The State of Online Adult

Stephen Yagielowicz
With the rapid evolution of the adult entertainment business, it makes sense to take a close look at your business and marketing plan at least every six months to ensure that your company is on track — maximizing opportunities and profits, while mitigating any potential shortcomings or threats to your operational environment. To assist this process, we are going to take a brief overview of the mid-year landscape and examine some of its hot-button issues, greatest opportunities and the six months ahead.

Politics and perversion. This month’s Trend Watch column looks at the escalation and changing nature of attacks on adult entertainment, and a few more examples are fitting here. Such as the case of the economy and its recent turmoil — which is now blamed in part on the illicit porn viewing habits of overseers at the Securities and Exchange Commission.

Yes, the global economy collapsed because of porn on the Internet.

Now, the catastrophic gulf oil leak is being partly blamed on a lack of oversight by Inspectors from the Minerals Management Service — who were reportedly distracted by consuming crystal methamphetamine and viewing pornography on government issued computers during working hours.

Yes, the greatest natural disaster in U.S. history happened because of Internet porn — and no doubt, a few corporate attorneys may try to highlight this insidious connection, rather than see their clients pay up their fair share of damages.

Regardless of the tenuous nature of some of these claims, the underlying lesson is that adult entertainment still poses a range of challenges in the arena of public perception, which is certainly a major concern for publicly traded companies — regardless of the motivations behind the shaping of these perceptions. For example, a shell group funded by oil company interests “pointing the finger” at “the porn guys” and thus keeping media attention focused away from its clients with this juicier gossip.

How does the adult industry fight such a thing, when it is the victim of external and high profile manipulation?

Certainly, the moral free-for-all that some hoped would accompany the arrival of the Obama administration has not materialized — indeed, quite the antithesis seems to be on the upswing. It is a situation where you have both the true believers and the unemployed busily blogging away as wannabe “political activists.” Loafers, layabouts and busybodies poking their noses in where they don’t belong — and stirring up trouble with their public demonstrations, making things uncomfortable for politicians — and for the principals and directors of corporations that may or may not have their fingers in the porn pie.

This includes one important corporation that is very familiar to online adult operators: the Internet Corporation for Assigned Names and Numbers, more commonly known as ICANN.

Vexations over Visa. Then there is Visa and the entire online billing arena, continuing to cause chaos where the rubber meets the road. As high profile institutions are distancing themselves from the high-risk processing space, and profitable business practices such as unrestricted cross sales curtailed, affected operators need vigilant monitoring of the building blocks of their revenue streams, obtaining redundant banking relationships and backup processors — something that is proving increasingly difficult.

While some claim that Visa’s moves on cross sales amount to little more than the restatement of existing policy, others are working around the restrictions by deepening and internalizing their networks — cross selling to themselves rather than to third parties.

One important factor in all of this is that these actions, and others underway, are the results of ongoing investigations — some of which target high profile adult operators, others with only tangential relationships to adult, courtesy of those companies involved along the international money trail. Regardless of the initial cause of the investigation, however, many folks’ finances are being closely looked at whether they realize it or not — coping with this then is a major concern when properly structuring your organization, as some adult operators are finding out too late.

The near future. The world of adult entertainment is complex and challenging, with many obstacles to overcome and many opportunities for those who can persevere. New platforms will offer new opportunities but will also raise new objections, making adult an ongoing balancing act that is ever harder to master.

As the economy shows signs of a continued but cautious recovery, adult now heads into its traditional “summer slow down” period, perhaps minimizing any potential uptick — but laying the seeds for what could be a robust showing in the fall and through to the coming year.


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