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2008's Biggest Business Influences

XBIZ World Magazine
Recently, XBIZ World Magazine asked several industry players "What was the most important factor to influence your business this year?"

Here's what they had to say:

Launching our white label products for dating and webcams has been one of our most notable accomplishments for the year. Our white label products have enabled us to establish new business relationships that were previously unrecognized.

— Allan Henning, founder and CEO, DatingGold

I would have to say that it is a twofold answer, in that the two biggest factors for 2008 were all the free content on the Internet through the various tube sites and the current economic climate that we are facing today. Both have a factor on the overall performance of your company since the tube sites hurt all lines of business when people can find a bunch of free pirated adult content out on the web they are less inclined to purchase content and the way the economy is today, people just spend less money overall because they are unsure of where their next pay check is coming from. As long as you continue to release premium content out there and go after tube sites that are illegally posting your products then you can combat that issue. If you streamline your operations to make sure that all costs for the product and its related advertising and marketing are justified and again focus on the product lines that continue to make the most money and continue to get those out in front of the paying public, then you are better prepared to deal with both issues.

— Michael H. Klein, president, Hustler

Without a doubt, the explosion of tube sites has influenced not only my business but also the entire industry. Since that very ugly first step called TGP we've been slowly but surely killing the business by giving away more and more for free. As the average person becomes more Internet savvy, it will soon be the majority who can seek out and find for free, that which we're all trying to sell. Because of our unique positioning as a B2B in adult, I'm in a position to see large portions of the industry and I can tell you this, business is down everywhere. Sure, some of it is the economy but the majority of it is the flood of free, high quality content all across the Internet with the biggest offender being tube sites.

— 12ClicksRon, president, 12Clickscash.com

The fluctuating dollar proved a great challenge for us. We are a European company but the majority of our customers are U.S.-based. We were forced to overhaul our advertisement model to keep our revenue stream on target. Now that the Euro has gone down, we are left with an optimized pipeline, so that paid off nicely. Another major factor we had to deal with was the explosive growth of the tube sites, which is changing the rules of the game. We have come up with a solution that fits our reputation as the leading adult search engine.

— Mike Dutch, director of sales and marketing, AskJolene.com

As a new affiliate program, I'd have to say that the most important factor to influence our business has been relationships. We started going to shows and meeting industry leaders well before we even launched our first site. I think this business relies heavily on the people you know, which is why we made it a point to get to know as many people as we could, and we continue to do this every day. At the end of the day, you can have the best product in the world, but if you don't have the resources to show it off you have nothing. Especially as a new program, we came into the industry kind of as underdogs, it almost seemed like we had to prove ourselves that we could fit in and contend. It took some time but as more and more people got to know the guys behind Triple 10 Vault instead of just the "new program that will be gone in six months," we started to become a part of the community and grow with the industry. Basically, people, friends, partners and mentors have influenced our business and have helped us grow and get to where we are today.

— Triple10Terry, affiliate manager, Triple 10 Vault

The single most important factor to influence my business in 2008 was without a doubt, the tightening of the credit markets. This has put many large mainstream merchants in a tough spot with decreased sales, lower profitability, weaker P&L's and declining balance sheets. As a result, many processors such as Global Electronic Technology, Inc./OrbitalPay, who have total risk exposure must tighten in-house risk procedures and approval policies. Fortunately our transaction insurance has allowed us to maintain close to normal approval rates. On the bright side, many adult content providers have suffered lower sales declines than other industry types that we see daily. Given this fact GET/OrbitalPay and a large part of the adult industry will come out of these trying times less scathed than other "mainstream" businesses and processors.

— Steven H. Bryson, aka Steve, CEO / founder, Global Electronic Technology Inc., OrbitalPay

Over the years we have built a state-of-the-art infrastructure we use to run our business. From the e-commerce platform that runs the site to our ability to segment our customer base and market to them accordingly on and off the site, to our video-on-demand platform, and the technical and business know how that comes with successfully managing our business online for over 15 years. This year we decided to follow Amazon's leadership and make our infrastructure available as a service to other companies, adult and mainstream, and leverage it to help run their online businesses. It has been our single largest source of growth in 2008, and we are gearing up to put an even larger emphasis on it for 2009.

— Ilan Buni, CEO, GameLink.com

With the economy being as volatile as it has been, we have had to adapt and become increasingly versatile, as have many other businesses. However, I think that our key to success, particularly this last year, has been our ability to move ahead without hesitation. We have been doing this for more than 10 years and understand that continuously evolving is part of the game. In fact, we are working on many new and exciting projects that demonstrate our understanding of this. There seems to be a tendency to dwell on the negative in our industry and not enough of an initiative to move forward. It is so true that when we are challenged we do our best work and become increasingly innovative. This is an exciting time for the industry. I think that we, once again, have the opportunity to demonstrate our ability to really think outside of the box. Being able to change, and much more importantly, having the will to change, will be the most important determining factor now and always.

— Neda Ghazanfarpour, operations manager, Channel 1 Releasing, C1R.com

The most important factor for me this year was solidifying my relationship with my content producer. This has opened up a number of opportunities for us to put our talents together to create some very diverse products using the high quality content we have been producing together over the last 18 months. It's smart business to diversify your income sources, and with this relationship we will be poised to take advantage of many different monetization opportunities with each piece of content.

— Becky D., owner, Storm Media

Being a foreign-based operation I would have to say the enormous fluctuations in the U.S. dollar. It's been quite a roller coaster ride which has, interestingly enough, worked in our favor quite consistently through the lows against most of the other world currencies thanks to new and innovative services from CCBill and Epoch. Now it's strength that puts it back on par with where it was in 2001 and 2002, which has had a profoundly positive impact on our operational overhead. It wasn't the outcome I was expecting from a global financial crisis.

— Brian Randall, owner Pistol Media Inc. (Gunzblazing.com and Hardgayfeeds.com)

Seeing the "big players" muscling in on our niche. Although they know little about the niche, which is apparent in the sites they were building, they do have the cash and the means to promote themselves well. We had to make some changes to ensure that the Grooby brand remained at the top of the transsexual niche, which included changing to NATS to attract more affiliates, hiring a dedicated affiliate manager and increasing our promotional tools. We also invested heavily into making the websites more user-orientated with plenty of personality and feedback to cement our relationships with existing customers and to reiterate that we know this niche and the models more than any other company. We upgraded to HD and brought all the photographers to Las Vegas for training. I think it's paid off, the sites are doing well and we've just had our most successful opening for a new site in more than five years and have other projects in the pipeline. The big boys aren't going to go away, we just need to ensure we're competitive with them.

— Steven Gallon, owner, Groobybucks

One of the biggest factors that influenced my business this year is very personal. I decided it was time to get back to taking better care of myself. I have been sober for more than a year. I work out every day at the gym, and I try to surf at least once or twice a week. The peace I find while surfing or working out really clears my mind for when I get into the office in the morning. I am now more focused than ever at the tasks at hand. I am also finding closure with some of the issues I have had in the past with other people or companies. This has put my mindset into a positive frame, which is really making this year one of the best years I have ever had financially, as well as personally.

— Bob Rice, vice president of mergers and acquisitions, Virage Media Ltd.

The most important factor in our business this year was the rampant growth of the tube market. Free site traffic has been substantially shifting away from TGP/MGP's to the new tube format. The industry as a whole has to adapt and embrace the new format our surfers have chosen and monetize them in different ways. We can't just continue to rely on the monthly recurring membership platform as our only consistent revenue stream.

— Mark, president, GTSADS.com

In these uncertain economic times, we are aggressively synchronizing our sales and new media initiatives with our worldwide marketing campaigns. In support of this and to optimize our visibility and profits, we have employed key personnel to oversee the growth of each department.

— Farley Cahen, vice president of new media, DigitalPlayground

The euro/dollar difference played a big part on my business. With the euro being stronger than the U.S. dollar, European clients were happy to be charged in U.S. dollars. On the other hand, having employees and vendors in Europe caused a constant adjustment of salaries and rates to compensate the currencies fluctuation.

— Moreno "Mo" Aguiari, co-owner, Adult Digital Solutions

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