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State of The Adult Industry

Overview

This a summary from a Cybernet Expo 2009 panel, where a number of prominent adult business owners discussed where the industry is now and where it is going.

CC processing numbers are up and in general, the adult industry is working harder to make a profit. Even in the adult industry shows, some panelists are seeing a change in the seriousness in the shows. The adult webmaster and industry shows used to be about partying and casinos at the shows. That element is still there, but there is also a strong emphasis on serious business. The processing agents are saying that the people that are really making money are guys that are harnessing the free opportunities such as tube sites. Webcamclub and cams are two companies mentioned that are creating other ways to monetize concept / solo girl sites. The virtual girl concepts are working well. Cross selling and upselling is a way to make money on webmaster programs, but it has the potential to hurt and build distrust in a program.

Kevin from MediumPimpin.com said that the main current concerns are tube sites and the plethora of free content available online. Kevin just started a tube site and has started advertising on tube sites. People are coming online from facebook, myspace, youtube and twitter. These tools are bringing people into the internet and the same model will bring people into porn. He is doing solo model tubes and getting people hooked on specific girls. Then as you drill down into the tube, you can find a pay model. The tubes are not going away. On cross selling, Dcash does tons of cross sells, with 1500-2000 sites and you are aggressively cross sold into the other sites.

Doug Spink from baneki.com is mainly offshore and he is seeing people doing very well with unique advanced techniques and new business models in other countries. He does not see this innovation happening in the mainstream US adult industry. The participants that are allready past that and are creating new models will be dominating over the traditional old adult model. Doug mentioned that file sharing will never be shut down and that we have chosen to have an open internet. Basically he explained that the market is fragmented and diverse, so the A to B connection (person with porn to person that wants porn) is not consolidated. An example is a production company based in Portugal that pays amateurs to post videos on their site, they sell the videos for $15 a video and they are selling for $150k a month. Aggregation model is profitable, because they are trusted for their billing and their distribution platform. It is a very hands off process. The videos are shared everywhere. There is no DRM on the videos and that is a large part of why they are so profitable.

Diane Duke from FreeSpeechCoalition.com was mentioning that many webmasters revenues are down, but she also noted that alot of innovation has not happened in a while, so this is sort of a wake up call on expenses and a call to innovation.

Dave Cummings, the San Diego producer and performer sees the strip club industry really affected. Online porn and film he sees really hurt by tubes. Cams and dating seem to be the two online models are doing ok.

VideoSecrets are doing free live chat opportunities for example that solo girls can plug into their sites.

Eric Bernstein from embalaw.com mentioned imega.org which is an organization that represents sites. In CA they are desperate for money and next year it is likely that the federal government will start taxing the adult industry.

The big question seems to be how will the adult industry capitalize on these free access models and work within them.

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