It was a two-man operation, until Eric Johnson — an accountant by trade — joined the team as a consultant. By this time, the operation had spread into the condo's dining room.
"Erik set up the computer on the dining room table," remembers Johnson, now president of Sureflix Digital Distribution, the parent company of Maleflixxx. "When his partner walked in, the look on his face said, 'You've taken over my house. Get out!' That's when I knew we had to look for office space."
They found an office and kept hiring people as the company grew. Today, Maleflixxx employs 35 people as one of the premier online gay video-on-demand (VOD) networks, with Schannen still handling his area of expertise, while Michel Lozier takes care of business development, making deals for content and putting together the company's network of affiliates. Now Maleflixxx represents hundreds of studios, including all of the major players. The network features more than 25,000 scenes, while brokering content from around the world. For a time, the firm could boast having the world's first and only 24-7 gay adult channel, Maleflixxx Television, on a premium pay-per-view platform.
"We're also in partnership with other companies on various mobile and cable platforms," Johnson said. "We don't do any production. We represent the studios, and we sublicense their content around the world.
"Consumers online can find us at either maleflixxx.tv or through the hundreds of affiliates that partner with us. We have other partners that take care of traffic, so we can white label Maleflixxx on a premium pay-per-view platform, where we offer it on a pay-per-scene basis. We're also launching a pay-per-minute platform soon, called splashshots.com."
Maleflixxx customers visit the site and decide which scene they want to watch. They pay a fixed fee for that rental, and have choices regarding the length of time they'd like to have access to that content. The most popular choice is for two hours, and the customer then pays the two-hour fee, which gives access to the scene of choice for as often as he'd like to watch it during that two-hour period.
One of the features that sets Maleflixxx apart is the picture quality of the videos, something that the company stresses, according to Johnson.
"Streaming is not just about the quality of the stream," Johnson said. "It's also about the quality of the raw product. We encode in multiple byte rates on several different platforms, and our encoding process provides better visual quality. We color correct and manage the encoding process to get a higher quality raw data file delivered to the customer. So the quality of our streams is better than most in the industry."
Another way Maleflixxx separates itself from the competition is the company's focus on merchandising and promoting the studios' content. They achieve this through several different programs.
"One is an episodic release program," said Johnson, "in which we take blockbuster movies and release them scene by scene for a period of time. This allows us to squeeze every bit of value out of the individual title. On top of that, our marketing is very strong, and it's compelling to customers. Finally, we recognize that customer support is critical for online businesses, especially when you're dealing with disparate technology components like streaming, user interface and content delivery.
"It's really essential that you communicate with your customers and resolve their problems. We get feedback through customer support about how much people like the way the product works, and the fact that it's well-supported."
Maleflixxx sweetens its customer relationships by offering new promotions on a monthly basis. The current promotion is a contest in which the winners are awarded "free porn for a year," which Johnson says is hugely popular with consumers, even when they don't win.
After working so long with customers in the gay community, the Maleflixxx brain trust has learned that there are special aspects to this market that they must acknowledge.
"There's a big difference between the gay and the straight markets," Johnson said. "In the straight world, it's about volume and having lots of content. In the gay world, it's more about genres and quality. The studio quality is very important, and so is the merchandising.
"Also, it's a smaller market, because it's a smaller community. But as it is in the straight market, there are some very big stars — probably more on the gay side than on the straight side. The most popular genres remain muscle and twink.
"One important point is that the gay audience doesn't like hunting around long to find a specific piece of content they're looking for. That's why we make it very easy for our customers to narrow down their searches when looking for specific content.
"On average, gay consumers probably buy more product than straight people. Gay men have a community that tends to be more open sexually, so there's no taboo about porn as compared to what might exist in the straight world, where people might be concerned about someone finding out they're using the product. They have wives and kids, so it's not the same. Gay men share porn more freely."
This sharing, of course, can lead to one of the great headaches of the industry today: product piracy. Johnson, like just about everyone else in the business, views piracy as "the scourge of the industry," so he and the other Maleflixxx officers have taken steps to deal with it.
"We've spent a lot of time and energy supporting anti-piracy initiatives," he said. "We have a major initiative with the Free Speech Coalition, which involves a year-long program to educate studios on how to protect their content. Piracy affects us, but not as much as it affects the studios."
In addition to its aid to the studios, Maleflixxx also makes a point to reach out to the gay community. The company donates money every year to gay community-based organizations, especially AIDS programs.
"We believe in a strong gay community, and we put money back into that community," Johnson said. "World AIDS Day is Dec. 1, and we'll donate a dollar to AIDS-related charities for every rental in our system. We're also involved in the local Toronto gay community, and many times each year we do charity events in which we feature adult stars. We help them promote their studios, and they help us with fundraising."
From this, it's clear that Maleflixxx has become more than just another online VOD network. Its officers have made it a pillar of the gay community. What started with a computer on a dining room table has become an important part of a social fabric.