An Intense Week
Having been given the honor of doing the keynote address at XBIZ L.A., I spent this week tweaking my presentation, which is basically a retrospective of the past 10 years of the industry’s history, my take on the pivotal point that we’ve reached as an industry, and where we ought to focus our energies in the months and years ahead. It was a beneficial experience to go back through our online industry history like a yearbook, to reabsorb the lessons that we might have forgotten, and draw on the past as a point of reference for moving forward.
On the other hand, I’ve been also heavily involved with coordinating CPR2 next week and dealing with the current climate around piracy in our industry. In the middle of this, a news outlet posed the question “Will Pink Visual’s strategy work?” I already had the answer in my head, but having the question published like that led me to write down my thoughts, which include the belief that this industry has started to set aside its complacency toward piracy, and has actually begun to mobilize. I believe we are starting to turn the tide on piracy, and we’re reaching a point where the pressure is shifting to those who engage in piracy. We’ve seen legal agreements to use copyright finger print filtering, voluntary movements to use that same technology on the part of some sites, two massive torrent search sites have closed, and millions of end users have become informed about the real consequences of engaging in piracy. All of these things have happened in a short nine month period, after years of relative inactivity, outside of a few select studios (Titan Media comes to mind…)
I don’t attribute this to us at Pink Visual, but to the increase in companies awakening to the fact that piracy is, and has been, something that we should always put pressure on, even during times when revenue is flowing freely. I find it interesting that pro-piracy outlets will often point to mainstream media companies profiting even more now, and use that as an argument that those same companies shouldn’t be battling piracy as much as they do. Maybe it is in part because of strict enforcement of their copyrights, and because they put pressure on piracy, along with other good business practices, that these mainstream media companies are enjoying stellar sales? In any case the justification to rob a person because they are rich still doesn’t fly with me. See TorrentFreak.com
In hindsight, knowing that during our peak times at Pink Visual we didn’t have an anti-piracy strategy and seeing how that lack of strategy hurt us, it makes complete sense to me that a strong anti-piracy strategy should always be in place, regardless of what your sales trends look like at the moment. That’s where CPR2 comes in — providing top-of-the line information that studios can draw on to create and customize their own anti-piracy strategy. This is not a one-size-fits-all situation, and not all companies will (or should) approach the problem of piracy in the same way -- but they do all need to have an approach to the problem, that much should be clear to all of us by now.
While I’m proud of my part in it, it’s also true that the CPR process has been frustrating at times, too. Although I considered the CPR1 a success and anticipate a successful second edition next week, it’s frustrating to see the number of studios who just don’t see anti-piracy strategies as being important at all. What’s been even more exasperating is that there are people who haven’t attended a CPR event who have serious misconceptions about what goes on at the event, and they are eager to share those misconceptions with others in the industry, but don’t evidently don’t care to bring up their perceptions with us, directly, which would give us the opportunity to set them straight about the CPR.
Luckily, I tend to move on from dwelling on my frustrations quickly, and so I’ve switched my focus from being irked by critics to appreciating and supporting those studios who have undertaken anti-piracy efforts. I look forward to seeing many of those faces in L.A., next week.
3 Questions and Answers from the Show Floor
The trend questions.
I hear the smaller number of companies exhibiting and smaller space at AEE is reflective of the state of the industry’s recession, would you agree?
My Answer: No. Although there have been industry struggles and obstacles, even if the financial situation of every company was at its top level today, exhibiting in the same ways companies used to just doesn’t make sense anymore. It’s more of a reflection of the digital age where physical goods and presence are just not that necessary, or worth the cost. Super fans are able to develop relationships with their favorite stars through their own personal websites, facebook, twitter, and even live cams. Business deals have been getting done through online communication for years and waiting around for a big buyers show really isn’t feasible in the fast paced market. Yes, some new deals come out of these events but these events are often about meeting in person and relationship building. Lastly, all of this physical presence doesn’t seem to make sense at all. Why are companies and organizers still spending money to print large ads that will be thrown out? Seems like renting a “jumbotron” screen would be more effective and the use of digital screens would be a way to cut costs, and still allow companies opportunities for branding and sponsorships. I mean, a company could even have a live girl talking to the fans as an ad, for example. More to the point, it seems that the event organizers (and this is true of many adult industry events) need to move the exhibition experience into the digital age.
Seems like with all the piracy going on, “live” is really the way to go?
My Answer: Kind of. The live experience is definitely something that should be part of, or complimentary to, any adult studio’s offerings, but what’s really needed is just a better experience for the consumer, generally. From having sleek and easy-to-use interfaces, to offering live content, games and other interactive experiences, all in a way that allows the user to find what appeals to them easily, will help a company create an experience that is hard to match elsewhere. I also believe the portion of the adult consumer market that enjoys the live experience is just that, a portion, and it doesn’t make sense to serve that portion at the exclusion of the larger portion that enjoys recorded video viewing, and may not want the live experience.
So I have an idea for a series of adult videos to start my business, is there a company I can talk to that can help me and do everything?
My Candid Answer: Ummmm, no. No one is going to help another business get started or believe in your ideas as much as you do. In fact, if they are pretty decent ideas, you run the risk of the companies you share the ideas with running off with them before you can even begin to develop them. The only person who can help you is you. You can pay others to do the work you need them to do, but they aren’t ‘helping’ you; they are working for you. So, if you really believe in your idea, go out and get it done.
Lessons Learned in 2010
For those companies that are still standing or even growing, there’s a lot to celebrate, even if 2010 wasn’t your best financial year. Last year made us stronger and we walked away with experiences to learn from. In some ways, it’s all of those “great” or “easy” years that we should dislike, because it’s those years that made us think everything we touched turned to gold and that we were immune to external factors. When I remember the Ibill fiasco, in which many companies lost some of their membership revenue, and compare that to the most recent epassporte issue, the old adage “fool me once…” comes to mind. Not that either company was necessarily planning on fooling others, but my point is that when things were great, we didn’t learn the lessons we could have learned as well as we absorbed them once times were tough.
So here’s my quick list of lessons from 2010 to walk away with. (These are presented in no particular order, nor are they an indicator of any direct impact on my company):
1) Lifetime Revenue Share doesn’t really exist- affiliate program apparently can stop paying affiliates even for their revenue shares at any time apparently, so let’s avoid that going forward or work with companies willing to legally bind themselves to pay for the life of the customer.
2) DMCA is an affirmative defense, not a form of immunity from copyright infringement. (In other words, all of you copyright holders still have the right to bring a lawsuit, even if the site you’re looking to sue has that little DMCA disclaimer at the bottom….)
3) It’s okay that the DVD model is declining. If it impacted Blockbuster and Hollywood Video, then it’s pretty safe to admit it’s impacting the adult industry, and to accept and plan for a diminishing DVD market.
4) Keeping large sums of money in a virtual location anywhere, like Epassporte, is not a good idea. Let’s stick to real banks you can walk into, or at least not put all our eggs in one basket.
5) Complaining on the boards doesn’t work anymore. Why waste our breath with complaining on the boards to get results? If it’s something really worth it to you (anti-piracy, ethics, etc.), put a real action plan together to get something done.
6) We still are targeted by those from outside our industry. From piracy to obscenity, from .xxx to OSHA regulations, the climate in the industry is risky and we all end up impacted. We should do what we can to support the defense of our industry and support the Free Speech Coalition.
7) Companies who engage in overly-aggressive billing strategies don’t care about the consumers, don’t care about the industry and don’t care about their business partners. In the end, everyone gets screwed by their business practices, so maybe we shouldn’t support them on their get rich quick schemes for fast money? (For that matter, this is a lesson we should have learned in 2004).