opinion

A Business Slowdown?

Stephen Yagielowicz
Recently, XBIZ World magazine asked several industry players, "Is the industry experiencing a downturn or is it mostly perception?"

Here's what they had to say:

Provided there isn't a huge economic downturn that I'm unaware of, I'd venture to say that it is mostly a perception that industry-wide revenue is down. While revenue is down in certain areas, it is up in others. Brick-and-mortars are probably feeling the biggest hit, and studios reluctant to change with the times seem to be folding or joining forces with other, stronger studios and distro companies. Meanwhile, other studios and companies seem to be benefiting from newer concepts like online rental and VOD. This is the future, and our modes of delivery are undergoing changes far more dramatic than the film-to-VHS-to-DVD shift.
— Justin Brand, Content Manager, SugarDVD.com

I think it's perception – industry- wide there is more competition, more content delivery methods and more means of revenue. The industry has been and will continue to grow. Always adapting to change and innovation is most important, however supporting the growth of free content distribution (torrent sites, tube sites, etc.) is probably not the best direction. While it can be great for branding and reaching a wide market, with the fast-growing amount of free content available it comes to a point where we've got to stop and think about the old saying, "Why buy the cow when you get the milk for free?"
— Monica, Affiliate Manager, HotMovies.com

I see a lot of changes happening within the market. I don't see a downturn. The DVD market is shrinking, but the online market is expanding. There are new players and new money entering some areas of the market, while several mainstream segments have reached saturation. The whole industry seems to be in flux right now.
— John Sander, Director of Marketing, Kink.com

I believe that is the perception, although I also believe it is wrong! There is the same number of surfers out there and while the economy may have a little negative impact on spending, there are still more and more users coming on. What you are seeing, however, is more sites, more new products and more competition. So if the webmaster isn't constantly upgrading their sites, and adding in more fresh and unique content, then the surfer has too many other places to go. I wonder if a lot of webmasters forget the No. 1 rule: It is easier and less expensive to sell to your current members than it is to get new ones.
— Craig Tant, Marketing Director, MooCash.com

I would definitely say that the industry is in a downturn in terms of industry-wide revenue. Affiliate software programs such as NATS make it simple for anyone to open an affiliate program – but the tough part is making money with one. The key to running a successful affiliate program is to have a sound business plan and stick to it. You have to treat your affiliates well and provide them with quality sales tools and content and do everything you can to make your sites convert and retain. You also have to keep the members happy, as the competition is stiff and surfers have so many choices of places to spend their money – if they do spend anything, considering the glut of free porn and torrent sites available these days.
— Greg Parsons, Owner, SlickCash

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