’s World, Hustler, and Anabolic, to name a few.
“I’ve been able to balance the two very well,” Kenner says. “At home in Arizona I work on my website, and when I go to L.A. I switch to videos. It’s so nice to be able to have that kind of luxury.”
It’s happening everywhere.
“Diversification is what’s happening,” says Jason Edwards, president of OhMobile, the mobile carrier for TopBucks. “Take Vanilla DeVille’s site, for instance. You can go on the Web and watch her. You can go to a cam site and watch her. You have access to a mobile site, and you’ll be able to download her videos to your iPod. If she shoots something for Playboy TV, you’ll see her on TV. One product can be distributed so many different ways.”
Net threat
As one would expect, video production studios are finally starting to realize the moneymaking power of the Web, and they’re gaining a foothold through various means, though, it hasn’t been without reluctance.
“A lot of the video people believed the Internet was going to take a lot of their market share,” Silverstein says. “They had to hold their content close to the vest. They were afraid if they allowed it to go on the Internet, they would lose their business.”
In most instances, that’s no longer the case. The question now isn’t so much how to hold onto your content, but how to surround yourself with the right people in order to effectively disseminate that content on the Web. After all, video guys know as much about building and marketing a website as Web guys know about duplicating and distributing DVDs.
“It’s easier to shoot the content than it is to know what to do with it on the Web,” Chang says. “If the video side wants their websites to receive any traffic, they need to consult Web people, period.”
MeatCash parent company MNP Enterprises has successfully courted the video industry, repackaging content and releasing websites and affiliate programs for Porn Valley directors like Stoney Curtis, Mike John, Erik Everhard, and Vince Vouyer. “It’s all gravy to them because they’re making all their money on DVDs,” Chang says.
In all, MNP released more than 30 sites in 2005 without shooting any content.
Although not as prolific in number of releases, affiliate program Braincash and video producers DVSX have formed a similar partnership. DVSX hands over content, Braincash turns it into a site and markets it, and they split the profits down the middle. The partnership has resulted in sites like OnlyDP.com and IloveItBlack.com, along with some unexpected revenue for DVSX.
Co-owner and head of production Alex Ladd says he found it bizarre when he started to receive checks from Braincash a month after launching their first site.
“It’s just another way you have to do things these days. It’s such an oversaturated industry that money is really tough to make unless you figure out new and creative ways. The Internet, Video-on-Demand and all these other crazy ideas—it seems like that is the only way to make money,” Ladd says.
Online Video-on-Demand (VoD), although it may be a crazy idea, has been the initiator in bringing many studios to the Web. Companies like AEBN and HotMovies.com aggressively solicit studios for their titles, which they stream over their websites on a pay-per-minute basis to the porn-hungry consumer. The revenue is split.
“These guys are making millions of dollars on DVDs, and they can’t make $8 on the Web because they just don’t understand it. They can’t believe anyone’s actually making any money … until they start doing deals with companies like AEBN and start seeing checks come in,” Silverstein says.
And then the light goes on.
Partnerships may have paved the road for the video world to enter the online realm, but an increasing number of studios are starting to bring Web production and marketing in house as well. Vivid, Hustler, New Sensations, Channel 1 Releasing, Club Jenna, Private, Evil Angel, Shane’s World … the list goes on.
The difference between a studio’s Web presence and an established affiliate program and its built-in traffic are still quite different though.
“Vivid, Wicked, Hustler—these are not huge online markets yet,” Matis says. “They may be to their consumers, but to the webmaster community, they are not there yet. In some cases, they are limiting themselves with what they will show online. They are playing by different rules. So these companies can go online and see gains, but they are still doing things to limit themselves.”
Ladd agrees. DVSX started to build its own sites but scrapped the idea just before they were released in order to make the Braincash deal.
“The development of the site itself isn’t that difficult, but the contacts, the affiliates, and sales are. You really have to know your stuff,” Ladd says.
Virtual profit
Still, a lot of video companies are more than happy with their online revenues.
Vivid’s CEO Steven Hirsch says his company’s affiliate program, VividCash, has increased revenues month to month for the past two years. Shane’s World’s Megan Stokes, the director of the company’s Internet division, says online makes up about one-third of their overall revenue. Shane’s World does things a bit differently than most, though—rather than repackaging DVD content, the company shoots content exclusive to their websites, like most purely online operations do.
“We have a smaller catalog of content, but that forced us to really look at the abilities of our sites and see that shooting exclusive content specifically for our sites was of great benefit,” Stokes says. “Not only did we get to discover which girls would be a great fit for a movie, but we also got to see their performance beforehand by trying them out and gauging customer reaction.”
Although Shane’s World has managed to find crossover appeal, the bottom line for most studios or three-tiered content producers like Hustler, Score, and Swank, which also distribute their branded smut in print, is that the online consumer is a different consumer.
“People who buy in stores do not buy on the Web and vice versa,” says Swank Dollars affiliate manager Allen Y. “Being online you get both markets, and you use that to your advantage. Swank being so branded in print makes it so much easier to brand on Web.”
With video flesh purveyors just starting to find their way on the Web, it’s certainly not out of the realm of possibility that there may come a day when they dominate it. The naysayers opine that video content doesn’t translate well to the digital medium, but the early crossovers would suggest otherwise.
“In the future, the biggest competition is going to be the Wickeds and Vivids of the world,” photographer Charlie Markham told a group of webmasters at the Webmaster Access Europe show this past year. “They have extremely deep pockets. The quality will improve, and the content costs them zero.”
Money talks, bullshit walks
It’s seems that finding money for porn, if said porn is well-produced, is as easy as looking around. And money is ultimately the impetus for what will be industry convergence.
How it’s going to shake out remains to be seen. Two things are for sure though.
One, the walls between the factions of the industry are coming down and convergence is starting, as some of the cross-platform partnerships will attest.
And two, it’s not going to happen overnight.
Some of the recent mergers and acquisitions in the online industry – FriendFinder and Streamray, Playboy and Adult.com – and the resulting strength of those companies seem to point toward a similar phenomenon reaching across the aisle.
“I think in the end it will be a tricky balance,” Matis says. “You will see more mergers of large online brands with large video brands, making the result more powerful in both markets.”
And then, when everyone is dancing on the hillside together, the government will roll up in their big, black SUVs and start busting people for antitrust violations rather than obscenity. Oh, what a glorious day it will be!
