trends

Forging Our Way Ahead

Stephen Yagielowicz
Another new year has dawned and with it, new challenges and opportunities that will test the mettle and resiliency of those who would contend in our arena — and handsomely reward the victors of this titanic struggle to dominate and succeed in the face of so many foes: an uncertain domestic political agenda that is yet to be fully revealed by the incoming Obama administration, the unsettled economic situation and the already well-worn trails of piracy and a consumer preference for "free" — which our industry has so often trained its customers to expect.

The "sorting out" of the industry is well under way, with megabrands consolidating their market share and increasingly gobbling up all the pie. The "little guy" — as well as an increasing number of not-so little guys — are all faced with the same issues of how to compete with tube sites and spendthrift customers. Even if you can get beyond that, how do you compete with, say, the content depth and breadth of Private, which is now combined with the high-level digital distribution prowess of Gamelink (which the former recently acquired)? And those tube sites boasting the huge traffic numbers and taking the blame for much of the paysite promoter's sales woes? They have the same problem that the paysites do: competing with tube sites — other tube sites…

When declining sales have affected various market segments in the past, or a hot, new technology is making the rounds (especially when associated with a trendy buzzword), many operators in this industry have dealt with the issue by adopting a "the grass is greener on the other side of the fence" attitude, which we often see expressed in public message board postings:

"I hate spam, but email is the best way to drive sales — who has email lists for sale?"

"TGPs will ruin porn! How can we compete with all this free porn? Who has a script?"

"TGPs are so dead — I'm going to build an MGP! Oh wait, maybe I'll build a blog — there are plenty of free scripts, and I hear from a guy who would know that they really make big bucks!"

Today it's tube sites. Tomorrow it will be something else; and the panic over whatever "it" is and how "it will kill porn" will be intermingled with the cries of "give us the tools so that we, too, can partake!"

The danger lies in what I like to call "The GFY Boat Ride" — named after an extremely well-attended adult webmaster party at a Florida Internext several years ago, where the word passing about "something really cool happening over on that side of the boat" caused a mass migration of drunken webmasters that caused the boat to tip so uneasily that some observers fled — fearing the whole lot would be tossed into the harbor's cold water after the ship capsized. Fortunately, cooler heads prevailed and the ship remained afloat — but would the story have had as happy an ending had some folks not bailed?

To leave (and if so, to where?) or to stay, and if so, on which side of the boat should you be on? These are the questions that operators have to ask themselves this year and the answers may show that indeed the grass isn't always greener on the other side of the fence — and may in fact be crabgrass.

Ask the studio guys. They've grown up selling individual titles to individual viewers for $50 a pop, but facing declining (some say nonexistent) DVD sales, are moving online in a big way — but often shaken to their financial cores by an Internet business model that sees them selling access to all of their titles for less than $20. From my perspective as an adult webmaster and traditional affiliate site promoter, however, the studios are flooding the web with copious amounts of high-quality professional content that many established shops will be unable to profitably compete with. As far as sales are concerned, for many traditional paysite operators the studios are every bit as much of a threat as tube sites.

All of these issues and countless more can be mitigated through a drastic restructuring of business and marketing plans to suit today's evolving realities — regardless of the size of your operation. In some corners, this is seen as a time of collective head-scratching and second-guessing; in others it's a time of despair; and for others still, a time of hope.

This is a puzzle that intrigues me: How can you sell a product that people can acquire as much of as they want for free and thus do not need to pay for; are financially pressured not to make purchases on nonessential "extras;" and are wary from media reports or even first-hand experiences of the dangers of the adult Internet and identity theft, making them hesitant to make online purchases in the first place?

If I told you everything I was thinking right now, the boat might flip over, so I'll give you some of the conceptual highlights I've been contemplating over the weeks and months to come — both in this column and elsewhere at XBIZ.com.

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