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OCCash Grows Despite Besieged Paysite Model

OCCash Grows Despite Besieged Paysite Model

January 14, 2009
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" Despite an upbeat outlook for the launch, his overall assessment of the business model is decidedly glum. "

XXXJay of OCCash is one of the most unique personalities in the business. His trademark tats and larger-than-life persona are legendary, but he is notable as a bright guy who doesn't hesitate to express his opinions, even if it means getting caught up in the occasional fight on the boards.

It's a reputation he seems to appreciate. Regarding some recent GFY exchanges where, at one point he seemed to be on the receiving end, his retort, issued in an assured baritone, was instant. "I think I knocked some people around, too." Indeed.

XXXJay moved to Los Angeles from Atlanta about six years ago. He's been in the industry for twice that long, which gives him a valuable perspective not only on the business as a whole but also on the arc of the affiliate network business model, a subject and skill set he knows well.

Suffice to say, he has seen better days for program owners and maintains few illusions about its future. Nonetheless, OCCash, about five years old, is gearing up for imminent expansion,

"We're launching a program called Lords of Porn and taking everything we learned from OCCash, content-wise, billing-wise and promo tool-wise and putting it into this. Every place we feel we made a misstep, we're putting it all back out again, but now we have five years of experience." The program will launch with half a dozen sites or so.

Despite an upbeat outlook for the launch, his overall assessment of the business model is decidedly glum.

"The clock is ticking on the paysite model," he told me last week. "Unless the tubes all of a sudden just go away, which I don't think is going to happen, there's going to be no need to pay for content anymore."

During a long-ranging interview at his combination terraced Hollywood Hills home, office, band studio and notorious party abode, just a stone's throw from Universal Studios, the man also known as Jay Quinlan spoke candidly on a number of touchy subjects that are clearly on his mind. It was the same sort of state-of-affairs evaluation in which many company owners are inevitably engaging, these days.

"I'm a jack of all trades and a master of none," he said. "I like to think of myself as an idea guy; plus, I understand traffic pretty well." It quickly becomes clear, though, that he also has a healthy sense of pride in his legacy as an industry innovator.

"It may sound a little egotistical," he said, "but a lot of the [affiliate marketing] promo tools that people use now, that have in fact become the industry standard, we developed. To me, the simple ideas work, while the really complicated ones – people can't get their head around. So there are a lot of things that we have done that I've seen copied by other programs, in terms of traffic tools and things like that.

"The thing about this industry is how fast it changes. I don't think there's an industry on this earth where what was law one year is irrelevant the next," he added.

As innovative as he has been over the years, as well as OCCash has done and despite their plans for growth, Jay is fixated on what he refers to as the "huge" problems that dog the industry. Two hot issues are foremost on his mind: tube sites and pre-checked cross selling.

"I think the reason people are now putting a lot of heat on cross sales is because of those people who have been abusing them, who have definitely gone above and beyond," he said, acknowledging that OCCash has used and will continue to use them responsibly.

"There are people right now who own a lot of programs and they are abusing the shit out of people's credit card numbers. Someone referred to it the other day as 'blind billing,' which to me just means theft. They get people's credit card information, actually set up bogus fronts and start banging them through," he said. "On the other hand, I've been in the industry for about 12 or 13 years and remember the old days, when it was really dirty. Things now are actually more vanilla than they used to be."

The fundamentals of the adult online economy are what XXXJay finds troubling.

"You have to be competitive with the affiliates," he said, "but all they want is high payouts. Then there are all the programs offering $100-, $50- and $40-dollar payouts, and then you have to consider that your average trial is a dollar. All of a sudden, the [affiliate is] getting 40 or 50 times the original transaction. Well, the money's got to come from somewhere."

XXXJay says shaving and other tricks, including cross sales, were the answer back in the day and further contends that everyone was doing it. With the advent of NATS and MPA3, however, shaving is no longer possible, but the affiliates continue to demand the high payouts. Add in the tubes and you have a recipe for a precipitous decline, which he says has already happened.

"The whole pyramid is starting to crumble," he said. "It has already hit production to one degree or another. I know people who shoot their own content and now don't even bother putting it on DVD, because they said it just isn't worth it. So, is there going to be no more porn being shot, only user-generated porn?"

There's no question where XXXJay believes much of the blame lies.

"These tube guys hide behind the way the DMCA is written and define themselves as an ISP," he said. "My thing is I don't believe there are all these philanthropists uploading porn videos to tube sites all day. It's impossible. Every day there are 10 new 20-minute videos. With an average bandwidth connection, it would take you about two hours to upload each video. Another thing is that when you're logged in, you're probably going to time out, which leads me to believe that most of that content is being put in on the back end through hard drives. Now, if you're putting the content in yourself, you've lost your DMCA safe harbor. The problem, of course, is proving it."

XXXJay has a solution to the current crisis, though he's probably not holding his breath waiting for it to happen.

"If people want this industry to continue as it is, there are four things you would do to put everything back on a level playing field," he said. "One, you would somehow get rid of all the illegal tube sites. Two, you would get rid of the cross sales. Three, which a lot of people would not want to put up with, all payouts would have to go to a 50-50 rev share, which is a perfectly fine model. And last, people will then go back to paying for content. I mean, it isn't like network TV. It's an optional thing. If we can go back to that, maybe we wouldn't have to go as drastic as to have open members' areas."

In lieu of those remedies, XXXJay sees a continuing decline in surfers willing to pay for anything but exclusive niche and live content. His reference to opening up members' areas speaks to his last-ditch suggestion for the porn biz.

"It's a pretty radical idea, and it would be a huge leap from here to there, but if you could get people in the mainstream to advertise on adult sites, like the Maxims and the edgier brands that don't care as much about having a family image, then the members' areas thing could go away, and porn could be ad-supported, like TV."

Short of that revolution, XXXJay will continue to run his programs — OCCash, Fresh Checks, Snizzshare and now Lords of Porn – even in the face of change that feels like a brick wall. "I've been working at this far too long and I have achieved a lifestyle I'd like to keep. On top of that, I really like what I'm doing," he said, convincingly.


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