During the first part of June, FSC distributed its first newsletter to APAP program participants. FSC has contracted with prominent industry attorney D. Gill Sperlein to oversee the program including the notice and takedown process.

In the newsletter Mr. Sperlein describes the method FSC’s APAP utilized to track subscriber content.

In May, on behalf of its subscribers, APAP fully implemented VideoTrackerX, a unique video tracking solution from Vobile, Inc. VideoTrackerX allows producers to locate infringing copies of their movies on targeted user generated content sites (UGCs) such as xvideos.com, redtube.com, gayforit.com and others. Vobile developed this highly dynamic technology primarily for television and box office movie companies.

Most of the Hollywood’s big name studios appear on Vobile’s client list. In a rare case where the adult entertainment industry lagged behind mainstream, many studios only recently realized that technological solutions paired with legal action can effectively reduce the massive infringement that is crippling the industry. Vobile’s VideoTrackerX automatically locates infringing copies and if the video match meets certain criteria, sends a notice to the infringing website demanding immediate removal.

The newsletter went on to report that the cumulative number of views for the 18 content providers on the 16 UCG sites tracked was 202,887,578. It is important to note that the actual total number of views was considerably under reported as redtube, xvideos, tnaflix, empflix, and slutload do not report the number of views so these UGC sites are not included in the total.

As FSC’s APAP focused on the UCG sites and copyright infringement on a B2B level, FSC also began the long process of consumer communication and education with FSC sponsored anti-piracy PSAs.

The response to the PSAs was overwhelming. The videos went viral with over 500,000 views on YouTube and stories in every major national newspaper. Consumer comments were consistent; they do not believe that they should have to pay for viewing adult content… period. Adult producers are not alone, consumers feel the same about online mainstream movies and in the beginning, music as well. The challenge our industry faces is how to turn the billions of nonpaying into paying views.

To meet that challenge, a number of factors need to be addressed:

• In pressuring UCG and torrent sites to go legitimate what alternative can the adult industry offer?
• At what price-point are nonpaying consumers willing to purchase content?
• Can we package our content in a manner that appeals to these viewers?
• How do we sell our product in a user-friendly manner with payment processing that is secure, seamless, anonymous/confidential (virtual currency perhaps)?
• Once purchased, how will consumers be able to access content — laptop, television, cell phone, iPAD?

The consumer of the future will click, press and point at whatever content he wishes to view, enter a password or code and be able to view the content on whatever device is most convenient at that moment. He will probably pay between 99 cents and $5 depending on the clip or package and will add it to his or her library.

To reach this consumer, we are going to have to listen to what the viewer wants to buy and how much he is willing to pay. The idea of such a low price point may be difficult to swallow for many, but if you consider the billions and billions of un-monetized views — dollars just being left on the table — repackaging content to sell as .99 cent clips starts to make a lot of sense.