Intellectual property is no small matter in the adult entertainment industry. Attorneys who work with adult-oriented businesses can keep themselves very busy answering questions about licensing. And when the licensing of adult content is done wisely, it can be advantageous for all parties involved.
Scott Rabinowitz, COO of Deep Throat Digital, explained that because branding is so important to adult companies these days, they need to give serious consideration to the ways in which licensing deals can enhance a brand. Rabinowitz is no stranger to licensing deals; Deep Throat Digital is the content and brand licensing arm of Arrow Productions, the Las Vegasbased company whose catalog includes 1972’s Deep Throat, 1973’s The Devil in Miss Jones and many other favorites from the Golden Age of Porn.
“There are more multi-channel opportunities to maximize your brand in 2013 so far than ever in history,” Rabinowitz explained. “While there are many more options to generate income from licensing in 2013, it is also very crucial that mature brands choose licensing opportunities that will extend brand equity and not reduce a brand’s value.”
In the digital age, technology is evolving more rapidly than ever — and Rabinowitz emphasized that adult companies need to be aware of all the different platforms that are available when they enter licensing agreements. “The tech evolution just in the past couple years means you need to ask more and better questions of prospective licensees, such as whether a given license provides publishing rights on multiple or single platforms,” Rabinowitz asserted.
“In simpler terms, if someone wants to license and pay you for use of your movies and pics, do their rights extend only to the eeb versus print or broadcast? Further and very key, with the advent and growing dominance of mobile platforms for content delivery — sites, apps, etc. — licensors and content owners need to clearly articulate whether a licensee can publish to all web users versus desktop computer, tablet, smartphone or overall mobile users.
“The devil is in the details, but knowing the ‘territory’ that your new licensee will work within is crucial to avoid overlap, avoid missed opportunities and to avoid extending overly broad rights to a licensee unnecessarily.”
Alex K, product manager for Adult Centro Market, said that it is imperative for companies involved in adult licensing to stay abreast of the many delivery options that are available for content. “As people are able to consume content in what seems to be an exponentially growing number of ways, content will need to be licensed to meet those demands,” Alex explained. “Licensing hasn’t really been fully addressed in this respect, and in the coming years, the content licensors as a community will need to decide how to address these increases in delivery methods.”
The expanding market for mobile adult content, Alex added, could result in new customers in places where there are many people who don’t own desktops or laptops but own mobile devices. “Mobile is already in an extremely large growth rate, including territories with large populations that may not have had a great volume of Internet users due to the prohibitive cost of desktops,” Alex noted.
“One change will be the type of content; as mobile clients, laws, and business models vary from country to country, a larger need is arising for softer content in some areas. Another point of contention is how to license mobile. Currently, content producers wish to license mobile separately, which poses problems of how to define mobile networks or devices that no one seems to be considering or addressing at the moment.”
Alex continued: “In regard to licensing, we’ve been able to use technology to help both buyers and sellers close licensing deals with less hassle, using features such as digital screeners, customized and consistent delivery, electronic agreements and built-in negotiation tools — which allows both parties to spend more time on their core business and less time on the hassles of content licensing. Buyers can add items to the cart, check out, pay, execute licensing agreements and take delivery of their content quickly. Sellers can manage most of their activities through email notifications, making their life easier and allowing them to focus on producing content.”
Andy Alvarez, president and founder of the Tampa, Florida-based Webmaster Central (which specializes in leasing adult content), said that the biggest changes affecting the licensing of adult content are technological changes. These days, Alvarez said, consumers are demanding high-definition adult content and demanding it be delivered quickly on multiple platforms.
“Licensing the HD content is Step One, but the real changes have been in the technology behind the content,” Alvarez observed. “The speed in which content is delivered and ability to deliver the content in an XML gateway — even the ability to advertise and crosssell inside of the videos and to be 100 percent mobile- and tablet-compatible are all features unique to Webmaster Central.
“The reason Webmaster Central is the No. 1 choice for the largest sites in the world, including dating and live cam sites, is that we just don’t deliver HD content — it has to be the best to get folks to pay for it. The evolution of technology doesn’t really affect the actual licensing, but it certainly affects your ability to make your clients money — which is the name of the game.”
Leasing the right content, according to Alvarez, can push a webmaster’s overhead/profit ratio well into the black. “Our clients on average make 10-plus times what our content costs them,” Alvarez said.
Alvarez stressed that adult companies should only enter licensing deals that protect the integrity of their brands. “High-quality, high-definition content is hard to come by, especially niche content,” Alvarez noted. “If you can find it, it’s usually priced sky high or unavailable, as most producers want to keep their content exclusive to their own sites. Because of Webmaster Central’s stellar reputation, we can avoid many of these issues because producers know that we are not going to use their content in a way that would diminish their value.”
Alvarez added: “If you’re a trusted name that doesn’t abuse a producer’s content by offering it to tube sites or the like, then you’re going to be able to make a deal. Simple as that.”