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XBIZ 2017: Execs Discuss State of Industry

XBIZ 2017: Execs Discuss State of Industry
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Jan 11, 2017 10:55 AM PST    Text size: 

WEST HOLLYWOOD, Calif. — Some of the top executives and visionaries in numerous segments of the online adult entertainment industry gave their views at XBIZ 2017 on what they see as the top changing trends in the biz.

The slate of nine business leaders who spoke at Camgasm.com-presented XBIZ 2017 "State of the Industry" seminar offered a peek of what lies ahead for their businesses — as well as the industry as a whole.

XBIZ founder and publisher Alec Helmy on Tuesday moderated the panel in front of a standing-room-only audience at the Panorama Ballroom at the Andaz hotel in West Hollywood, Calif. (All of the seminars at XBIZ 2017 are sponsored by NETbilling.com.)

The panel comprised Affil4you’s Joey Gabra, NETbilling’s Hustler’s Tony Cochi, Utherverse/HoloFilms’ Brian Shuster, SegPay’s Cathy Beardsley, ICM Registry’s Stephen Winyard, TrafficPartner’s Michael Reul, Grooby’s Steven Grooby and Private Media Group’s Charles Prast.

Helmy started the symposium by revisiting the question in online adult: Is content king? The publisher cited a recent XBIZ article that queried whether content has re-emerged as the leading driver of consumption.

Helmy started the symposium by revisiting the often debated question in online adult: Is content king? The publisher cited a recent XBIZ magazine special report which proclaims content has re-emerged as the leading driver of business, overtaking internet traffic in importance.

“[Hustler’s] the biggest distributor in adult worldwide,” Cochi said. “We pull a ton of content with all our partners. It is all about finding the right mix and balance that resonates with the audience. Larry [Flynt] is a firm believer of ‘content’ is king and so am I. Without content, what are we really selling?”

While tube sites might provide free content, Cochi said, some now seek out more curated content.

“We found that kids who buy porn with beer money but eventually got a job that pays between $50,000 to $60,000 a year eventually come back. They see a value in our content.”

Shuster agreed with Cochi, saying that he’s seen a “democratizing” of content and that “consumers are being drowned” with low-quality content with tube sites.

“Consumers have to sort through so much bad content, that many are coming out and saying, ‘I really have to pay for content where I don’t have to sort through all this,’” Shuster said. “I think we are going to see a fairly robust cycle, particularly with niche and virtual reality content. I think we can count on a decade of an ‘up’ cycle.”

Prast said that he expects at least 10 years of growth in the online adult biz, and that could be fueled by “curated content” or “something worth paying for.”

Helmy also asked about “The Trump Question,” whether the incoming Trump administration is a real threat to the online industry.

“We certainly do,” Cochi said. “Thank God with [the results of] Prop 60. We already have these crazies of the world that circulate — like [AIDS Healthcare Foundation’s] Weinstein. I think the government might be sensible. But some of the nominations for certain positions in Trump’s administration are scary.

“And we as a group need to pull together and fight,” Cochi said. “Should it come to that, Larry would take this one head-on. He did it all the way to the Supreme Court almost 40 years ago. Years ago they used to lock people up for pornography. To see the business digress and go backwards in time, that’s not acceptable and there will be a battle. The threat is real.”

Farber said: “Obviously, people are more tolerant now because you can grab someone’s pussy and become president. On the other side, the more conservative we get, there’s possibility of shutting [operations] down.”

“I don’t fear Trump specifically, but I am skeptical about attorney general pick Jeff Sessions. He would be bad for the industry,” Shuster said. “On the flip side, the ruling over [record-keeping law] 2257 violating the Fourth Amendment is good news for the industry.”

Prast said: “I am a heck of a lot happier under Trump than I would with Hillary Clinton.”

“Frankly, he was elected by our key demographic,” Prast said. “And frankly I think progressives are potentially to be far more dangerous for our industry than Trump.”

Other topics included in the discussion included the topic of age verification in the U.K., which is on-track to become mandatory for users later this year.

Winyard noted that Canada, Australia, Iceland and scores of other countries are watching how the U.K. initiative will all play out.

“The good thing is the government is willing to help rather than dropping bombs,” Winyard said.

But the age-verication model in the U.K. is “horrid” in Shuster’s mind.

“It’s censorship, plain and simple,” Shuster said. “To force everyone to register [for porn] is a horrid thing for people’s rights. It will infringe on our freedoms.

“It’s a movement that the entire industry should do everything it can to stop. The will not end well.”

Farber said that from a payment processor perspective the age-verification model that the U.K. is proposing will diminish sales.

“Anything that puts roadblocks to access porn will prevent them from buying it,” Farber said. “People don’t want to wait to be approved before they whack off.”  

As for the topic of VR and porn and whether it will fuel bottom lines, Shuster, who has been at the forefront of immersive content since its beginnings, said there are minor corrections that need to be made.

Shuster noted that clunky, expensive headsets need to evolve and so does the end result — the users’ climax and what to do with it.

“It’s little things like that that need to evolve,” Shuster said. “On the bright side, this year will be a major year for VR.”

Shuster noted an upcoming program with his company that will allow studios to use VR cameras and postproduction facilities to produce more content.

“VR is very exciting for everyone, of course,” Grooby said. “Yet we haven’t really seen any growth in it, because we’re just getting into it.”

Helmy later asked the nine panel members what they will focus on in the current year. Here’s what each said:

  • Gabra: “Better management of traffic, getting more bang for your buck. We have lots of traffic and we need better management … maybe through artificial intelligence. We want to rely more on AI. We are going to push hard on that.”
  • Farber: “We see more merchants present user buys and present ads for users to look at for products and services. Integrating that into the shopping carts, and collecting all of the data from previous purchases is a big user experience that increases profitability.”
  • Cochi: “We are trying to make sure that we are always on-point and give consumers what they want. We track metrics; we like to see what does well. We take that seriously. There might be a lack of that data in Europe, but in the U.S. we have that. Data, great intelligence are key.”
  • Shuster: “It will be a new year where we see a lot of people experimenting with VR. But it’s also the year for renewed fear and censorship. Across the board, we are seeing fallout in foreign markets, isolated markets experimenting to control the population [through censorship].”
  • Beardsley: “This isn’t a sexy trend, but we’re finding is that merchants are having problems with bank accounts. We can process transactions, but some can’t settle them. That’s a big challenge, and this year we’re trying to focus on that.”
  • Winyard: “There are a lot of smart people out there who try to focus on their bottom line by cutting costs. Being aware of all the threats and opportunities that are out there and focusing on bettering your business is the way to get ahead.”
  • Reul: “VR will be big news and fighting against traffic [fraud] is a top issue.”
  • Grooby: “For us, the customer is getting smarter. I think that anyone using too many tools like cross sells should re-investigate that. It’s time to get a little personality in the sites, get the customers involved.”
  • Prast: “Taking care of our customers and managing our businesses more carefully. And, also, from the content side, we are going to see more cooperation and integration between media and physical goods, especially toys and especially the male market.”
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