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Video Secrets: Vested in the Future

Tom Hymes
Video Secrets wants everyone to know that while it has different names for its various divisions, just like many companies, its eye is and always will be kept squarely on its core competency — live video chat. It is an important point for the venerable company to make as it rolls out a bevy of new features following an ambitious two-year commitment to rebuild its infrastructure.

"Our company name is VS Media," Director of Operations Brad Estes told XBIZ. "Our affiliate program is Video Secrets; our main website is Flirt4Free. I'm in meetings all the time where people say they want to get their girls on Video Secrets. But Flirt4Free is our consumer-facing site. It can get a little confusing."

One reason Estes is at pains to clarify the distinct parts that make up the whole is because each of the parts is such an essential component of the whole. As co-founder Greg Clayman put it during a meeting in their Calabasas offices, one weak link can bring the entire edifice down, something the VS team will never allow.

"I don't think the sophistication of our focus has been sufficiently portrayed in past profiles, which have focused mostly on our history," Clayman said. "But I think it's important for people to understand how dedicated we are to the three components of our business that are utterly interconnected and dependent upon one another."

Those three prongs — the Video Secrets secret, if you will — are the customer, performer and affiliate experience. As the company looked to the future a few years ago, it made a critical decision to step back a bit and re-gird for the future, keeping those three core elements foremost in its mind. As the company once again begins to reassert itself in the marketplace — and reassert is probably too soft a term for a consistently dominant player in its space - there is no doubt inside the company that the investment was the right move at the right time.

"Maybe 24 months ago, we sat in this conference room and had all these ideas about what we wanted to do to improve the customer experience and grow affiliate traffic and everything else," Estes said. "But to get to those things, we had to do a lot of internal stuff to make sure we could handle it. That's the problem with live video chat. You can't just slap on more servers to handle the amount of video, the number of performers or customers. You have to do a lot of non-glamorous stuff, infrastructure things. We did all those, and it greatly improved the experience."

The improved experience, of course, is live video chat, and VS insists that its new features are already succeeding in improving sales and retention across the board. The key, says Clayman, is to make sure every participant in the food chain is happy.

"It all comes back to making the customer experience the best," he said. "If you make the models happy, they'll put on the best show and we'll have the best models. If the technology's there, then the shows will be seen and heard the best; and if the end-user consumer is the happiest, because they're actually getting what they're willing to pay for, then who really wins is the affiliates. Because it really is this trickledown effect, like a big circle."

White Label
Of the many recent Video Secrets rollouts, perhaps the most populist in its potential appeal is the White Label solution, which is now available to the masses, so to speak.

"We built the White Label so that anyone, any affiliate, could have their own domain, their own video chat site with their own logo, completely branded for themselves," Estes said. "The idea came first out of the past success we had with all the big ones we had done for Vivid, Hustler and other big companies, but we also looked to the future, and it wasn't a big surprise to us that people were going to want to get into the live cam market. It was pretty clear that live chat was the direction things were going in; there were undertones of it for a long time.

"So we decided to meet it head on with a solution. Rather than try to just beat people in the market, we decided to offer something and basically to say, 'I know you want to come into the live chat market. That's terrific. Here's a way you can do it easily, at no cost.'"

Where it used to take a few weeks of intense programming to make a custom-built live cam solution for the big boys, integrating a while label live cam onto a pre-existing site now literally takes minutes, says Estes.

"You could do it in here, point your domain at it, upload your logo and you're off to the races," he said.

The company says speed is but one of the reasons why using their platform makes more sense than building a live cam network from scratch. First, the cost could easily reach into the millions, an investment few companies these days can afford. But even for those that can, the company says the lost time and the risk venturing outside their core competency makes such an endeavor unnecessary and perhaps foolhardy.

"My argument to them is, do you really think your profit margins are going to be better than 30 percent? If not, use us and focus instead on your marketing," Estes says. "Even if you have the money, and it took you 18 months to roll out your own video chat solution, how much did you lose, how much did you spend on programmers, software and everything else? But also factor in the fact that you weren't doing anything for that period of time."

"One of the things we're really trying to focus on, especially in tough time, when static content websites need to make their websites even better, is getting out the message to focus on what you do best and let us do what we do best," Clayman added.

VideoChat.com
Another exciting new product recently launched by Video Secrets is VideoChat.com, which, like the name implies, provides a live video chat experience not dissimilar from the one offered on Flirt4Free, but different.

"Video Chat is a completely separate base of models," Estes says. "So, while with the white label, the same models show up on all the sites, with Video Chat, they are different performers. They're never on both sites at the same time. It's $3/minute, across the board, all multi-user, meaning one-to-many group chat; there might only be one customer in there, or there might be ten. And you have to register to log-in to the system, which is different from Flirt4Free."

Basically, VS is expanding their offerings for consumers, breaking the per-minute experience into three tiers: $3/minute, $6/minute and $9/minute. All are available on Flirt4Free, though the top two dominate on that platform, while Video Chat offers only the lower-priced experience.

The two sites look different and have a different navigation experience," Estes said. "Video Chat is simpler, while Flirt4Free is for the connoisseur power user. It caters to those customers who spend a hundred thousand dollars a year and demand all the little methods. They want to be able to go in and view different things about the models and interact with them with private messaging, using more sophisticated tools than the guy who comes home from a bar on Friday at two o'clock in the morning. He's probably better off with Video Chat. That's not to say that Video Chat doesn't encourage repeat business, but the barrier to entry is lower."

The company believes the lower price point will be especially helpful for free sites that have a tough time upselling their users to a $6/minute live video chat. The transition to free registration and $3/minute is more palatable, they believe. Thus far, the results have been promising; they have seen a spike in new members as well as those who opt for the higher priced experience.

"Adding these price points has worked out considerably well," Estes said. "In fact, they've expanded the website. Not only have they been successful individually, but they opened us up to more customers."

Video on Demand
Launched in July 2008, the company's VoD solution was perhaps always destined to become a reality, especially considering how much content is produced on a daily basis. Indeed, over 550,000 shows have already been recorded, and they add more than 240 hours of content a day, all of it available for purchase online. Affiliates get credit for sales, and it all creates additional revenue for performers and affiliates.

"We have to be one of the largest video producers in the business," Estes said. "No one is shooting that much." Only private shows are recorded, and the customer can decide whether to keep the recording or not, and also whether to keep it private or not.

"Once the show is completed, within five minutes you get an email, saying, I hope you had a great show, click here if you want to buy the show you just directed. So, this end-user now has the ability to keep that show afterwards," Clayman said.

What the company is finding is that people actually want to share their directorial efforts, and that a de facto community is springing up around the internal sharing of content. Not only do people take great pains to plan out their sessions, but they look forward to comments and critiques that follow.

"There's a sort of exhibitionist aspect to sharing it with other people," Estes said. "Now, a year into it, we have half a million recorded shows; a ton of content; ten years of viewing."

"This capability touches all three prongs," Clayman adds. "It obviously benefits the consumer, but it also benefits the performer, because now they can actually take a vacation and still make money; and for affiliates, well, they're making more money, too. It's win-win-win for everyone."

Members Only Shows
One of the new offerings VS Media is most excited about is called Members Only Shows, a rather prosaic name for a product that holds huge potential for adult performer and solo-girl and boy websites. Like all good ideas, it is a simple plug-in solution for performers with membership sites that allows them to do free live shows for their own members, in order to help boost retention as well as to make extra revenue.

"Think about how cool this is," Clayman said. "Suppose you run a site called TomsGirls.com and it's all static, and you're banging your head thinking how you're going to keep going. We will give you our technology and cover the cost of the bandwidth, so that you can do live shows for your website only. Now, your end-users are getting more value for nothing. We're adding a value and not charging a fee."

The hitch also is an upside for the owner of the site. Not only are they hopefully retaining and making new members, because now they're doing live shows for the same cost of their membership, but they're also making additional revenue when they are not performing live for free.

"If their customers go on to our network afterwards," Estes said, "then there is revenue and it's a standard affiliate split after that. We do it solely as a loss-leader. Our hope is that the performer is not always going to be online."

"So, once again, he or she can focus on what they does best, while we are providing them with a decade-plus business model plug-in that's going to work flawlessly," Clayman adds.

The company firmly believes that in a tough economy, products such as Members Only Shows prove their commitment to the future not only of Video Secrets but also of the industry as a healthy whole.

"I'll bet my life there are no other companies in the industry that do things they way we do them," Clayman said, ever the passionate advocate. "It all comes back to the long view, to making the commitment to the future of technology through your employees. One thing I can definitely say is that this company is not afraid to invest in our people and our future. As long as we stick to that philosophy, we will continue to provide increased value to our three core constituents — our customers, our affiliates and our performers."

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