Cybernet Expo Seminars: Day 2

Stephen Yagielowicz
SAN FRANCISCO — Following up on the show's first day's seminars, the second day of the Cybernet Expo seminar series offered a varied assortment of perennial topics as well as a couple of unique offerings.

Ask An Attorney
First up was the legal panel moderated by YNOT's Connor Young, entitled "Ask An Attorney: Staying Smart, Staying Legal" and featuring veteran adult entertainment attorneys Greg Piccionelli of Piccionelli & Sarno; Eric Bernstein of Eric M. Bernstein & Associates; Michael Fattorosi of Fattorosi & Chisvin; and Jeffrey Douglas from the Free Speech Coalition.

Topics scheduled to be discussed included handling business disputes by working with contracts and establishing terms and conditions; complying with labor laws and federal record-keeping laws; risk analysis and "bullet-proofing your business in a dangerous environment."

One of the first issues to be addressed was the biggest misconceptions faced by new entrants to the industry.

"Everyone has the idea that they can just jump into the industry and make money," Fattorosi said. "I try to talk them out of starting a website because I don't want to see them gone already in six months," he commented while discussing his process of pre-qualifying potential clients to determine their level of seriousness.

"People have no clue that this is a business," Bernstein said. "They spend money before they know what they are doing."

The motivations of operators in seeking an attorney and the "legal preparations" they may have taken beforehand were also discussed.

"You don't go to a lawyer after you have a problem," Bernstein added. "You see one to prevent a problem."

"People see what everyone else is doing and try to duplicate it," Piccionelli added. "As a consequence, they internalize an incorrect vision of what the risks are."

"The industry is very dynamic and the current wave of operators are business people used to operating in a regulated environment," Douglas observed. "There are no rules, but there are laws, including obscenity, which is a law without definition."

"I always try to determine a client's risk-adversity," Fattorosi said. "I have to prepare clients for the reality that there are civil as well as criminal liabilities to being in this business."

Bernstein agreed. "I don't know if you can bulletproof anything," Bernstein said. "If you're adverse to risk, you don't belong here."

"Whose images are they? Who owns the domain name? Do you have an employee handbook? What about agreements?" Bernstein asked. "You could die from a series of small paper cuts that bleed you to death."

"There's a really great government website, uspto.gov, that has a basic search engine that you can use to check if the non-url part of your domain name is a registered trademark," Piccionelli said. "Post-election, trademark and copyright litigation will be the big issues for adult website owners."

The discussion then centered around the recent guilty verdicts in the Max Hardcore obscenity trial.

"Max was ultimately prosecuted for something he didn't do," Douglas, one of Hardcore's attorneys, said.

Douglas then went on to describe how the jury did not view the charged videos in their entirety and how Hardcore's entire website was also not viewed — critical issues when one test of obscenity law requires that the work in question be considered as a whole. "Is a website a totality?" Douglas asked. "That's the important question."

"As Max said, it's a tragedy for America," Douglas concluded, "When someone will go to prison for creating movies that consenting adults want to watch and that consenting adults had fun making."

On the subject of the newly proposed revisions to the 18 USC '2257A federal record-keeping statute, Piccionelli opined that producers may want to keep records on all simulated sexual performances the same way that they do for explicit ones.

"It's a short period of 221 days [until the end of the Bush administration]," Piccionelli said. "But it is perhaps the most dangerous time the industry has faced."

FSC Roundtable Luncheon
Following the legal panel, the Free Speech Coalition hosted a roundtable luncheon, sponsored by MovieDollars.com.

Billed as "your chance to get up-to-date news about the activities of your industry's trade organization, The Free Speech Coalition," the luncheon featured representatives from the FSC talking about "the latest legal, lobbying and pro-industry activities being performed on your behalf by the FSC."

The roundtable luncheon was also an opportunity for FSC members to interact with coalition representatives and to provide input on how the FSC should spend its membership dues and which industry issues the coalition should focus on.

Moderated by the FSC's Diane Duke, speakers at the luncheon included Eric Bernstein of Eric M. Bernstein & Associates; YNOT's Darklady; Michael Fattorosi of Fattorosi & Chisvin; Tom Hymes from XBIZ and Dave Cummings of DaveCummings.com.

Along with the buffet lunch, attendees had a choice of four sections of the dining room, each of which had a themed discussion, with topics including obscenity prosecutions; OSHA enforcement of blood-borne pathogen regulations on California movie production sets; and the challenges of dealing with tube sites — the discussion that seemed to have the most participants.

Promoting Affiliate Programs in a Free Porn Market
"Do you either operate or plan to operate an affiliate program?" If the answer is "yes" then the first of the afternoon sessions, "Promoting Affiliate Programs in a Free Porn Market," moderated by YNOT's LAJ and featuring Quentin Boyer from Xmoney.com; Allan of DatingGold.com; Craig Tant of MooCash.com; Steven of GroobyBucks.com and Avalanche from CherryPimps.com, was for you.

"The wild west days are long gone, and with the industry now assessing the impact of a proliferation of YouTube-style 'free porn' sites it's more important than ever to run your ship tight and keep your affiliates happy," was the backdrop for this seminar which sought to provide attendees with "insight on how you can keep your affiliate program competitive in today's difficult market."

"Maximizing your webmasters and managing your time don't necessarily go hand-in-hand," Boyer offered. "But don't just cast-off the guys that are a lot of work because they'll give you great ideas."

"You'll see 100 webmasters signing up, but only 10 of them are sending any traffic," Tant added. "Don't neglect the little guys as one can become a whale."

One thing that all the panelists agreed upon is the need for hand-holding with a percentage of affiliates.

"We've started to work with affiliates to help them get on their feet more quickly," Avalanche said. "We do whatever it takes."

"The nice thing about this industry is that anyone can join," Allan said. "If someone joins your program, they did so for a reason, so look after them."

"We actually go after affiliates that are not promoting us, and working with those that do to make sure they understand our niche and how to market it," Steven said. "When the bigger programs try to get into niches they don't understand, they tend to get it wrong because they may not have anyone on staff that's into the scene."

"The problem is that we underestimate the intelligence of our customers," Boyer added.

LAJ then shifted the topic, asking "How much is 'too much' free porn to give out?"

"Dating converts well without free content, but our cam sites offer free feeds with an upsell," Allan said.

"We limit our free content so that we're not giving away pop shots," Avalanche offered. "We create interactivity with surfers and try to engage them with our sites."

"One thing I can do that the tube sites can't do is create interaction," he added.

"Our most productive affiliates are the ones using the least amount of our content," Steven said. "But we need to offer it because it's all about keeping up with the Jonses."

It Works in Porn Too! Understanding the Value of Branding
"Few marketing forces are less understood than that of branding," and with that lead-in, the afternoon's next seminar, "It Works in Porn Too! Understanding the Value of Branding," was underway.

Moderated by YNOT's Connor Young, the panel included Ken from TheBestPorn.com; Halcyon from FlashCash.com; Jennidahling of HowIGotRich.com; Monica from HotMovies.com; John from Kink.com and Chris from AVN.

"Separating the effective from the ineffective branding campaigns is no easy task, and a commitment to branding isn't always cheap," said the show's promoters, promising attendees they would learn "about how your branding campaigns can take your business from obscurity to relevancy, even in a saturated and complicated market like online adult entertainment."

"There's a lot of studies that show that well-branded companies can see an increase of up to 200 percent in sales," John said. "It's all about the money."

"There's a lot to branding that isn't absolute ROI," Monica added. "It's about being known and being trusted."

"Every time you make an impact with your brand, you can leverage it the next time you target your market," Halcyon said. "It's also about branding yourself."

"There's always going to be new people entering the business and it's important to reach and remember them," Jennidahling said.

"Companies have the perception that since they know themselves, then everyone else does too," she added.

"I'll get clients that just want to be in the show issue, but I advise against it," Chris said. "It's about consistency, not size."

"You always want to have measurable metrics," Ken opined. "We use Google AdWords as one measurable way to track our ROI."

Young then moved the topic on to identifying some of the better branding opportunities available today.

"There's many benefits to sponsoring shows and parties," Monica said. "These are things that you can't measure with a dollar amount as far as direct ROI and it's important to stay within your budget."

"Party sponsorships are dangerous because people drink your booze and then don't remember who paid for it," Chris added.

"Your interactions are not in boardrooms, so it's important to have a front that projects stability," Halcyon said. "But you also have to figure out what you can afford and stick with it."

"It's important to be consistent about what you're doing and work it over time," John said. "If you're small and growing, there's a lot of guerilla techniques you can use."

Vegas Ken brought branding's bottom line home and in no uncertain terms.

"Everyone seems to forget that branding goes back to the brand," Ken said. "You're better off putting your money into building the best product that you can."

Free Porn Evolution: Accept It or Fight Back?
"Is free porn the root of all evil? Or is the industry simply evolving, meaning the clever companies will just have to adapt to thrive?"

That is the question that the afternoon's final seminar, "Free Porn Evolution: Accept It or Fight Back?" set out to answer.

Moderated by Tom Hymes from XBIZ, the panel featured Kim from ATKCash.com; Dan from CamZ.com; Michael from Webbilling.com; Morgan Sommer from Cybersocket.com and Greg Piccionelli of Piccionelli & Sarno.

"Can the adult industry flourish if most consumers no longer feel the need to buy the digital content that they can so easily get for free?" This is the question on the minds of many online adult entertainment operators and this panel promised "a lively dialogue between some of the more successful members of our industry."

The seminar led off with a discussion about the difference between "good" free porn and "bad" free porn.

"Bad free porn is a 30 minute clip from a 45 minute movie," Dan said. "I don't think that folks are making money that way."

"But those companies that have imagination will figure out a way to monetize that traffic," he added.

As for what constitutes "good" free porn, "I have no problem with watermarked, legitimately distributed clips," Rowntree said.

"About 80 percent of our joins come from free promotional content, but the problem is that our entire member's area gets illegally shared," Kim said. "What incentive is there to pay beyond 'being honest'?"

"Every time there has been a new technology, stakeholders have tried to stop it," Piccionelli said. "The technology will inevitably make infringement so easy and widespread that it can't be stopped."

So what is the attorney's advice for dealing with the market challenges presented by free content?

"Take pirateable material and pair it with monetizable, non-pirateable material," Piccionelli said.

Kim agreed, saying "Make it easy for people to find what they want and then tie it in with something else."

The simplicity theme was explored more fully, with Sommer saying that his company was not so much focusing on enhancing the user experience but on simplifying the surfing process.

"They remain members because they like what you have — so give them the most clear-cut access to the content they want," Sommer said. "Eliminate questions, make it easy."

The subject of tube sites and their impact on the industry surfaced several times in the seminar, with one perspective coming from the billing arena.

"Tube sites are just the next step in the evolution of the TGP," Michael said. "You need to have the right billing mechanism in place to cater to your users."

As to whether or not market forces would continue to impact the free and pay-for-porn arenas, Sommer took a practical view.

"The marketplace always takes care of itself," Sommer said. "The question is, 'are we evolving with the marketplace?'"

Rowntree also focused on a practical approach, offering one last tip for online content publishers.

"Watermark everything," Rowntree said. "Just don't put it in the lower right hand corner because the tube sites will cover it with their own logo."

Are We Evil or Divine?
Last up on the agenda was a special presentation by Evil Angel owner John Stagliano entitled "Are We Evil or Divine?"

Stagliano and his two companies, Evil Angel productions, Inc. and John Stagliano, Inc., were charged earlier this year with multiple federal obscenity-related offenses after being investigated by the Department of Justice's Obscenity Prosecution Task Force.

Stagliano faces more than 30 years in prison, the loss of his company and personal assets, and potentially millions of dollars in fines.

Stagliano offered a 30 minute address in which he talked about his work in adult entertainment and about what it is like to be the "target of a high profile government-led assault on porn."

All told, the range of seminars and presentations offered at this year's Cybernet Expo provided a wealth of information and diversity of opinion for all of those fortunate enough to have attended.

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