Karups is another name that has become synonymous with amateur content. The nine-person company is owned by two brothers that started to experiment with the web in 1997 and launched their first paysite six months later. Karups' Charles Anderson says that one of the biggest differences between then and now has been the quality of traffic. Back then it was easy to make quality traffic trades with sites of a similar nature. That isn't the case any more.
Anderson says that online marketing also has changed drastically since the mid-1990s, but Karups has remained steadfast in its approach. The company continues to offer a 50 percent revshare model for affiliates while other companies have launched 80 percent programs and offer other incentives like $3 trials. Anderson says these new approaches to marketing have led to corrupt business practices that have hurt the industry.
"We can't pay them more than we're making," he said. "It doesn't make any sense to me, and it definitely shouldn't make any sense to any person who has been around business."
Karups isn't the only amateur content company trying to stick to its guns when it comes to the way they market. Chris Gkikas, A.T. Kingdom's affiliate sales manager, says that while other companies strive constantly to be innovative in their approach, A.T Kingdom's success has been due to its unwillingness to go toe-to-toe with that kind of competition.
"If company A is an aggressive marketer and company B is an aggressive marketer, they're in direct competition," Gkikas said. "But we're sticking to the soft-sell approach because we found that it generates longer recurring memberships."
As much as some companies would like to continue with what they are doing, the reality is that the amateur market will continue to evolve and companies will change with it. Building on its current affiliate structure, Karups, for example, is launching its first 60 percent revshare program. Homegrown, too, is in the midst of change. They've launched a program where they will act as distributors, manufacturing and deliver videos online directly for producers. Timlake says that interaction and community building with surfers and producers is essential to the business plan at Homegrown. The Internet business is more profitable than the video side right now and is expected to be the driving force of the company going forward. He says there's plenty of room for others to enter the amateur market, too, just not at the same level.
Finding Loyal Customers
"We've learned that there's a customer for every amateur," Timlake said. "It doesn't matter what their looks are like. Once they find the person or personality they like, they'll be loyal forever. Even if you just have a few hundred of those people, you're in business and making better than beer money."
Charles Anderson agrees, saying there is room for new people to enter the market, but it would be very difficult, even if backed by a lot of money. New players just don't have the knowledge of the industry and contacts to make it happen. "If we launch a new product, we're not going to rely on affiliates right away," he said. "We're going to first rely on our current members."
One company that has proved that you don't need to have started in the 1990s to be successful is FTV Cash, which was launched in 2002 by owner Robert Simiar. He got the idea after he was surfing adult sites and couldn't find what he was looking for, so he decided to put his skills to work.
"I used to do a lot of high-end fashion shoots," Simiar said of his career before adult. "The perverted side of me said (while shooting models), 'What if her skirt lifted up for a second while she was sitting in a sexy pose?' I thought, 'What if I could do a shoot where she wasn't wearing any panties?' FTV started out looking very much like a fashion series."
After breaking into the industry with that idea, Simiar admits that his partner, Chris Stovall, has been the driving force behind the success of FTV Cash. New producers need to be part of an established program, says Simiar, so they have a channel for distribution or connections to people in the marketplace, like FTV Cash did, to make it happen.
It also doesn't hurt, says Simiar, to be passionate about what you do. "If you're going to start producing content, you must be 100 percent into it and don't expect to make any money out of it," he says.
