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Finding A Way

Finding A Way

November 12, 2003
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" The introduction of skill changes the product from ‘gambling’ to ‘gaming’ – an important distinction that Harrah’s hopes will not be lost on regulators – or the public. "

The American Heritage Dictionary defines perseverance as a “Steady persistence in adhering to a course of action, a belief, or a purpose; steadfastness.” It is this purposeful steadfastness which drives us forward as we seek ways to lawfully and profitably operate our online businesses, regardless of their size or scope.

As the online pornography industry struggles to cope with the dramatic shift from successful startup to market maturation (and saturation) – a situation compounded by regulatory vagueness and an increasingly savvy consumer trained to enjoy the limitless free porn available from short-sighted marketers – it becomes vital for us to examine how other businesses use innovation to cope with challenging situations, and adopt those elements of success which they have profited from.

A case in point is Harrah’s – the popular casino chain founded in 1937. Unlike the online porn industry, there is no ‘regulatory vagueness’ when it comes to online gaming – it’s simple: “you can’t.” Perseverance has a way of overcoming such obstacles, however, especially if applied in innovative ways; and Harrah’s is doing just that with their latest venture, “Lucky Me” – an online casino which bypasses US law by being currently available only in the UK.

But the UK is not the limit of Harrah’s ambitions with Lucky Me – a site which was carefully crafted to be palatable to US legislators in the hopes of finding regulatory acceptance. The major distinction between Lucky Me and ‘traditional’ online gaming sites? The billing structure. Rather than operating on the budget draining ‘pay per play’ mechanism found in real world (and most virtual) casinos, Lucky Me will be offered as a subscription site, with monthly rates reported to be the equivalent of up to $80 US. This unique revenue model was designed to eliminate the very high losses (and resulting family damage) that many compulsive gamblers incur – and that most gaming legislation seeks to prevent.

But it’s not just the billing model that sets Lucky Me apart, it’s also the structure of the games as well – games that rely on the player’s skill to determine the outcome – as opposed to the traditional use of “luck” as the determining factor in the player’s success: ‘Luck’ that can be easily called into question in an arena solely populated by bits and bytes, a programmer’s skill, and a promoter’s greed. The introduction of skill changes the product from ‘gambling’ to ‘gaming’ – an important distinction that Harrah’s hopes will not be lost on regulators – or the public.

“Check, Please…”
Perseverance is not an exclusive hallmark of the gaming industry, as was illustrated by Adult Check and their recent restructuring announcement. While the official announcement from the company was a bold and positive statement about a total revamping of its business and marketing models in an effort to shore up its position as an industry leader both today and into the foreseeable future, the line near the bottom stating that “Adult Check will terminate its relations with and financial commitments to Webmasters not in Tier 1 or Tier 2...” spelled the end of countless Websites produced and marketed by thousands of adult Webmasters.

But Adult Check, like any company, has the right, no, the obligation, to “do what’s right for the business…” And while the percentage of participating sites (or now, ‘content partners’) will dramatically decline, profits should increase and corporate stability skyrocket. By retaining a relative handful of top-producing affiliates they are eliminating the lowest quality sites, and worst performing ‘assets’ from their operation, mitigating some of the pressures AVS companies are receiving from the likes of VISA/MC, and ensuring that the sites they link to are run by known, professional operators – further reducing their liability, and chargeback ratio.

While some folks may see Adult Check’s latest moves as another indication of “The Death of AVS” I see a flexibility in business planning and execution helping to guarantee a company’s future position and an evolution of a proven revenue model that in some ways is ‘the best’ that our industry offers. Adult Check, and Harrah’s, are two companies who deserve recognition – and watching. Stay flexible! ~ Stephen


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