Adult Comes Full Circle

Stephen Yagielowicz

As an Internet porn evangelist, part of my job is to find the sunny side of online adult entertainment and to share it with you. After all, as the most common, widespread and culturally ubiquitous form of artistic expression, “erotica,” can’t be all bad. And when it is combined with the latest technological advances, it can be down-right entertaining.

This “entertainment factor” is what we’ll focus on in this month’s column because it seems that after a wild digital bump, the market for “adult  entertainment” is increasingly returning to its more traditional roots, where key profitability segments are similar to pre-Internet days, bringing “porn” full circle.

Among other places, this shift is evident on the trade show circuit, where the money now spent on the Internet side is a dwindling portion of the overall pie, while much of the attention today is being focused on traditional video, novelty and retail markets.

For example, in February, XBIZ will unleash its new Retail Expo & Conference, following the annual XBIZ LA conference and XBIZ Awards show — rounding out a week of adult industry networking, partying and information sharing. Backed by some of the biggest companies in the business, the XBIZ Retail Expo brings together the more traditional adult operators (brick-and-mortar merchants included) for a new level of opportunity — and will serve as a “relationship incubator” for professionals from the online arena seeking new contacts in the physical world. Combined, these three events illustrate the synergy of adult entertainment offerings and services in 2011, where it’s not just about servstephen’s ing one need, but about trying to serve all needs.

With this canvas to consider, how does online adult fit into the picture today?

The question isn’t as easy to answer as it appears and requires a level of historical context to better understand.

Think of a pendulum swinging to the left and to the right. Before the Internet, the pendulum was fully to the left; where porn was the province of video producers, phone sex operators, adult theatres and book stores, magazine publishers and toy purveyors — those merchants offering physical goods or a tangible, “theatre-style” experience. While beyond our scope, that “theatre experience” could be extended to gentlemen’s clubs and other services that provide “adult entertainment,” but we’ll focus on adult media, rather than “personal” services.

Looking at these market segments, they all surrounded either actual physical pleasure (i.e. “novelties”), or visual, written and audio depictions of erotic material. These are items that are in demand and have real value, but the Internet changed much of the math, as it swung the pendulum all the way to the right, where the words “Internet” and “porn” became synonymous.

Now that the fad of online access has faded into history — and with it, much of the overzealous hype that led to the “Internet bubble burst” which is now a decade behind us — we can take a more measured view of the Internet as simply a distribution mechanism that is exceedingly well-suited to digital media; as well as being a marketing tool that can often level the playing field between mismatched competitors.

It’s quite understandable that the earliest years of online adult entertainment were characterized by a very “us vs. them” attitude, where adult industry veterans saw legions of young, tech-savvy newcomers flooding onto the scene with their bright ideas — ideas that the old school quickly dismissed, much to their eventual loss — while next-gen adult webmasters viewed the traditional “video guys” as dinosaurs doomed to rapid extinction — and both groups were wrong about each other. Today, entertainment business models (adult or otherwise) are in a shambles as the cost-effectiveness of digital distribution and cultural proclivities have devalued digital media to the point where if it isn’t already free, it is largely avoided or ignored — until a pirate makes it available for free.

Despite this, content producers simply cannot go without the huge benefits of digital distribution, as evidenced by the near extinction of the print magazine and physical media (DVD, Blu-ray, etc.) markets, which illustrates the lack of available options.

It’s like getting a flu shot: it hurts, and kills some folks who do it, but it’s still smart…

Likewise, many of the “Internet guys” have found that their overaggressive marketing tactics, the pervasive “culture of free,” and a prolonged economic morass, have conspired to leave them with nothing of value to sell — even if they had buyers to pitch an offer to.

So what’s a pornographer to do? Well, for one thing, realize that we are all in the same business — and the same boat.

Taking one vignette from the big picture, content producers may be cost-competitive by focusing exclusively on direct digital distribution — going straight to the tube sites that many blame for the market’s decline. Companies with larger libraries may be able to support their own large tube sites, using innovative monetization schemes to drive profits.

This is already happening today and I believe that it signals one of the future’s trends, where content marketers will control as much of their production and distribution chains as is possible. Of course, there will always be aggregators, but exercising self-control will be an increasingly huge element of success — especially as vendor trust levels decline.

It is the old “cut out the middleman” strategy, which has long been profitable, even if in the adult world it brings further challenges to store owners, who must also evolve.

Boiling this all down, the Internet is a tool, not a product.

While a lot of the early webmasters may have come from a computer networking / technical background where “The Internet” actually was the product, today’s operators need to see it as being more akin to the Post Office, where it simply serves as an agent to inform prospects about your goods and services and to deliver them when you order.

It’s really about philosophy driving practice and having the ability to innovate, while working together to satisfy consumer demand.

This is where we are in 2011: it’s no longer a matter of “us or them,” as there is only “us,” the adult entertainment industry, left — and the survivors must embrace a more comprehensive outlook of what the business is and does — even down to the individual operator level.

While this article is indeed rough-hewn lumber and not a finely polished panel, I hope that my central thinking has come across; that at a fundamental level, adult today is not much different than adult prior to the Internet — it’s just that today, we have a new tool.

Use it wisely and see what you can build.