opinion

A Look at the Evolution of the Mobile Adult Internet

Stephen Yagielowicz

As we approach a decade of (usable) mobile Internet access, it is worthwhile to explore the history of this dynamic adult entertainment market segment, as well as its current and future profit potential. Christian Kreul of Visit-X and VX|Cash (www.vxcash.net) has a long history on the mobile Internet, dating back to 2005, long before the explosion of Smartphones, apps and tablets. He explains that while phone calls and plain text messages were the killer apps back in the early days, today, eight years later, the mobile Internet has come out of its infancy and is here to stay.

“I remember back in those days when I have traveled to trade shows and people were looking at me like I was coming from another planet,” Kreul told XBIZ. “They were not able to believe that people were browsing the Internet on a mobile phone. However, this is now history.”

I’ve heard many companies saying that they can generate more money with mobile programs but they do not have any control [over] the content nor over the way in which their customers are treated, so they accept the fact they will generate less money, rather than damage their brand.

Kreul reflected on his vast experience, including his attendance, participation in and moderation of many mobile panels over the years; noting that as time progressed, the audience at these elite sessions continued to grow — and is still growing today.

He recently shared with XBIZ some of the insights that he has gained during this process.

“I was in discussion with a cam webmaster (yes, webmasters still attend events) at a trade show back in January of this year, and we were talking about the speed networking session that was held earlier that day,” Kreul confided. “He said something like ‘Dude, all those people asking me for my mobile traffic. It is insane. I thought billing companies are annoying but they are even worse!’”

It was this seminal moment when Kreul realized that mobile has finally arrived in the adult industry, with a new microcosm developing for adult businesses in a short amount of time. Despite rapid growth, however, he has also concluded that not everyone is aware of the huge potential of the mobile arena.

Kreul told XBIZ that one popular topic is how to start in the adult mobile marketplace without incurring (or at least limiting) any financial risks.

“It makes sense to send your mobile traffic to one of the established mobile affiliate programs to get a feeling for your site’s mobile traffic and how well it converts,” Kreul advises. “After viewing the results [of these tests] you can start to work out your own mobile strategy.”

For those eyeing the launch of a mobile application, Kreul says it may not be necessary to do so.

“The majority of people do not think you need to have an app because of certain restrictions from the handset manufacturers, the financial efforts you have to undergo to develop an app, and finally, the maintenance of the app itself, once new mobile OS versions come out,” Kreul stated. “On the other side of the coin, a few adult companies are offering apps for Android devices and they are quite pleased with the results.”

Global mobile billing solutions also remain problematic, making mobile billing techniques one of the most discussed topics in 2013 — as it also has been in the years past.

Kreul says that while most mobile experts agree that when it comes to the question of mobile billing ever being available in the U.S., the easy answer is “No, never!” even though many markets in Europe have shown that they can tame the Wild West ways of mobile billing through regulation by governments and/or the mobile carriers.

“It doesn’t mean that you don’t generate any money there. It is just a little bit more complicated than it was before as you have to clearly communicate how much you are going to charge,” Kreul offers. “The days of 1:10 conversion ratios are definitely over in certain countries, but are conversion ratios of 1:100 or 1:200 that bad at all? I do not think so.”

Kreul says that the emerging markets in Latin America, Africa and Asia are the new top conversion generators for adult mobile revenues.

“Sure, there are slower payouts compared to the developed markets, but the number of transactions are amazing,” Kreul told XBIZ. “In those markets, the mobile phone is the only gateway to the Internet due to the lack of wired broadband infrastructure or even PCs.”

Another emerging trend is that many adult companies are now working directly with mobile billing companies rather than sending their traffic to mobile affiliate or advertising programs.

“Even if it means more work due to integration, testing, being compliant and a smaller amount of revenue, these companies are keeping control of their brand and how they treat the end consumer,” Kreul told XBIZ.

“I’ve heard many companies saying that they can generate more money with mobile programs but they do not have any control [over] the content nor over the way in which their customers are treated,” Kreul notes. “So they accept the fact they will generate less money, rather than damage their brand.”

He explained why sometimes, less money is more.

“Usually you will generate more money if you keep another partner (the mobile affiliate program) out of the loop and work directly with the mobile billing companies. The percentage for you should be higher, right?” Kreul asks, stating that the payout percentage you would receive directly from the biller is indeed higher, but profitability may be less because you may not be in a position to do proper tests. “Every carrier has different rules and they tend to change these rules on a regular basis, so you will be completely dependent upon your mobile biller.”

This reliance on mobile billing companies may be understandable when they claim to charge mobile consumers in 60 countries or more, but Kreul says that having this basic capability is simply not enough.

“Yes, maybe they support 60 countries, but the conversion and user experience is so poor since they have the same problems as you have,” Kreul explains. “They are not based in each country to do proper testing or implementing new rules by the carriers in time, [while suggesting] they offer a mobile billing solution while in reality they offer SMS billing, which offers a terrible user experience. My advice is to talk to local mobile billing companies and ask them where they have offices, how they are testing and much more,” Kreul added. “It is not about the number of countries someone can charge users in; it’s about how professionally they can do it.”

Regarding one technology that many observers consider to be the future of personal computing, mobile or otherwise, Kreul has seemingly surprising outlook; telling XBIZ that he intentionally skipped the topic of tablets during his most recent mobile seminar panels, which has people asking him why he is not discussing these increasingly popular devices.

The reason for this is simple and supported by many of today’s mobile experts, he says:

“The mobile industry doesn’t consider tablets to be mobile devices,” Kreul said. “They recommend treating tablet users like desktop users.”

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