XBIZ 360° Panels Take Look at Future of Technology, Distribution

Rhett Pardon

LOS ANGELES — The future of digital adult entertainment was discussed by top industry execs during Friday's XBIZ 360°'s Digital Media Conference.

Two seminars on the final day of education at XBIZ 360° at the Sofitel Hotel in Los Angeles provided guidance on where the industry is going — both in the online and traditional video-making businesses.

Friday's slate of XBIZ 360° seminars, as with all of the seminar events of the past several days, also took aim and explored old and new techniques to get ahead.

Participants looking at the future of the digital space included Video Secrets' Greg Clayman, LFP's Michael Klein, ATK Kingdom's Kim Nielsen,  Utherverse's Brian Shuster, PartnerCash's Christoph Pass and Douglas Richter of Bright Guys, which consults with AWEmpire.

XBIZ's Alec Helmy, who moderated the first-hour seminar looking at the digital business' future, peppered each of the panelists on where their businesses are headed when it comes to finding more business from end users through technology. He also asked, what's the next big thing for the viewing of pornography?

Michael Klein, president of LFP, said that the "future of growth" for his company's brands include IPTV and Smart TV initiatives, but moving porn products in a mainstream world is rather tricky.

"We do have some deals with some Internet-TV manufacturers where you will find a Hustler or New Frontier Media app," Klein said. "But the problem is that you have to find it. They like the revenue but they are not going to tell their customers that they've got a Hustler app."

Richter said the next big thing for viewing adult content will be technology like Google glasses, and that live cam action is perfect for it.

"Your smartphones will soon be obsolete," he said. "The future of viewing content will be in glasses, or even closer to your brain."

A second panel — comprising HotHouse Entertainment's Stephen Scarborough, Wasteland's Colin Rowntree, Bob Christiansen of Adam and Eve, Jules Jordan of Jules Jordon Productions, Hustler's Drew Rosenfeld and Richter — looked at the traditional video-making businesses that include DVD, broadcasting and IPTV.

Moderator Kelly Holland of Penthouse asked panelists how they are coping with a changing business environment and, with that, new content distribution practices.

"We have seen a decline in sales in the past few years," Scarborough said. "We had to bring around better business practices. You could make a lot of money in this biz in the past whether you are good or not. It used to be that you could throw mud on the wall ... some stuck.

"But we have had to look closely at the revenue," he said. "We remain true to our mission statement with high quality, but things are different now. Everything behind the scenes has changed. The budgets and staff are a fraction of what they used to be, we are straight to web in 30 days. We have had to reinvent ourselves."

Seminars on traffic and banking kicked off the day's education schedule after attendees had a chance to meet other industry peeps through speed networking in the morning.

"Billing Adult Entertainment: Top Advances in E-Payment Processing" brought together the industry's top processing experts to discuss the latest trends and techniques for traditional, alternative and mobile payment options.

The session included discussion from NETbilling's Mitch Farber, PAY4's Sascha Winkler, CCBill's Gary Jackson,  Epoch's Harmik Gharapetian, Bjorn Skarlen of CommerceGate, Signature Card's Aaron Slominski and Orbital Pay's Karen Campbell. Mike of Actually Helping moderated the seminar.

One of the biggest challenges in the business, panelists echoed, is the commercial behavior of affiliates.

"If you don't know who your affiliates are, you are playing with your business," Slominski said. "You might make a lot of money with them, and they may make a ton of money. But let me tell you, the fines are no joke. Mastercard is taking an active and aggressive stance. They are looking at all new sites, they are coming to audit shops randomly.

"You need to know your affiliates and you know where that traffic is coming from," he said. "In one example, I can tell you I had one merchant who was doing $10,000 in business, but now he was facing a $280,000 fine.

"Fact is, if you don't pay the fine, you don't process," he said.

Other topics at the billing seminar included how to choose a processor, upselling, retaining the customer and how to make more money.

XBIZ 360°'s legal seminar, titled "Beyond DMCA: The Fight Against Adult Entertainment Piracy," took a look at what companies are trying to do as piracy continues to ravage revenue industrywide.  

The panel focused on the importance of protecting your content through copyrights, failures of the Digital Millennium Copyright Act to solve the problem of file sharing, porn piracy litigation and other copyright issues. Speakers included attorneys J.D. Obenberger and Gill Sperlein, as well as Nate Glass of TakeDownPiracy and Dominic Ford of Porn Guardian. Allison Vivas of Pink Visual moderated the seminar.

Obenberger said that he's feeling "incredible frustration" for his clients, particularly the small-time webmasters, because they can't control the illegal republication of their content and civil litigation may be unaffordable.

"What troubles me are the people in the middle," Obenberger said. "There is no effective remedy that is affordable to the typical webmaster. Individual people are being destroyed."

Glass and Ford, however, noted that their organizations — TakeDownPiracy and Porn Guardian — are important cogs in the process of taking down pirated content and that the data can eventually be used for civil litigation. Both firms send out DMCA take-down notices over infringed content, whether the intellectual property has a copyright or not.

"You might as well take some action through DMCA take-down notices, otherwise you are licensing your content for free," Glass said.

Sperlein agreed. "People that properly license there content and send out DMCA notice see their piracy go down and revenue go up," he said.

In the seminar, panelists navigated the process for copyright registration and timelines, with Obenberger emphasizing how valuable a copyright is — and a bargain at $35 for each filing.

As for end-user porn piracy litigation, Sperlein said that the adult industry should become more vocal about the issue, particularly on a number of blogs that take a pro-piracy stance.

He said that even despite a contingent of non-adult industry attorneys filing mass cases are making the industry look bad, the business needs to rally around the antipiracy spirit.

"Explain the truth behind this — educate and be vocal about the issues because judges and their clerks read the blogs, and typically judges have a very anti-adult copyright stance," Sperlein said. "There are real jobs at stake, and they need to know that. These cases aren't about shaking people down, there about stopping a source that really is bleeding the industry."

In another seminar, Crak Revenue's Axel, ExoClick's Geoffrey Bonchiere, JT of PornTube and  Judy of EroAdvertising discussed traffic trends in a session called "Scaling Adult Websites: Traffic Acquisition in the ‘Tube’ Era," moderated by XBIZ's Stephen Yagielowicz.

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