trends

A Recipe for Success

Slav Kandyba
When Margaret Morgan started Platinum Media out of her home in Waterville, Maine, she didn't have a business plan. And although the company, which specializes in amateur content, recently signed a distribution deal with Cezar Capone, the go-with-what-makes-sense approach still holds up, she said. There was no sitting down and writing down a business plan or reading books — creating a web-only storefront was the move that enabled Platinum Media to sell its DVDs and steadily grow its business until the deal with Cezar Capone came about.

"We just kind of rolled along with things and checked on the feedback," Morgan said. "We took some of our personal taste and the customer taste and made that our foundation."

Platinum Media is hardly alone in going back to the drawing board. Overall, dramatic changes in the Internet landscape brought on by the explosion of social networking sites and Web 2.0 applications have caused adult businesses to change their business models. Still, a solid idea followed by extensive marketing research ensures that there is "win-win margin" should be at the core of any adult company's business plan, said Craig Tant, billing company CCBill co-founder who is working on a new kind of company within the adult space.

Once a company's idea takes off, figuring out how to stave off copycats becomes increasingly important. If business takes off, a growth plan that focuses on reinvestment of profits back into the business is critical, rivaled only focus on top-notch customer support, Tant said.

A good resource for start-up companies is the U.S. Small Business Administration's website, which offers a step-by-step business plan overview at SBA.gov.

"A business plan should be a work-in-progress," according to the website, which continues that "even successful, growing businesses should maintain a current business plan."

Not far behind the homepage is a list of 10 areas that every successful business plan should have, which the SBA considers "the essentials": executive summary, market analysis, company description, organization and management, marketing and sales management, service or product line, funding request, financials and an appendix.

(For those still inclined to read books on the matter, a quick Amazon search reveals "Business Plans Kit for Dummies," which retails at $23.09 new or as low as $5.09 used).

For Triple 10 Vault, which operates an affiliate program network, the business plan came together the old-fashioned way: through research and getting to know people, said Triple 10's CEO Luca Bizzotto.

"Once we were comfortable, our plan was to get noticed, so we had a huge launch at Internext Miami two years ago," Bizzotto said.

Triple 10 also gambled on a chance that offering up gender-bending content to straight surfers can drive traffic to an affiliate program's network of sites. The company took a gamble on a tranny site when it observed that curious straight surfers would peek in, stay, and then proceed to the straight sites.

Following the launch, the plan called for rolling out sites only after they were reviewed by industry veterans — the "go-to guys," as Bizzotto calls them.

"We love criticism," he said. "Basically as we grow our plan is to have a variety of sites with all different niches. We thoroughly study the niches we enter to make sure we develop a quality product that will convert. We strive to keep the trial cost for the member as low as possible to get them in the door because we stand behind the quality of our content."

Elsewhere, the advent of tube sites is causing old business plans with DVDs and affiliate programs at the center to go away entirely. While many content producers and distributors keep marching on, a number of companies — and even performers — are finding ways to branch out, brand and create business plans that adult industry has never had before.

Out of necessity as much as innovation, more and more performers are building businesses around their brands, bringing into the adult industry their passions from outside. Whether its sought-after Latin performer Marco Banderas recording music and even shooting a video (for a song called "Porn Life") or veteran talent Sinnamon Love's plans to launch a website later this year that will combine adult and mainstream content.

"Having the porn background I hope people recognize me as a legitimate journalist," Love said.

Even the adult industry's most formidable brands aren't prone to going through rapid change. Having decided to go out of the DVD business all together, Playboy Enterprises Inc. has hired streaming video specialists from the mainstream world to help revive its brand on the Web and in the process attract the young male demographic. To that end, the company has hired former employees from Heavy.com. Another Playboy executive, Timothy Sabo, has created a kiosk that utilizes USB Flash memory as storage for adult content. Flash N Go kiosks were to debut at trade shows this month, following a test run at strip clubs in Southern California.

Finally, with all the new developments, old business models still manage to hold out in the winds of change. That's because companies such as Adult Developments, which operate affiliate programs NichePay and ArchiveCash, still believe they can tap into "taboo fantasies of average people" with sites such as the recently launched RedneckConfessions.com and several celebrity sites, said DJ, Adult Developments' affiliate manager.

Redneck Confessions, in particular, offers exclusive interracial content that "proved very successful using the same process for conception" applied at the network's other sites, DJ said.

Over in Maine, Platinum Media's Margaret Morgan — who started out with no business plan — may just have the last word on the essentials that make up the ingredients of any solid business plan.

"We're self-investing, with my husband and I always putting our own income into our company," Morgan said. "We combine passion and dedication and find people that we can work with."

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