Future of Online Adult: 1

John Scura
The list of new technologies is boggling: Internet-ready televisions, the WiMax system for wireless Internet access, the Sony PS3 for direct movie downloads, the G3 system on mobile for rapid movie downloads, increased bandwidth, TiVo downloading, Microsoft's Vista, video chat interactivity on cellphones and the metamorphosis of the cellphone into a multimedia broadcast system.

What will these impending technological breakthroughs change in the arena of adult content distribution? Only everything.

It's clear that between now and 2010, the entire landscape of media will undergo a tremendous sea change, and with that, so will adult distribution. The harbingers of this change are already here.

"Right now," Jay Janarthanan, chief technology officer for Object Cube, says: "There are televisions coming out, especially in Korea, with an Internet connection in the back. These are Internet-ready televisions that can bypass the cable company and go directly to whatever sites you want. Last month, Apple announced a new product called Media Connectors that basically bridges the gap between your PC and your TV."

At the same time, new systems in the mobile field are changing the very nature of the cellphone.

"We've already got TV channels running," Adi McAbian, managing director of mobile company Waat Media, says. "We've also got people dialing in video calls to talk to girls in chatrooms. Obviously, we'll be building more interactivity on the mobile side, so whether it's a TV channel delivered to your handset or a button function for interactivity, we'll probably be deploying those by the end of the year."

And of course, there's the inevitable increase of speed and bandwidth on the Internet, which will have all sorts of repercussions in adult distribution.

"As bandwidth becomes more available," Steven Daris, managing partner of Red Apple Media, points out, "more and more companies will want to sell their videos through online distribution. The quality will be increased, and the familiarity with the user will be increased. So we will see more people using online media versus going out to their adult bookstore and buying the actual DVD or VHS tape.

"The next step in this evolution will be to allow consumers to burn a DVD on their system and still have it protected. Once bandwidth increases, people will only have to go to their computers, press a button and within minutes, they'll be able to pull out a DVD and play it in their DVD machine at home — and it will be the same quality as a DVD bought in a store."

Future of Adult
Sounds exciting, even revolutionary, right? But all revolutions have their victims, and it's already becoming clear who will fall by the wayside when these new technologies are implemented.

"This is still a couple of years away," Janarthanan predicts, "but the writing is on the wall for the cable companies. They made most of their money selling content because cable companies make more money off selling porn than anything else. That's going to end. It will be interesting to see how the market changes in the next few years as those companies lose control."

In most homes, cable companies supply Internet access through a modem, and they don't have great interest in affording consumers a high-speed Internet connection that they can use to bypass their services to watch a movie. But that's changing. New technologies like WiMax, which allows wireless Internet access, will be going directly to the modem in many homes. Also, cable companies are getting competition from the phone companies now, which offer DSL, and from the new fiber-to-home that Verizon has.

"Cable companies have acted like traffic cops where, if you want them to offer your movie to users, you have to pay them extra," Janarthanan says. "If you don't pay them, the service will be bad. But when Internet-ready television arrives, people are going to bypass the cable companies to access content, especially adult content."

Joone, founder and director of Digital Playground, has experienced this inequity at the hands of the cable carriers, and agrees that the future of cable is bleak, which is just peachy with him.

"It's ridiculous what has happened there," he says of cable's adult content policies. "I think the end is going to come up and bite them on the ass."

And the cable carriers won't be the only entities left behind in the high-tech turmoil.

"This bypasses everyone in the middle," Janarthanan says of the impending technologies. "It won't be an overnight thing, but eventually the retail business in adult will disappear. All the offline distribution of porn will decline and even the online sales of DVDs. Already you're seeing the sites that sell DVDs online have been losing sales every month. Very soon it will resemble what's happening right now in music, where bands release new albums directly to the Internet. That's going to happen in adult as more and more studios do a direct-to-Internet release of their titles."

In part two, we'll look at changing market needs and more.

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