Paysite Power: Stuck in the Past?

Heading into the beginning of 2013 the energy within our industry is higher than it’s been in years. Finally we’re seeing a resurgence in adult paysites and a willingness among consumers to give paid online content another shot. For the first time in a few years it seems that opportunity is knocking once more.

When XBIZ asked me to write a monthly column tailored to the new format of XBIZ World magazine, their only request was that I write with a focus on what’s current or on the future of adult paysites — not on the past. It’s ironic because the past is so much of the reason so many online businesses are struggling and why so many are failing.

A successful paysite recognizes its value and communicates it to customers. Every piece of marketing collateral and every page of a paysite tour (including the join page) should reinforce the value over and over again.

My background is paysites. Thirteen years ago I got started in adult by building and managing paysites for studios. Then I started an adult design company that designed tours and marketing materials …for promoting paysites. In 2006 I co-founded Elevated X which provides CMS software … for running paysites. Everything I’ve done in the past 13 years has centered around and building and managing successful paysites, not hobby projects but serious paysites — big ones, or ones that start small but have the potential to grow big. That being the case, it’s shocking to me how many people are still doing things exactly the same way we did a decade ago.

I can’t believe that an industry that once prided itself on pioneering is so stuck in the past. I’m left asking myself, is it really possible that so many adult companies haven’t noticed that things have changed?

Today’s economy is different. Today’s technology is as different as is today’s content and media. Today’s consumer has adapted to this as a natural progression but stagnation due to laziness and complacency caused by a not so distant past where big adult money was easy to come by has caused a lot of adult business owners to fall behind. The same content is no longer of interest to customers. Video formats, sizes, delivery methods and even the devices customers are using have changed.

For most of my software customers, the goal is to build or revamp paysites and get them generating a return on investment as quickly as possible without committing crimes against humanity or breaking any laws and mostly without losing their ass and ending up broke in the process.

Doing this doesn’t require a huge staff or a massive budget or big development or even many months of hard work. Elevated X powers some very big adult brands. We were surprised by it early on but have since become accustomed to hearing the smaller companies and independent producers report the most consistent growth year after year. The paysites we power that are the most successful are managed by people with a keen understanding of what their customers will pay for. They keep things simple and focus on what matters: Results.

Way back in 1854 Henry David Thoreau wrote the words, “Simplicity, simplicity, simplicity!” And it’s just as critical to success today as it was back then.

This is where I believe a majority of paysite owners go wrong.

At its core, the paysite sales formula is extremely simple: A good product + a good value + a good price = sales.

Once you have a good product that offers a good value at a good price, all you need to do is tell people about it. After you’ve told them about it, you need to keep them happy so they want to keep using your product and tell other people about it. It’s so simple I bet you can close your eyes and hear the bank teller counting out your stacks of hundred dollar bills and loading your briefcases with millions, right?

Two of the major faux pas that a lot of paysite owners commit that dooms them to failure are failing to understand what constitutes a good product and a good value in the mind of their customer and failing to enter into a market that allows them room to grow.

1) A good product is something a customer feels is a good product, which is not necessarily the same thing you or I feel is a good product. Our egos can get in our own way here. It’s important to know who our customers are and what they actually want.

Value is subjective. One customer might value the quality of your content. Another might value the quantity or frequency of site updates. Another might value anonymous purchase options, privacy and security. The next might value convenience and saving time. The more value you can offer, the easier it will be to make sales.

A successful paysite recognizes its value and communicates it to customers. Every piece of marketing collateral and every page of a paysite tour (including the join page) should reinforce the value over and over again. I see so few sites make mention of HD content, frequency of updates, privacy, security, anonymity, convenience, whether the content is streaming, downloadable, what size the videos are, how long the live cam shows are, whether the site is iPad friendly or mobile compatible or any other values.

2) You need to enter into a market that allows you room to grow yet I watch people every day do the online equivalent of opening up a coffee shop and try to sell a plain old cup of regular coffee … right next door to the busiest Starbucks in town. After they fail and they close up shop (usually within 90 days) they’ll say to me “man this business is hard.” Yeah, it is hard, but it’s a lot harder if you give yourself a one percent chance of success right out of the gate. You might look good trying but even the best rider isn’t going to win a race riding on a horse with one leg. I would argue that a lot of sites that fail would have been successful in a different market or with some repositioning.

In today’s online economy the biggest opportunity for success comes from paysites that cater to something specific. Real amateur, fetish, reality (not fake, produced reality) and humor and entertainment are consistently strong performers and have markets that show incredible growth despite piracy and economic fluctuations.

The reason these kinds of sites do well is that they tend to have an easier time building loyalty among customers. Sometimes content naturally lends itself to giving customers a sense of involvement. This keeps them happy. The more your site caters to a certain audience the easier it is to make sales and to make customers look forward to your next update or live video show and your site will become important to them. It’s no longer about the all-you-can-eat mentality. Customers appreciate a human element and some personality as much as they appreciate quantity and self-serve options.

Fetish producers understand this better than anyone. They’re so tapped into their customers and their mindsets that everything they do is dictated by customer response. And often that response comes in the form of ever increasing revenue year after year. One of them explained it to me recently. I asked him how things were going and he said his sites were growing steadily and even when his content ends up on tubes it doesn’t matter because it’s so unique in comparison to a lot of what’s out there that people see the free videos and end up coming to his sites anyway because they want to see more. They stay because of all the other stuff he offers them that they can’t get from anyone but him. He’s essentially created a growing base of loyal fans and they kept him in business during years when other adult companies were dropping like flies.

Things are looking extremely hopeful for those who have weathered the storm and those just getting started in the paysite game. Despite some of the lingering gloom and doom mentality, paysites and the membership site model is far from dead. A lot of good times still lie ahead.

AJ Hall is a 12-year adult industry veteran and the co-founder and chief executive officer of Elevated X Inc., a provider of popular adult CMS software for the online adult entertainment industry. Elevated X powers more than 2,000 leading adult sites, has been nominated for industry awards 11 times and won the 2012 XBIZ Award for Software Company of the Year.