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Will Mobile Adult Boom? 1

Will Mobile Adult Boom? 1

March 30, 2005
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" there are already a wide variety of companies who have dipped their toes in mobile porn's waters "

In the past few years, cellphones have come a long way. Far from being mere mobile telephones, the devices are now used for taking pictures, playing graphics-heavy games, checking movie times or the weather and watching increasingly high-quality video. But if the history of previous technologies like videotape and the Internet are any indication, mobile devices also will soon be a hugely profitable opportunity for producers of adult content.

Already, mobile porn is big business in a number of countries with such industry heavyweights as Playboy, Vivid Entertainment, Hustler and others either looking to get involved or strengthening existing efforts. But in the short term, it's the smaller content providers that may have the best chance to cash in, since, experts say, they were the first to adopt the technology.

Regardless of who is providing the content, though, it's pretty clear that the next few years are going to be highly lucrative for producers of mobile content, especially in Europe and Asia. All told, however, analysts from the Yankee Group estimate that mobile porn will be at least a $1 billion global business by 2008, while Juniper Research says the numbers could go as high as $2.1 billion by 2009.

Do Numbers Jibe?
As many industry observers have noted, only regulation or the fear of backlash on the part of mobile carriers are factors that could hold this segment back. Even analysts admit that they aren't sure if numbers like those from Yankee Group or Juniper are on target, given the brakes on natural growth that may be placed on the industry.

"Regulatory issues will undoubtedly have a significant effect on this sector," Windsor Holden, the Juniper analyst who authored the report "Mobile to Adult: Personal Services." "But while we do not believe that the adult sector will be mobile's 'killer app,' global revenues in excess of $2 billion are not to be sniffed at."

Indeed, there are already a wide variety of companies who have dipped their toes in mobile porn's waters. One such company is Pocket Joy, a Las Vegas company whose full-color erotic images are available in the U.S. as well as Europe and Asia and whose slogan is "Porn in the palm of your hand. What you do with the other hand is your business."

Other examples, said Emily Turrettini, the author of the influential mobile technology-oriented blogs, Textually.org and Picturephoning.com, include offerings in Thailand from Penthouse and For Men; animations from the Kama Sutra available to "Latin lovers who are lacking inspiration" in Brazil; videos, pictures and adult entertainment news from British porn actor and director Ben Dover's new partnership with mobile content provider Symbios; and more.

Meanwhile, Playboy recently announced a partnership with Dwango Wireless to make available all kinds of Playboy-themed content — images, games, video and voice clips and more — to as many as 170 million American subscribers. The content should be available early this year.

But Playboy spokeswoman JayJay Nesheim said that the two companies already have similar arrangements in 17 other countries, including Australia, England, Italy, France and Brazil.

In the United States, services like PhoneErotica.com, which the Yankee Group says gets 75 million hits a week for its adult content, are the existing leaders. Another is Inhand Mobile, which offers more than 2,000 video clips to mobile users.

Yet the U.S. market without question pales in comparison with that of Europe or Asia. Of the $1 billion worldwide market in 2008 predicted by Yankee Group, only $90 million of it will be in the U.S. Still, Juniper's Holden told XBiz that the U.S. market can also be scene as having the greatest upside potential for content providers willing to be patient.

"Europe and Asia are relatively mature markets compared with the U.S.," Holden said, "and so growth [there] in the latter half of the decade will tail off significantly."

The upside in the U.S., of course, comes from the fact that America has always been behind the rest of the world in deployment of wireless technologies. Thus, as American carriers begin to roll out their advanced third-generation, or 3G, networks, the likelihood is that more subscribers will have access to, and thus will spend money on, mobile porn.

This year, Verizon Wireless is rolling out its V Cast 3G network. According to spokesman Jeffrey Nelson, V Cast will allow subscribers to access a large number of video clips, music videos and 3-D games. Other American carriers like Sprint PCS and Cingular trail Verizon in the deployment of the advanced networks, which is one reason why experts expect that mobile porn revenues in the U.S. will lag behind Europe and Asia in the coming years.

Still, Holden said, mobile porn by no means depends on 3G to be a moneymaker, given that 2.5G networks are fairly common throughout the world and that people are willing to shell out dollars, euros, yen and other currencies for nearly any kind of mobile adult content.

"Both text and images can be found on 2G handsets," he said. "Images on 2.5G and 3G obviously have greater detail and clarity, while the networks also permit downloads of video clips and, particularly 3G, video streaming. The major source of 2G adult revenues is 'dirty text,' whereby a subscriber engages in text discussions with someone who he fondly imagines to be a buxom twenty-something wearing the bare minimum of clothing, but is in all probability a bald forty-something hack doing a spot of moonlighting."

In Part 2 we'll look at industry perception and the role that content plays in the mobile equation. Stay tuned!


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