AEBN Sticks With Long-Term Approach to Growth

From the very beginnings of what became AEBN, the core group of founders always had a long-term vision.

“Our focus was on forming long term partnerships and building a solid reputation within the industry, while providing users with the best experience possible at what we felt was a fair and reasonable price,” said AEBN longtime exec Bishop.

The majority of brands we have acquired through the years have been in the gay vertical. NakedSword, Raging Stallion, Falcon, and Hot House. Historically we tend to allow each brand to continue to function autonomously with minimal intervention, while we continue to focus on the AEBN brand and partnerships. —AEBN’s Bishop

“We decided very early on that we would not utilize the deceptive tactics that were generally attributed to ‘porn sites’ at the time, and we continue to keep best practices in mind as we move forward. The very nature of our program was designed to foster long-term relationships with our industry partners, as we knew that video consumption via the Internet would evolve and become more prominent.

“Through this time we have maintained focus on the evolution of video delivery, and strive to stick to our core set of values as well as our commitment to our industry partners and our users,” he said. “We have big plans for the future and our goal is to provide value to the consumers we service and the partners we work with well into the future.”

In recent years the adult industry has experienced a high degree of brand consolidation and AEBN has had a hand in several of those deals. With numerous straight and gay division properties, it’s interesting to note the elements of a brand that AEBN analyzes when considering a brand management deal, merger or acquisition.

“The majority of brands we have acquired through the years have been in the gay vertical,” Bishop said. “NakedSword, Raging Stallion, Falcon, and Hot House. Historically we tend to allow each brand to continue to function autonomously with minimal intervention, while we continue to focus on the AEBN brand and partnerships.

“The general idea being that each brand brings its own unique identity and success into the larger equation,” he said. “What made NakedSword an asset was in part the site style and the management of the site.

“Tim Valenti from NakedSword later introduced Chris Ward and Brian Randall, the owners of Raging Stallion,” he said. “A deal was made and Chris and Brian became stockholders just as Tim had with the NakedSword deal. Brian went on to run the Raging Stallion affiliate program for a time and then eventually retired from the company.

“Chris continued to run Raging Stallion and he later brought Falcon and Hot House studios into the fold. Chris has recently announced his retirement from the company,” he said. “Tim Valenti is now responsible for all of the studios and he continues to head up NakedSword. Moving forward we are beginning to focus on a more unified and collaborative effort both technically and creatively to the benefit of all of our brands, as well as our other partners in the industry.”

For inexplicable reasons there has always been a divide between most of the adult companies servicing the straight market, and companies that cater to gay male audiences. AEBN was one of the first to successfully straddle that line and succeed in both areas.

“The AEBN platform has always had both gay and straight content,” Bishop said. “The flagship video-on-demand theater for the straight content back in the day was, and for the gay content it was was not a theater at all. The site was the domain for the affiliate program.

It wasn’t until 2003 that a splash page was placed on AEBN that gave consumers the opportunity to see adult content or go to the business side of the website as a studio and affiliate partner. Up to that point the only services we offered were through our partners. From the moment we started we have been doing our best to manage the site for a diverse audience with lots of different sexual appetites without alienating anyone.”

Like everything else about AEBN, that decision was made with long-term goals in mind. “It is easier to market to the consumer if you just say AEBN has all the best adult content online without having to qualify it as being one orientation or another,” Bishop said. “When you arrive at the site today you are prompted to select your preference. Once you have selected, you can easily view content from the other library and switch back and forth anytime. We see many users in our system that do. There are a few genres of content that can be viewed from either side of the theater system as well.”

So, with a track record of so much success at long term planning in the past, there is value in seeing what the company’s plans for the future are all about today.

“There is a focus on technical and creative collaboration between our internal brands,” Bishop said. “On the technical front we are working on a new generation of code to carry us into the future. New delivery technologies should help us reach even more devices and provide a better quality viewing experience overall. Creatively, we are planning to reboot AEBN’s Rock Candy video line with the help of Tim Valenti and Naked Sword.”

“For our users and industry partners, we will be focused on personalization of our sites along with better ways to explore, discover, and access the vast amount of content in our system,” he said. “One of our primary goals and a byproduct of these efforts will be to help extend the lifecycle of each piece of content in order to help our content partners generate as much revenue as possible. We will also be providing our content partners with much more data to help them identify trends that are likely to contribute to a formula for success with their production efforts. Better data for our content partners equals better content for our users. Better content discovery for our users equals better returns for our partners.

AEBN has also been rumored to have interests far beyond the adult video industry. Does having adult brands help or hinder mainstream brands, and vice versa? It’s a little more complicated than that due to the size of AEBN and the diversity of its owners.

“AEBN is owned by about a dozen or so people who could be called serial entrepreneurs,” Bishop said. “From the largest stockholder to the smallest, it seems like everyone has a business or idea they are cultivating on the side. Some of the projects may show enough potential that the investors of AEBN are given an opportunity to come in as angel investors. Other projects are private and don’t require additional investment. AEBN has on occasion come on as a minority partner to some new ventures to lend staffing and infrastructure resources. I know what you mean when you ask about other products that might be traced back to AEBN. AEBN is a standalone adult company.

Connecting a new product that doesn’t have anything to do with adult content to AEBN is not necessarily in the best interest of the new product. It is great to have a steady and successful product like AEBN to work on but it is a heck of a lot of fun to work on new projects as well. AEBN and its experienced staff have been involved in lots of startups and that experience can be very helpful to jumpstart a new project.”

With a long view of the industry’s history and a broad view of what is happening in today’s market, it’s interesting to note that AEBN’s view of the forces affecting the industry overall right now comes down to macro-economics more than anything else.

“The economy has been steadily improving in the United States. The further the industry gets away from 2008 the better off we will all be,” Bishop said. “While the economy has slowly been turning around so has consumer’s ability to spend a little more money for entertainment. I am optimistic that things will continue to improve with home foreclosures down and the economy strong enough for the interest rate to begin to rise a little. I feel like the worst days are behind us as an industry and we have reason to be hopeful looking forward.

“Selling porn is tough when the unemployment rate is high and people are losing their homes,” Bishop said. “There is an audience of consumers that are willing to pay for products from trusted brands that provide a quality product at a reasonable price. Look at the success of the Amazon Prime Video Service, Netflix and Hulu.

“All of these services are selling video products that can be had for free. If you are willing to spend the time to seek them out they are available,” Bishop said. “There will always be consumers who are willing to pay for convenience. We all do it. There are things we spend money on that we could have gotten for free or discounted but it was worth it to us to pay a reasonable sum for convenience. The Internet as a whole is steadily heading in that direction.”

“The last many years of recession have complicated matters. Had it not been for the economic slowdown we would still be headed toward a more value added service platform that we have today. We just would have arrived there later. When I was in college I used bootleg software, music, and video because I was broke most of the time. When I could afford to pay for services I did if there was a value there.

Yes, the margins are very slim for our product and yes it can be hard to sell but it does sell if the product is good. We spend every day working on building a better product for the consumer of tomorrow. We all have to evolve or there is no place for us in the future.”