Friday, Jan 30, 2009    Text size: 

Some of the top professionals in the adult industry weighed in on the topic with XBIZ, including SugarDVD CEO Jax Smith.

“We added a pay-per-minute VOD service to our site about two years ago, and then two months ago, we added flat-price streaming on our website, which allows people to buy an entire movie for a fixed price,” Smith told XBIZ. “I don’t feel like VOD has cannibalized our rental service. With DVD rentals, we saw a flattening out in the last quarter. But VOD has made up for the decrease, so we were happy we added VOD when we did.”

WantedList, a rental website based in Van Nuys, Calif., also features a VOD service in addition to its DVD rentals.

“We’ve never seen our site as just a DVD rental service,” WantedList founder Anh Tran told XBIZ. “When we started rentals were our primary business, but we always knew that the physical disc would be eliminated by other delivery methods.”

Bill Treadway, president of newly launched distributor TriadReleasing, agreed.

“Electronic delivery is going to be the method of the future," he said. "As a man, I understand the need for instant gratification, and it’s just so easy to go online and be able to choose from hundreds of different genres of anything that you’re into. It’s anonymous, it’s quick and it satisfies needs right away. There’s not a physical DVD that you have to hide from the wife and kids.”

Treadway added that TriadReleasing plans to offer all methods of content delivery, including both DVDs and VOD services.

“I know there’s been an industrywide drop in DVD sales, and I think people like to blame the fall in DVD sales on something,” Treadway said, “but I don’t think it can be completely blamed on Internet VOD.”

Smith said SugarDVD, based in Chatsworth, Calif., has actually seen several benefits, including a slight growth in sales, because of its VOD service.

“VOD seems to have helped the site with the extra ads we’re running on VOD,” Smith said. “We’re running two ads for the same movie — one ad for VOD and one ad for DVD — so we’ve gotten more exposure. We’re seeing an overall increase in traffic. And VOD covers the cost of ads, so we’re able to have more ads without spending more money per se.”

Smith, Tran and Treadway each say they don’t consider the increasing popularity of movie streaming and VOD an immediate threat for the adult industry.

“I do think that over time, you’re going to have better ways to deliver content, and naturally, people are going to gravitate to those superior ways,” Smith said. “But VOD is in some ways not superior to DVDs by mail right now. However, VOD could make some improvements over the next five or six years. We still have plenty of people renting by mail right now, though. There is a huge number of people who are still not renting movies online yet, so I always try to remember that many people are slow to adopt new technology.”

Tran said the online trend is “just part of the natural evolution of business. As our customers get more used to watching movies online, they’ll start using one service more than the other. However, what’s important is that they’re still our customers. I guess the answer is that if a company looks at its delivery method as evolving, then one doesn’t really effect the other.”

With an increasing number of companies, including mainstream giants Netflix and Blockbuster, offering downloads and streaming plans, it seems that “electronic delivery is not going anywhere,” Treadway said. “I think it’s going to continue to grow. And as a businessman, I think it needs to be embraced rather than resisted.”