But owing to their perfectionism, it was not an easy move. First they signed a contract with DivX Labs, which provides tools for online video encoding. That didn't work out.
"The download of a full movie and buying of a full movie wasn't the business model that I thought would work," remembers Platinum Dan. "We continued to look at other technologies."
Next came a brief flirtation with ObjectCube, which developed the technology that AEBN now uses as the top VOD provider online, but those negotiations stalled.
"We decided it wasn't a fit for us either," Dan says.
So the brothers came to an obvious conclusion: if you want it done right, do it yourself.
"I'm a believer in development," Dan claims, "so at that point we decided that if we wanted to become leaders in this market, we'd have to develop our own technology. So we hired a bunch of programmers and spent a year in development. Those programmers basically had one overriding instruction: We want to be better than all our competition."
Rankings Are Up
And now, one year after debuting at Internext, the Adult Rental VOD website that Dan, Dave and their programmers created is an industry phenomenon.
"It's been a success," chimes Dan. "Our Alexa [Internet] rankings have climbed quite well. In a branded site, everything is about recurrence, and we have a lot of recurring customers. We're still losing a lot of money on the technology, but I want to have the best product out there. Last summer our competitors started playing with one-meg streams and two-meg streams, so we decided to exceed both of those and offer every single movie at every single speed. Right now our high-definition speed is at two megabits per second, which is near DVD quality. The cost comes in the technology and encoding, but we are putting everything into this product to make it the best."
Adult Rental is offering much more than glossy video quality to its viewers, however. The company's daring approach to billing has customers telling them that they'll never rent at a video store again.
"If you rent something at a video store, sometimes you take it home, watch a little and decide it's not for you," Dan explains. "But you paid the full rental price. With us, you can scroll to wherever you want in the video, and if you only watch five seconds and stop, all you pay for is five seconds. It's per-second billing."
One of the chief draws of Adult Rental is its enormous video library, which is growing by the incredible rate of more than 3,000 titles per month. The company's encoding department has to operate 24 hours a day, seven days a week to account for all the new titles Adult Rental offers every month.
"We have a full-time staff that goes out to find new studios and sign contracts," Dan reveals. "The studios get a royalty for every single minute that's watched. Our software tracks it, and the studios can log in and see movies watched minute by minute. We pay them a commission on the revenue we get from our customers. They send us all their movies, we encode them and put them up."
Right now, the chief competitors of Adult Rental are AEBN and HotMovies, but the new company is rapidly gaining ground on the leaders, thanks to some customer-friendly perks.
"We give people 15 minutes free, so they can check out the site," Dan says. "Our proprietary fraud technology allows us to prevent abuse of that free 15 minutes. So we give customers a full taste. Then every trade show we attend, we give out 30-minute cards, so customers can watch anything they want with full functionality. When the time runs out, they can fund their account to however many minutes they want. If they want to buy a full $50 package, it works out to just eight cents a minute."
Adult Rental is in the process of adopting just about every payment process under the sun. Aside from taking the usual credit card route, the firm also uses Euro debits, 1-900 phone payments, and even good old mail-in checks. Currently, Dan and Dave also are implementing Short Message Service (SMS) payment by mobile phone.
"With VOD product," Dan explains, "because it's a one-time billing with no automatic recurring, we're basically sourcing out every single different payment method possible."
What's on the Site?
A trip to the Adult Rental site shows that it's much more than just a video rental platform. Customers immediately see an e-zine, which is updated weekly. Its features include interviews, feature articles and biographies of adult performers (Allysin Chaynes, Jasmine Byrne and Ariana Jollee were highlighted at press time), news, video reviews, company profiles, and a section on quirky facts. For instance, did you know that Cleopatra made her own diaphragm from "camel poop"? Or that the cure for impotence in ancient Babylon was to eat the heart of a male partridge? The site also offers a "joke of the week" with items like "Top 10 things not to say on your anniversary," such as, "Today is our what?"
"The model is really about customer satisfaction, and our initial-to-recurring ratio [of customers] has been growing at a steady rate for the past year," Dan reveals. "With the selection and the pure quality of the feed, customers have been telling us it's just fabulous."
Dan and brother Dave have big plans for the future of Adult Rental, and their ultimate goal is no less than to become the most complete adult video library in the world.
"I seriously want every single movie on the planet under our umbrella," Dan says. "First, we're going after all the English titles. Then we're going after all the foreign language titles. It really will be a one-stop shop.
"We shortly will be releasing iPod. We'll be doing full clips for sale on iPod, and that should probably begin this spring. We're also adding Flash [player], so if anybody has issues with Windows Media, they can use Flash as well. We're going to give the consumer all of the options.
"When computer connection speeds increase, we'll go to a three-meg or four-meg stream. When the convergence of the computer and the TV materializes — probably in the next two to five years — that is when our brand will really shine."