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Q&A With Andrew Conru of FriendFinder Networks

Rhett Pardon

FriendFinder Networks founder Andrew Conru is firmly planted in the driver's seat leading the social entertainment giant and Penthouse brands.

Conru took over the reigns as CEO in January after the company filed a plan of reorganization and key execs stepped aside. The plan, once implemented, was designed to strengthen the company's balance sheet and enable FriendFinder Networks to grow its flagship brands.

Two obvious trends have been people's increasing use of mobile devices to connect and the growth of instant hookup culture. The market seems to have fragmented into a wider range of specific user needs. It’s our goal to accommodate these shifts.

With the reorganization, control of the company went to Conru and Lars Mapstead, two note-holders who sold their diverse group of social networking websites in 2007 to the company that operated Penthouse and other adult entertainment-oriented properties.

It's been more than six months since the changing of the guard at FriendFinder Networks, and XBIZ World wanted to find out to see how things are going, as well as where the company is headed, in this exclusive interview.

XBIZ: It's a new start for FriendFinder Networks after the company's reorganization. What needed to be fixed?

CONRU: Teamwork and quality. When I returned last December, I found that the company had split its marketing and development teams into individual silos — each working on their own dating sites according to their own priorities. This almost halved the productivity of the teams as each had to recreate the other's efforts. We immediately reduced the number of silos from seven to two and used the extra capacity to focus on product quality. In the last five months alone, we’ve made over 1,000 design and product improvements with the goal of improved conversions and member experience. As conversion and member experience are fundamental for growth, we worked on those improvements first.

XBIZ: How did you get involved in the industry?

CONRU: I started the first online dating site in 1994 which eventually was the source of FriendFinder.com. While the intention for FriendFinder was to enable people to meet new friends for all types of mainstream purposes, it quickly became clear that some people wanted to hookup when they started uploading their nude photos.

I decided to build a separate site for them called AdultFriendFinder and within a year, we had about a dozen niche dating sites and one of the first affiliate programs.

XBIZ: What are some of the new online dating trends you've seen in the past few years?

CONRU: Two obvious trends have been people's increasing use of mobile devices to connect and the growth of instant hookup culture. The market seems to have fragmented into a wider range of specific user needs. It’s our goal to accommodate these shifts.

XBIZ: What's in store for FriendFinder, particularly Adult FriendFinder, in the coming year?

CONRU: One of the benefits of consolidating our development silos is that we have been able to standardize our software across our 15-plus different dating verticals — reusing the best features of each for all. I’ve always viewed the sites as sharing a similar mission, so new features on Adult FriendFinder will also roll out on ALT.com, OutPersonals.com, FriendFinder.com and others. Now that our initial site cleanups are nearing completion, we will be rolling out a series of products that we hope will improve value for members and affiliates alike.

XBIZ: What sector of the online adult business is driving the market these days?

CONRU: Business is most often driven by the needs of customers. Obviously, customers want to have access to everything on their mobile devices — this is the same for the adult market. The challenge now is to provide a similarly robust experience on mobile as desktop.

XBIZ: Do you have any concerns for the health of the adult entertainment industry?

CONRU: It is easy to be doom and gloom about the adult entertainment industry. Obviously, the rise of free tube sites removed the need to pay for anything but niche adult content. The consolidation of the tube sites further reduced the need to produce as much original mainstream content. As most of the income to tube sites come from cams and adult dating sites, the content industry is vicariously threatened by the health of those sites.

The adult dating market has been impacted by evolving societal attitudes of hooking up. Mainstream dating sites are increasingly used by younger people for both dating and short-term hookups. We are evolving our adult dating products to reflect these demographic changes. We are also seeing the cams market change. Models are making themselves into brands and building relationships directly with their best fans using social media. For example, Cams.com now features some Penthouse models who bring their own source of traffic.

Some future concerns include the vicious circle of decreased access for adult advertising on mainstream sites, like Google, once it becomes a smaller percentage of their income. At some point, mainstream sites have an incentive to forgo adult advertisers as it gives lift to their mainstream ad rates. We already see this in both Apple and Google’s ban of adult-related mobile apps.

While the adult entertainment industry as we know it today has passed its prime, there are still opportunities for growth. There are literally thousands of people thinking about new ways to create and deliver value to adults. I expect to see innovation continue.

XBIZ: With the difficulties in California over county and Cal/OSHA rules, does Penthouse continue to film productions in Southern California or has it moved on?

CONRU: Because of our strong European and Latin American Broadcast operations, we are licensing content localized to the market. We are also increasing our European productions and are producing 5 movies in Europe in June.

XBIZ: And what is the final word on Penthouse magazine? Are you keeping it around in the U.S.?

CONRU: Penthouse magazine will celebrate its 50th anniversary in March 2015. We are changing both the look and the voice of the magazine this year. Additionally, we’re seeing growth in our digital publishing as we move quickly to launch new products for tablet and mobile devices. We’re not blind to the decline in print publishing, but through smart cost containment and efficiencies in our production process we’ll continue to cut costs to make this product viable.

XBIZ: What’s a typical work day like?

CONRU: One of the concerns I had going back to FriendFinder Networks was how to not repeat the work-life mistakes that led me to burn out in 2007. I used to work 70-plus hours a week and was directly involved in coding, product design, marketing and operations. Now, I try to work more strategically. I spend about half my time marking up designs for new functionality and improvements to current products and the other half working directly with other executives.

XBIZ: When not thinking about the biz, what do you like to do?

CONRU: I live a pretty simple life. I enjoy getting outdoors, some travel, and constantly learning. I’ve been getting involved in a number of nonprofit groups especially those focused on long-term environmental and societal issues. I’m particularly interested in what we can do today to lessen the impact of environmental degradation and future petroleum shortages.

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