trends

Cashing In: The U.S. Market for Mobile Porn

Mark Frieser
There's a lot of buzz surrounding revenue potential for mobile adult content and services in the U.S. market. And while the potential for profit definitely is real, there are a number of factors unique to the U.S. market that must be taken into account in the launching of a successful, profitable mobile adult service, including billing methods, handset capabilities, delivery methods and content types.

Before getting into specific factors for success, let's get an idea of mobile porn's potential by looking at the size of the global mobile adult market. Depending on whose numbers you use, the total global revenue of mobile porn is $2 billion-$3 billion — I think it's probably at least 20 percent higher — or about 5 percent-7 percent of total adult industry revenue. Certainly, that's a good deal of money, with the vast majority coming from a small number of countries across Europe, as well as Brazil, Colombia, Venezuela, South Korea and Japan.

At present, hardly any revenue (an estimated $30 million at most) in the $34 billion U.S. mobile content and services market is derived from adult — a market with more than 271 million mobile phone subscribers, 76 million of whom have access to video and multimedia capabilities. And the reason why? It all comes down to the carriers.

The U.S. mobile content market is unique in that mobile carriers across the board have made it a clear policy from the beginning not to process adult services billing — whether directly through their carrier-branded mobile content portals (on deck) or through transactional billing via Premium SMS.

This lack of reliable billing effectively locked the adult industry out of the mobile content market, with the only exceptions until recently being a small number of PG-rated versions (no nipples, no hair) of adult images, audio and video content and limited text messaging services. And while the mobile carriers know the revenue potential of adult services (several have told me that bikini shots and beefcake are their most popular image downloads), they have made a conscious decision not to allow pornographic content because of a variety of factors, including blowback from religious groups, their subscriber base, potential FCC issues and chargebacks (which are already fairly high for mobile content).

The good news is that in the past 12 months there has been a convergence of disruptive technologies that are poised to create an explosion of profitable adult services —– namely smartphones like Apple's iPhone, alternative billing mechanisms for mobile adult content (credit card billing) and the ability to simply and reliably deliver adult content directly from the Internet and mobile websites. Simply put, you can build and launch a mobile service that can bypass carrier billing, house it on your existing Internet servers and reach the consumer on almost any mobile phone without a direct carrier relationship.

Now, let's break down the impact of these three elements separately and then discuss the necessary elements of a successful adult service for the U.S. market.

Perhaps the biggest factor in the creation of a viable mobile porn market in the U.S. is the growth in the installed base of smartphones and the advent of ubiquitous 3G (read high speed) mobile data connections that allow rapid video streaming and downloads. This installed base of more than 50 million phones — the iPhone as well as devices from BlackBerry, Samsung and LG, among others — allows people to directly access high-quality adult content and services without having to go through the carrier's billing system. And though users do not necessarily need a smartphone to access adult services directly (many basic services can also be provided via WAP and even SMS for phones with fewer features), the functionality of smartphones has put the power of searching, finding and getting mobile content in the hands of the consumer, which is a huge win for the adult industry.

The second factor is billing. Simply put, you don't need the carriers to take care of your billing — you just use the same methods you do for any subscription, per-item, timed or token-based charges and sign people up directly through your Internet site or through your mobile site (more about that shortly). It's simple, your customers are used to this payment method, and to access your service or content only need to receive a link (via SMS) or the URL of your mobile website.

The last factor is the ability to provide access to your services via multiple points of access for actually getting the content. It used to be that you had two choices to get content to users: have your content sanctioned by the carriers for delivery through their carrier portal or deliver through Premium SMS. The third method would be for the user to download the content from your site to their computer and then upload it to their phone, but this is a level of technical sophistication beyond the capabilities of the average user.

In the current marketplace, you have three methods to ensure content/service delivery: directly through your mobile portal, by providing a link in an SMS message or by upload from the PC via Bluetooth or USB connection. The great thing for you and the user is that at the end of the day, one of these three methods is simple enough to successfully access your service.

So how do we pull this together to develop a viable adult service for a U.S. mobile user? Here are the main points:

1. Create a service that works for multiple phone formats.

While the iPhone and sites that cater to it are great, the majority of users have much more basic phones, and you should make sure your service delivers content to these users too. This means that you should have a mobile service that's not only optimized for smartphones handling HTML but allows almost anyone with a mobile phone some form of access. In practical terms this means not only building an iPhone site but the creation of a WAP site and, for the delivery of basic content post-sale, using nonpremium SMS to send download links to the user for most basic types of content. The amount of work entailed in creating a service that will work for most phones and not just smartphones is not that much more than for creating an iPhone-specific offering — and you'll also reap the added benefits of providing more ubiquitous access to your service

2. Use the billing tools you already have at your disposal.

Whether it's through credit card, check, "900" number or another method, you can use the exact same methods of billing you already have in place on the Internet for payment. There is no need to even think of trying to engage U.S. carriers at this point. You simply bring the user — whether on the mobile phone or your Internet site — to the payment screen whenever they are looking to purchase your mobile content or service, then send them to that service through a URL where they enter their user ID and password or through a direct link to the content from your site or via SMS link sent to their mobile phone.

3. Format the content appropriately to provide the right content for the user.

Mobile users want to get to content as quickly and efficiently as possible — and when they do get to the content, it's important to remember the form factor and capabilities of the format. It's been said that most people spend an average of seven minutes per session on adult sites, and a good rule of thumb is to take that number and divide it by 50 percent. This is true both in time spent getting to the content and how long the actual content should be (in the case of video). People do not want to spend all day thumbing around a complicated mobile site to get to a short video or image. And once they get it, they are more likely to want it in a format that is customized for the mobile experience. In practical terms this means just enough to get the user off (e.g., five minutes max) rather than a stream of an entire video.

4. Provide ubiquitous access.

In practical terms, this means ensuring that when a user is on your website, a mobile phone, an affiliate website or anywhere your content is featured, you provide the user with ways to take that content mobile. This can be done through direct links to a mobile content submenu within your site or more efficiently through the use of widgets posted at key content access areas — for example, the user is watching a video and sees a button on the viewer that says "Mobilize!" and then clicks and goes to a payment screen, then to the preferred delivery method. Also, you should have a robust and simple way for users to get your content directly through their mobile phones, either through a mobile portal (smartphone, WAP) or by providing the user with a link delivered via SMS postpayment.

2009 is going to be a breakout year for mobile porn in the U.S. market, with a great deal of new services, growing revenue streams and high levels of consumer adoption. And by using the tools available to you, you can bypass the mobile carriers and create a mobile portal that is tailor made for your users that makes it simple to pay, simple to access, fun to use — and most importantly profitable.

Mark Frieser is the founder of My VIP Room, a creator of adult mobile content offerings. He can be reached at mark@myviproom.com or 908-255-2142.

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