Noting the surging sales of interracial titles such as "Black Bros & White Ho's," Jon Blitt, general manager of the Canadian production company Doghouse Digital and an industry veteran who knows better than to pry into audience members' individual lives, can only shrug.
"The black market is huge in the states now," Blitt says. "I have no idea where it came from and to be honest with you, I don't know if it has peaked yet. I just know they sell better than anybody else."
That's one reason why, rather than pile ignorance on top of ignorance, Blitt last December decided to partner up with Braincash, a Montreal neighbor. A full year later, Blitt reports the impressive performance of exotic spin-offs such as ILoveItBlack.com and GirlyGangbang.com, a lesbian-themed site that is already outperforming its DVD counterpart in terms of revenue.
"It's the perfect fit," Blitt says of the company's 50/50 revshare partnership. "I supply the content, they supply the technology, and away we go."
Founded in 2003, Braincash is one of a growing number of companies looking to take the guesswork out of Internet brand management. If company founder Frederic Valiquette has a special affinity for guiding his content partners through the web maze, maybe that's because Valiquette himself backed into the current business model almost by accident way back in 1998.
"We mostly started the company by registering domain names for fun, just thinking about making a profit reselling them in the future," Valiquette says.
Such prospecting was aided by the fact that, until 2000, domain registrants needed a Canadian corporation or trademark to scoop up associated domain names with the national .ca suffix. Moving fast, Valiquette created a company called Sexeweb Inc. ("sexe" being the French translation "sex"). This set up the registration of sexe.ca, a web address that soon gave the company a primary position in the French-Canadian adult Internet free-for-all.
The subsequent deregulation of the Canadian Internet allowed Valiquette to acquire another 40 "good and not so good" domain names. In the midst of waiting for buyers, however, Valiquette decided to put Sexe.web and a few of the more prominent domains to work.
Valiquette, whose previous business adventures included ownership of a recording studio, turned to his numerous contacts within the Montreal music and entertainment scene to supply the sites with adult content. Although a 2001 attempt to sign up more content at Internext bombed, a 2002 chance encounter with Peter North landed Valiquette his first major brand partnership.
Rebuilding The Company
Since then, Valiquette has worked to rebuild the company around branded content. In addition to North, the company has also signed up Lexington Steele, giving the company a stake in two prominent male stars as well as the blooming interracial niche. While much attention has been focused on the popularity of the latter, Valiquette sees the former, male porn star marketing, as an undervalued, under-exploited opportunity.
"The business model is totally different than with a female porn star site," he says, noting that most major stars like North and Steele have to branch out into directing and production just to keep pace with their female counterparts' onscreen earning power.
"On a female porn star site, the traffic is mostly focused on the main character," he says. "Male porn star sites differ since they offer content from various female porn stars, so the potential for traffic is way higher."
With both North and Steele on the roster, Braincash has looked to boost its reputation as a both a brand builder and a niche marketing specialist. The company currently boasts eight single girl sites, most of which are built around Canadian newcomers Last year, the company signed a partnership deal with DVSX, a Chatsworth, Calif.- based company known for its "Gothsend" DVD series. Under the deal, Braincash has rolled out three hardcore sites, including the double penetration-themed OnlyDP.com.
"We make and distribute our own videos," DVSX co-owner Alex Ladd says. "Sales are good, and we were looking to expand and get more of a web presence."
Like Digital Doghouse's Blitt, Ladd says the Internet has both its upside and its downside. The upside is a near-frictionless delivery mechanism and a two-year jump on future delivery formats such as high-definition video. The chief downside, however, is the increased technological and marketing complexity. For companies battling for survival in a saturated marketplace, pushing your way up the Internet learning curve is a major hassle. It wasn't until Ladd noticed Braincash's complementary melding of DVD and online content, however, that Ladd saw an option that didn't force DVSX to take on the bulk of the failure risk or sacrifice a bulk of the revenue opportunity.
"It all makes sense now in hindsight, but for many years we were running alongside each other," Ladd says, noting the parallel evolution of the two young companies. "Finally, somebody said, 'Hey, wait a minute. We're not competing with each other. We're talking about two totally separate revenue streams.' At that point, it was a no-brainer."
The two companies' strict division of labor works well. DVSX is currently generating secondary revenue on more than 60,000 static images, byproducts of film production that, until this year, had been sitting idle in the company's media library.
Braincash, meanwhile, has been using the DVSX galleries and the promise of standardized NATS-based traffic accounting to lure in linking webmasters and other production companies eager to tap into the brand.
Valiquette points to BangBus.com, a reality-themed gonzo website that is currently selling feature-length DVD and VHS versions of its online content as an early example of cross-media franchises starting on the Internet and moving into traditional distribution channels.
"People who didn't have access to the Internet heard about [BangBus] and when they saw the title at their local video club, they were curious enough to take the DVD and bring it home," Valiquette says.
"Basically, it just shows that the better your brand, the better your sales. That's what Braincash is all about. Big brands that convert."