Wouldn’t it be nice if we could reverse time just a little bit and return to the early days of the adult Web, when money flowed like water, there was plenty of market share to go around, and surfers didn’t give a damn how crappy content was as long as the girls were naked, hot, and willing?
Yeah, right. Like that’s gonna happen.
The fact of the matter in the modern milieu is that, while times are not exactly desperate, the free-lunch days are over, folks. Quick, easy money is but a distant memory, and today’s adult businesses long ago realized that in order to stay in the game, they had to conduct themselves as just that: businesses. The pickin’s ain’t so easy anymore: Companies merge or evaporate entirely with an almost alarming frequency; they trim down their operations; they revamp; they scale back the grand shenanigans; and still only the strong survive.
Sure, some of the big players who started the whole cyberspace gold rush are still around. Companies like Wasteland.com, SilverCash, CyberErotica, Badpuppy, and SexToy.com continue to rake in the dough. Others, though, fell by the wayside for a variety of reasons too numerous to mention. Anybody remember BabeNet? iGallery? What about all the adult verification services? The survivors will tell you that, in part, they were lucky: They were in the right place at the right time with the right merchandise. More important than that, however, they had supportable business models, written business plans, ethics that are above reproach, and a dedication to providing top-notch customer and affiliate service. In many cases, that wasn’t the situation with the dearly departed. In fact, in the majority of the most infamous flame-outs, the companies and individuals involved were deficient in at least one—and sometimes in all—of the qualities required for success.
With maturity comes the knowledge—usually gleaned from painful experience—that in order to remain competitive, businesses of any stripe must be quick on their feet and willing to adapt. In fact, according to those who are busily engaged in remaining competitive on the adult Web, there are three core qualities those who aspire to longevity must cultivate: agility, perseverance, and foresight.
Agility
The law of the jungle is equally applicable to the adult Web: The slow and infirm are the ones who’ll be killed and eaten first. “The Net is fluid, and as a company doing business on the Net, you need to be able to be just as fluid and act just as quickly but not react out of panic,” says PrideBucks founder Harlan Yaffe. “As soon as you find a trend that seems to be working, it goes right out the window. You can’t ever rest on your laurels in this business, because as soon as you get something that works as well as it can, it stops working.”
That’s why PrideBucks spends an inordinate amount of time poring over statistics, listening to surfer and affiliate feedback, fine-tuning current programs, and developing what it predicts will be the next wave. PrideBucks adds new affiliate sales tools every month. It remodels its surfer and affiliate tours and news sections frequently, and adds new content weekly. It adjusts the number of clips available in and the explicitness of its site tours, often making seasonal changes that correspond with surfer and affiliate tendencies the company has discovered during the three and one-half years of its existence. Yaffe says PrideBucks “constantly brings out new things for both surfers and affiliates, because attention spans are short. Things change seasonally, even in a global market. Around holidays and in the summer, we’ve noticed that the space between a surfer’s original visit to our site and his sign-up may be several days, while in the winter they join the first time they visit. We track those things, and we adjust to them as quickly as we notice they’re happening. We have to.”
In the grand scheme of things, those are relatively minor adjustments. PrideBucks has made some big changes, too. Only recently did the company begin offering trial memberships, because it noticed that surfers view the Web very differently today than they did during PrideBucks’ youth. “It used to be that we’d show a surfer a great tour, and he couldn’t wait to sign up for a recurring monthly membership,” Yaffe says. “Now we have to really differentiate ourselves; sharpen our offerings as surfers get more exposed to everything else that’s out there. We’ve found that if we get them inside on a trial, they stick around because of the quality and quantity they find in the members’ areas. They think, ‘Whoa! I can’t possibly see all this in just a few days,’ and they stick around for a long, long time.”
Of course, Yaffe notes, trial memberships only increase conversions if the websites using them have developed a stream of quality traffic (“Lookie-Lous only soak up bandwidth,” he says) and “live up to every single promise they make—to surfers and affiliates.” That’s where Yaffe sees a certain amount of rigidness as beneficial. “The companies, sites, affiliate programs, and webmasters that are still around are still around because they’re dedicated to quality over the long haul,” he says. “The days of ‘If you build it, they will come’ are long gone. When we all started, it was possible to be a success as a mom-and-pop [operation], but there are no quick bucks anymore. The biggest mistake lots of new companies make is in developing a marketing plan with lots of flash but no substance. Nowadays, you’d better be able to deliver.
“This business really is no different than any other,” he continues. “Our widget happens to be an X-rated one, and selling that widget ain’t as easy as it used to be.”
Perseverance
Although an ability to change when necessary is a hallmark of all successful businesses, adult entrepreneurs also need to know when not to fix things that aren’t broken. For Mr. Skin Cash, change meant sticking to a model that has worked for seven years while still adding new elements. “MrSkinCash.com has always been focused on our main site, MrSkin.com,” says Vice President of Marketing Derek Meklir. “MrSkin.com is constantly growing, which is great, but we wanted to diversify our offerings, since we had the ability to [do so] using our existing infrastructure.” The company expanded by creating a bevy of niche sites in the same mold as the tried-and-true original: celebrity skin classified by genre. “Our new niche sites helped us in three ways: connecting to porn, covering mainstream genres, and providing more for our affiliates to market,” Meklir says.
Because Mr. Skin is a softcore operation, the company felt a certain disconnect with the kings of online traffic circulation: hardcore sex-site affiliates. By matching existing content sets with niches already being promoted successfully in the hardcore space, the company managed to bridge the gap. “It is a stretch to push MrSkin.com from a balloon-midget-porn site, since our content is so different and not related,” Meklir says. “By launching sites like AsianMovieBabes, it allows Asian porn sites to promote a celebrity site while still having it relate to their current content. The same goes for BlackMovieBabes, EuroMovieBabes, and so on.
“We also launched niche sites that resonate with cult followings, like BMovieBabes; there’s a huge B-movie following out there,” he continues. “The sites are subsets of MrSkin.com but have the added bonus of some porn content as well as really concentrating on what surfers are looking for: Asian feeds for the Asian site, etc.”
Dividing existing content by niche created an extra bonus for affiliates, Meklir says. “Our existing affiliate base is now able to promote to more than MrSkin.com, allowing them to fill out their ad space, [thumbnail gallery posts], and review sites with more sites in the celebrity realm,” he says.
The company plans more expansion in the future, but every new thing will be firmly rooted in the longstanding model. “The biggest move for MrSkin.com is to take on the mobile world in Europe, Latin America, Asia, and North America,” Meklir reveals. “Our content is currently deployed in a few countries in Europe, and we will be expanding dramatically in the next couple of quarters. We are launching new tools for our affiliates, which will allow them to use newer technologies like RSS feeds and blogs to promote celebrity content. We’re launching a second book in the fall of 2007, which will be Mr. Skin’s Skintastic Video Guide—The 1,001 Greatest Movies to Rent for Nudity.” The book, he notes, should increase traffic to all of Mr. Skin’s Web properties, just as Mr. Skin’s Skincyclopedia did last year.
In cases like Mr. Skin’s, the notion that “the more things change, the more they stay the same” can be very useful.
Foresight
Of course, there is such a thing as sticking too closely to a concept, especially if the concept is just a bit ahead of its time. That was the situation in which 2Much.net found itself several years ago. It took some pretty imaginative mental gymnastics to extricate the company from what seemed like a case of “death by success” and set it on a more productive path.
“Originally, when I started at 2Much, our video streaming was something only the highest-end computers and highest-income end-users could view,” says mediaguy Greg Jones, who has been with 2Much for about three years. “2Much was way ahead of the game, and people said it would limit our market—and it did, to the best pre-qualified surfers on the Web: people with the disposable income to upgrade to the latest, bestest toys. They had the credit cards for fast, easy impulse transactions.”
2Much’s success in the high end of the streaming market inspired intense competition, however, which led to a drop in revenue. “Now almost everyone has that kind of capability, and the prices for streaming have fallen accordingly,” Jones notes. “So, what we did was keep ahead of the competition with the video quality, but affiliates couldn’t really handle our embeds or anything too sophisticated. Because we were small, building tools and galleries and whatnot for them that were more ‘traditional’ was outside our resource capacity. Our high-end video could only be seen on the individual sites we built for [high-end] clients, and the little guys had no way to use our product.”
2Much was sure it was heading in the right direction for the future of online video, but without a gang of clients of all sizes to utilize its broadcasting technology, it had no way to fund further development of the product. What resulted was what Jones calls an “extreme business model shift.”
Instead of continuing to pursue only the highest of the high-end crowd, 2Much “came out with the LiveCamNetwork 1.9 platform, which allowed our ‘little’ clients with a few performers each to pool their performers with those from our other client sites. Instead of using plug-ins at that point, they could ‘plug out’ their performers to an exclusive, though still networked, content bank. A small operator could get not just his two or three girls [online], but a bunch of other live girls on his webcam site. That made people want to buy,” and bumped revenues for everyone in the system. The solution resulted in a growth rate of approximately 600 percent in one year, Jones says.
Now that LiveCamNetwork has inspired competition, too, 2Much is ramping frame rates even higher—“to the limit, actually,” Jones says. “We now feature a live, high-definition video stream that displays in widescreen mode and is absolutely incredible, even to our jaded eyes. It’s a platform that’s bound to get the others running back to the drawing boards.
“Our philosophy these days is to push the technology until the market blocks it,” he continues. “When our streams go beyond what the market is able to literally view, we have to hold back. A certain amount of restraint, without condoning built-in obsolescence, is part of a good market adaptability strategy. That way you always have something new to release when it can really take off.”
As an example, Jones cites the surge of video-on-demand and pay-per-minute delivery models immediately upon the news that broadband Internet penetration had risen to nearly 60 percent in the U.S. “It was like a watershed—a dam we’d seen the crack in a while ago and did our trickling thing to show it could be done, so now when the dam is bursting, we’re riding the wave rather than being overwhelmed,” he says. “Our market is really hitting its stride, and people who thought live video and webcam chats were a simple form of up-sell now see the revenue potential PPM truly has.”
It’s the future possibilities 2Much can see within reach that keep the company teetering on the cutting edge, Jones says. “You can say that we never played to the lowest common denominator,” he notes. “The fact that [broadband] and hosting and computers and connections are all getting less expensive makes the creativity and applications behind technology all the more exciting—and dizzying.
“For the first time since I was a kid, I can actually have realistic wet dreams of cybersex or holographic, tactile, full-body virtual celebrity schmoozes,” he continues. “We’re looking into some wild stuff, like fantasy landscapes as virtual environments for live models in real time. Maybe we’re moving toward having the ultimate, safest, most restriction-free sex in human history, and it can’t be considered bacchanalian or immoral because of the medium—which at that point may be indistinguishable from the real thing.”
Finding balance
Business essentials are as notable for what they are not as for what they are: Agility doesn’t mean making snap decisions; perseverance doesn’t mean clinging to things that aren’t working, and foresight doesn’t mean pulling bleeding-edge notions out of thin air. Fantasy must be tempered with reality, and entrepreneurs who make their livings purveying fantasy are no less subject to that rule than anyone else. It is when businesses can strike a balance between flexibility and rigidity, maintaining the status quo and expanding, and the lessons of the past and the promise of the future that progress is made.
Be progressive.
