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Paysite Report: Digital Media Marketers Examine Latest Opportunities

Paysite Report: Digital Media Marketers Examine Latest Opportunities

While the notion of paying for porn might seem naïve or obsolete for many modern consumers, those carnal connoisseurs concerned with choice, quality and safety, remain willing to ante up to satisfy their desires by purchasing premium porn.

In the online space, this has historically meant joining a paysite, typically via a recurring subscription-based membership — but 2018 is not 1998 — and over the past two decades, many paysite alternatives have emerged for quality-conscious consumers. These outlets range the gamut from video-on-demand and their clip site progeny to custom clip creators and live interactive content, such as cams, casual dating, adult gaming and more — all competing with paysites for porn fans’ discretionary dollars.

In order to inspire someone to subscribe to your product, there needs to be something about it that stands out. That’s remarkable. That goes beyond just showing sex and pretty girls on camera. Your brand, the experience it provides and the attitude it cultivates, have never been more important than they are now.

XBIZ decided to take a look at current trends in 2018’s adult paysite market, gathering insider insights from some of the top players in paysites and other premium porn portals today. With so many facets to such a broad subject, we narrowed our quest for creative inspiration to the very marrow of the matter, in hopes of discovering actionable tips for building your business. As such, we focused the discussion on the current challenges facing the paysite market; the biggest opportunities for paysites over the near- to mid-term future; and the importance of affiliates for paysite promotion in 2018.

Here’s what we learned:

Challenges Breed Excellence

As expected, there are many current challenges facing the paysite market — including an ongoing threat posed by a glut of free porn — and worse yet, pirated porn. One anonymous contributor from the ranks of the new generation of content creators and marketers (who didn’t want to advertise that her site has been pirated), calls content theft 2018’s biggest challenge and says that most of the site’s piracy comes from password crackers and free tube sites.

“Once I upload a scene it is often available for free within hours. There is one tube site that will not comply with DMCA and it is gaining in popularity, ranked No. 682 by Alexa in the U.S., and you can download or stream scenes from my site, or sites from companies much larger than mine,” she reveals. “A customer recently emailed me and told me the only reason he decided to pay for porn, for the first time, is because he believes that his computer got a virus from a streaming tube site. I have to think that piracy will either put us out of business or change the way producers make revenue.”

This fundamental appreciation of one of the primary problems faced by paysites was echoed by Duke from DukesHardcoreHoneys.com, who says, “the main challenge is combating people sharing pirated content which can often deter potential customers from becoming paying members.”

Piracy is not the only source of free porn, however, with many affiliates, producers and other legitimate rights holders using their content as surfer bait for advertising-supported free sites. Bree Mills, Gamma Films’ head of production, underscores the point, telling XBIZ that the biggest challenge facing the paysite market today is the reality that in our digital age, people don’t have to pay for porn anymore.

“They don’t need to. They can get almost anything for free and often at a very high quality, Mills says. “In order to inspire someone to subscribe to your product, there needs to be something about it that stands out. That’s remarkable. That goes beyond just showing sex and pretty girls on camera.”

For Mills, a big part of this “something remarkable” requires branding and innovation.

“Your brand, the experience it provides and the attitude it cultivates, have never been more important than they are now,” Mills explains. “A lot of paysite owners don’t understand that. They are stuck in production and marketing mentalities from 10 years ago.”

When it comes to branding, many models and independent content creators are taking their careers into their own hands — a situation that may be good for talent but can be problematic for promoters.

For example, Grooby CEO Steven Grooby says a current challenge for paysites is from cannibalization by the clip market, which is encouraging models to work for themselves.

“While I thoroughly support models producing and taking ownership of their own content, I believe some of the clips companies are overselling what they can bring back to the models and only a small percentage of top performers (or those able to market themselves better) will make anything like a reasonable return,” Grooby explains, noting that paysites have to work harder with the models to ensure both parties are happy and getting remunerated properly.

“However, the clip sites do serve a purpose of introducing potential new customers to specific models,” Grooby adds. “If the paysite can leverage that awareness to encourage people to join to see more of that model (and other similar content) at a vastly better value for the money than per-clip, then perhaps the relationship can work better.”

Bang! President Clement P. tells XBIZ that while there are many challenges for paysites today, he’s not sure that any of them are particularly new — it’s just that the old ones are getting bigger…

“We’re in a very competitive market with low barriers to entry, a wide variety of alternatives, heavy price competition and skeptical consumers that have a history of being mistreated by companies that are long gone,” Clement confides. “To overcome this, we work hard to continuously improve the value we deliver to our customers. We focus on four key areas: creating top quality content, great technology, effective marketing, and a stellar customer service experience.”

Robert Levy, GameLink parent eLine’s Director of Membership Services, agrees that the challenges haven’t changed all that much in the last couple of years or so.

“The new laws, GDPR, U.K. age verification, all have presented obstacles to overcome, but I would consider them less of a challenge and more just the cost of doing business in 2018,” Levy explains, adding, “The big challenges are still piracy, fraud and free content.”

Laurent, Affil4You’s CEO, tells XBIZ that while mobile carrier billing is an easy and seamless payment method, it remains a major challenge for paysite operators; but like Levy, calls fraud (which he claims is frequently caused by affiliates), “the biggest obstacle in today’s market space.”

For many operators, a major challenge is to provide enough high-quality content to satisfy repeat users.

“Content is king!” exclaims industry veteran Jean-François Laverdière (a.k.a. JMan), who is in charge of the paysite business unit at CrakRevenue. His experience of nearly 20 years working in adult makes him the company’s go-to-guy for anything and everything related to paysites.

“In this ever-competitive market, shooting original good HD-quality content on a very regular basis is paramount. As soon as a user opens his or her wallet and payment is involved, users are right to expect content of a higher caliber than what they can easily find on the web for free,” Laverdière explains, noting that for FILF.com, the company is focusing on the originality and the quality of its content to attract new users and citing its latest scene with Mia Malkova, which has racked up more than 11 million views on Pornhub. “Second, users must find what they’ve been looking for. We work very hard with our affiliates to create the best funnels that will, for example, lead a user that likes a banner to a precise pre-lander and — eventually — the exact scene he or she originally saw or was in search of. Fortunately for us, we have access to hundreds of products with exclusive HD content, which allows us to create the perfect funnels for every niche.”

Laverdière says that in order to cultivate long-term interest and long-term loyalty, paysites need to add new content on a weekly basis.

“Providing access to exclusive content, special promotions or giving out loyalty points are some fantastic option,” Laverdière concludes. “In the end, the members’ area needs to be clean and consistent in showcasing exciting brand-spankin’-new content that’s not only tailored, but content that your user has likely waited all week to see.”

Wasteland CEO Colin Rowntree tells XBIZ the biggest challenge, as it has been for years, is to be able to monetize content in a traditional paysite structure, since there is so much free porn on the tubes readily available, citing the old saying, “Why buy the cow when you can get the milk for free?”

“A few strategies on this include using the tubes to drive traffic to paysites by doing regular clip uploads as a content partner featuring great production values and unique topics,” Rowntree says, “and putting original high-quality content on as many verticals as possible (VOD, broadcast licensing, Roku channels, etc.), which not only monetize, but also strengthen brand awareness and loyalty by consumers.

“Other challenges include the murky waters of GDPR, U.K. age verification, the possibility of internet sales taxation on digital purchases in some states, and others,” Rowntree adds, “but the verdict remains out as to how significantly these factors will affect the paysite sector.”

Dwelling on the consistency with which these problems are faced, YanksCash CEO Todd Spaits tells XBIZ the answers to this question go beyond the obvious.

“I could pull from the obvious and ever-present laundry list that concerns all content producers, the same list posted year after year, or I could note the problem that has always been the gorilla in the room,” Spaits says. “That problem is the industry as a whole’s unwillingness to actually deal with the problems on said laundry list in any way that is effective.”

For his part, Spaits is interested in what tube owners, billers, ad companies and media companies are specifically doing to solve each problem, item by item.

“I would love this question to be asked to the leaders of the industry where the largest percentages of profits end up,” Spaits adds: “How do they intend to protect their supply chain of models and content producers and ensure it is worth their time to continue to make a quality product?”

Likewise, AEBN’s Bishop points to the culture of “free” that has evolved over the past decade as a key challenge and says piracy and unscrupulous practices became more common and helped to solidify the perception that porn is free…

“Selling premium adult content to consumers that are coming from sites that are giving away similar content is not easy. These traffic sites are operating with a different model, using the content as bait and selling the ad space,” Bishop explains. “Premium content sites are then forced to compete against satellite industries that are not in the adult content business, such as dating, pills, toys, gaming, etc.”

Bishop cites the advantage enjoyed by larger free sites that have cheap/free traffic to test upsells on, and notes AEBN operates PornoTube.com to bridge the gap between free and premium services.

“The site uses hand curated clips from the content available within the library as a soft upsell to the premium content. For the users, there are no additional ads or distractions — the emphasis is on presenting the content in an entertaining way and help the users to transition to the paid service,” Bishop adds. “AEBN is an adult video on demand company that is in the business of selling premium quality adult content. Many of the companies we think of as being in adult are less interested in selling content and more concerned with making their margins selling the popcorn and drinks. AEBN is a content distribution platform that is built exclusively for and remains dedicated to promoting and selling adult content for our studio partners.”

This focus on excellence is echoed by all top players, including Yannick Ferreri, PornDoe Production’s Head of Business Development, who says paysites have to offer an exceptional experience on every level to be able to maintain a user’s attention.

“With content available in abundance via so many different mediums, getting a user to pay monthly requires perfection,” Ferreri tells XBIZ. “Paysites not only have to constantly maintain industry standards — they need to set new ones.”

VNA CEO Vicky Vette tells XBIZ that the adult paysite business can be as lucrative as it has always been, but notes consumers and creators are being given more and more choices that they didn’t have before.

“As with all industries we are adjusting to new platforms that didn’t even exist recently. We see some girls abandon traditional paysites in favor of things such as OnlyFans and Patreon. Others focus on clips stores like ManyVids, iWantClips, Clips4Sale or Snapchat for primary income,” Vette says. “It’s awesome to see girls shooting more content but it also means the consumers are deluged with choices — do they go buy a clip or do they buy a membership or do they buy both?”

Vette says there are fewer scenes being made today and sometimes the consumer is being given lower quality footage than they received in the past, reflecting another change in the market.

“Girls are shooting with no light and no make-up now,” Vette explains. “A lot of the girls are abandoning shooting traditional adult altogether and are just ‘snapping.’”

This embrace of quantity doesn’t have to come at the expense of quality, however.

MindGeek Senior Product Director Mario Nardstein says that in an ever-expanding digital business landscape where quantity has become a quality of its own, it is becoming increasingly challenging to gain visibility.

“A major concern,” Nardstein tells XBIZ, “is that ‘the next big thing’ can come and go without ever being noticed through all the clutter.”

Opportunity Knocks for Paysite Pros

Of course, if the paysite market only offered challenges, no one would bother taking on the burden of continuous creativity and the chore of day-to-day operations — it is the opportunities for profound profits over the near- to mid-term future that continues to inspire interest and innovation among elite erotic entrepreneurs.

“The biggest opportunity is in the tools a business has at its disposal,” Nardstein reveals. “Organizations that had the foresight to invest in the right tools can now take advantage of the opportunities present in tailoring a custom-made experience for users and in high-velocity testing.”

Grooby tells XBIZ that akin to the stability of challenges, not much has changed on the opportunity front.

“Produce content that people want to pay to see, offer superior value for money and customer service, market your paysite as a brand, make your models and producers happy, and keep trying new sites or scenes with a lowest viable product philosophy and you should succeed,” Grooby says. “Whether you’re getting more traffic from Pornhub and xHamster than from Google, or other branding/traffic venues, it doesn’t make a difference as long as you are getting people to the front door — and once they are in — giving them exactly what they want and exceeding their expectations.”

Grooby confides the company has seen very positive growth across all its sites in the first two quarters of 2018 compared to 2017.

“We’ve opened more new sites in the last six months than we have in the 24 months previous to that and we’re getting good feedback,” Grooby explains. “We’ve consolidated our brand to make sure ‘Grooby’ and ‘Grooby Girls’ is getting the maximum exposure — and thus feedback — from models and members. It’s incredibly hard to keep building and keep looking for new avenues of revenue, but it can be done.”

Underscoring the prime promotional value of the internet, Duke says, “I believe that the biggest opportunities are in reaching an unlimited number of customers throughout the world, who would possibly never come across your product or content if it was never available on an online platform,” while Clement says opportunity is not a one-size-fits-all commodity.

“Companies that make an effort to talk to their customers, listen to their wants and needs, and deliver a product that those customers value, will continue to succeed in the market,” Clement explains. “There’s a lot of noise in the market, so it’s critical to understand why your customers like your product and then work on ways to make them love your product!”

For his part, Affil4You’s Laurent finds opportunity in implementing mobile carrier billing that abides by all rules and regulations globally to help further expand revenue; while Ferreri points to PornDoe as working alongside model content sites to promote both name and product simultaneously as definitely the way of the future.

Focusing on keeping customers, not just constantly seeking new ones, Laverdière says that for paysite member retention, a members’ area really needs to stand out from the crowd.

“Get [members] to participate. Interaction is key, and we found that with a branded survey we get the extra revenue we need. The survey allows us to gather information, get to know our members and allows us to tweak the members’ area so we can have an extra month of paid users,” Laverdière says. “Incorporating games, trivia and surveys are all ways to bring additional revenue to the table.”

“Indeed,” Laverdière confides, “we have been able to generate 30 percent more revenue by using CrakRevenue’s line of surveys.”

For his part, Rowntree says the search for the next opportunity has posed big questions for Wasteland since it launched in 1994.

“Our strategy for this is to always stay on top of new emerging and improved technologies and to be an early adopter of such,” Rowntree tells XBIZ. “The current opportunity markets include virtual and augmented reality; migrating production to 4-6K cameras to achieve higher quality finished productions (even if they are downsized to 1080p until the internet catches up) and emulating high-end polished filmmaking such as Andrej Lupin creates for SexArt.com.”

“Sure, the acting will rarely come close to Hollywood benchmarks,” Rowntree adds, “but consumers respond very nicely to well-shot, edited and distributed content that builds brand loyalty and sales.”

Taking a positive outlook, Spaits sees a silver lining in the storm clouds over the increasing government oversight of the internet that can benefit those ethically producing original content.

“While the GDPR and the U.K. age verification processes are a challenge, I know that it causes more challenges for our less scrupulous competition than it does for us,” Spaits explains. “The process of this oversight also brings attention to other practices in our business that take away from the more core transactions of selling online sexual experiences direct to the consumer.”

“I welcome these eyeballs looking at our business,” Spaits says. “We will prosper under the scrutiny.”

Bishop says the biggest opportunities come with advances in new technologies and incorporating them into new strategies and business models. He notes the fourth quarter of 2018 will be a very exciting time for AEBN and its partners, leading to a very positive outlook for its 20th anniversary in 2019.

“Advances in video codecs and delivery are one area which will allow for higher quality video delivery and viewing experience,” Bishop explains. “Evolving web technologies and hardware advances will allow users to have a more ubiquitous experience across devices from mobile platforms to gaming consoles.”

“A.I. and Big Data help us to visualize and identify trends and respond much sooner than was ever possible and provide the foundation that will drive a more dynamic and personalized experience for users,” Bishop adds, noting, “The landscape is constantly changing, and things are evolving so quickly — the key is to stay nimble and be able to adapt quickly.”

Like others that cite the need for non-adult-specific values when developing paysite success stories, Levy tells XBIZ the biggest opportunities lie in playing to your strengths.

“People pay for memberships because they want what you are providing. They want it reliably and delivered in the highest possible quality,” Levy explains. “Leaning into what your site is providing, and making the best content for your brand, will always be what pays off. Paysites should also look to new technology (4K, VR, etc.) to be cutting edge in providing content.”

Gamma Films’ Mills says in the near-to-mid-term, successful paysites will find ways to deepen their relationships with their fans, build community, and make “the experience that is their brand” stand out.

“This doesn’t necessarily come from fancy features or a high increase in update costs, it comes from getting to know your members and evolving your content to match their interests,” Mills reveals. “Focus on organic growth and building a strong reputation, both within the industry itself and with those who watch your work.”

For her part, Vicky Vette has witnessed many changes as the industry evolves and says it’s awesome to see girls realizing they can control their content and make money by shooting.

“Traditional stars went to Los Angeles for a couple of years and barely worked on content. Because girls know the importance of making content they are now training their fans that they have to pay for porn,” Vette tells XBIZ. “It’s nice to see the fans being made to pay for premium services again. For a while, fans were getting almost everything for free.”

Vette says with all the girls now charging for something, be it membership sites, Snapchat, OnlyFans, and clips, there is less opposition to spending money on paysites.

“Even tube sites that didn’t charge anything just a few years ago are lining up premium memberships,” Vette says. “It’s nice to see the industry leaning back to an expectation of money from fans — even if there is still too much free porn out there.”

Today's Affiliate Scene

Another major factor in the success equation is the importance of affiliates for paysite promotion today — a consideration that leads to the redefinition of what it means to be “an affiliate.”

Duke says affiliates are definitely a good way to expand a paysite’s brand and to make extra income in the process, while Grooby agrees, saying affiliates remain as important as they’ve always been.

“As long as they’re bringing you traffic and converting them into new sales, that you could otherwise not have gotten, then you need them no matter if they’re only making a few sales a month or are a bigger affiliate,” Grooby explains. “If they’re competing with you for the same traffic then you need to nip that off, otherwise you’re giving away 50 percent of your revenue for no reason, so work with the affiliates who are bringing you unique traffic.

Clement says that starting around 2011, Bang! began focusing the majority of its promo efforts on understanding how to make advertising work — and placed less emphasis on using traditional affiliates.

“We haven’t had many active solo webmaster type affiliates for the past five years,” Clement confides. “Instead, the bulk of our affiliate payouts these days are made to other programs that we partner with for secondary sales, like cross-sells, one-click upsells, members’ area promos and so on. We’re still doing a lot of business there and doing a higher sales volume with fewer people makes the task much easier to manage.”

One of those management tasks involves keeping a handle on fraud from both consumers and affiliate partners alike.

“Affiliate marketing is becoming less important in today’s market as it has proven to be a common source of fraudulent traffic,” Laurent says. “With mobile carrier billing, such fraud has to be recognized and has resulted in strictly enforced and controlled services implemented by the carriers themselves.”

Laverdière calls affiliates “paramount” to a paysite’s success and says CrakRevenue has a network of more than 35,000 affiliates (and still growing), driving traffic to hundreds of offers on a daily basis —including its own paysites — but notes paysite affiliation is not like it used to be.

“You need to listen to your affiliates and cater custom funnels for them. We at CrakRevenue work closely with our affiliates and are constantly building tools to help them sell our paysites,” Laverdière concludes. “We make sure to optimize the monetization process for each and every user, starting with our most dynamic creatives, all the way down to our landing and signup pages.”

Wasteland’s Rowntree says although the sheer volume of adult affiliates was slaughtered by the tubes years ago, there are still “whales” out there that find ways to successfully promote programs.

“One key element here is the most successful affiliates are not relying on traditional free hosted photo and movie galleries, but rather are using content that their sponsors provide them to hand-create and curate promotions that range from animated GIFs on social media to blogs with daily photos and video trailers, adult pin-posts and many other platforms,” Rowntree reveals. “The other factor for the new breed of affiliates is that they are able to create and maintain a blog or similar free site which promotes the sponsor offers.”

Rowntree notes that most social networks and search engines, etc., do not allow posting affiliate links, but have no problem with links to blogs as the source, which have links and banners to programs.

“At this time, however,” Rowntree concludes, “the largest and most successful affiliates are other paysites doing cross-promotion, review sites and high-volume tubes with content partner programs.”

Spaits says for YanksCash, every affiliate is immensely important and treated so, but he confides that the ongoing cattle call for new affiliates isn’t important anymore.

“There are a handful of channels that are important and a handful of companies in each of those channels depending on your niche that are important to partner with,” Spaits concludes. “If you really understand your niche, you know those companies.”

Bishop tells XBIZ that AEBN was built to connect affiliates’ traffic with studios’ content.

“A huge portion of the business we do every day is done through our affiliate partners and more are signing up each day,” Bishop reveals. “Though the affiliate landscape has consolidated and changed dramatically over the past 20 years, we highly value our affiliate partnerships and we remain dedicated to providing the best opportunities and tools for generating revenue through the AEBN platform.”

“We believe that establishing and maintaining strong partnerships with the various companies and individuals within the industry is essential to maintaining longevity and success,” Bishop concludes. “We have both near and long-term plans to support our affiliate partners, and we continue to seek out new prospects and opportunities.”

eLine’s Levy is quick to note the importance of affiliates depends on what you mean by “an affiliate.”

“Mindgeek is an affiliate. Mr. Skin is an affiliate. Business-to-business relationships, which are mostly affiliate relationships, are crucial to the bottom line,” Levy explains. “Obviously, the time of ‘mom and pop’ TGP sites making paysites big bank are over, but the people who have made it through the age of tube sites and are still standing are still essential to a good business model.”

PornDoe’s Ferreri says adult affiliate marketing will never be what it once was since brokerage made site owners’ lives a lot easier by selling off advertising and letting others handle the publishing.

“With that said, affiliates do still exist and do still play a decent role since their traffic mediums have changed to serve up more qualified, informed and interested users,” Ferreri concludes. “Finally, there are multiple tube platforms that offer you advertising by way of affiliate marketing via content partner programs such as PornDoe.com. This is a surprisingly lucrative option that many have embraced.”

“Affiliates still bring lots of traffic ... but they aren’t going to build your brand for you anymore,” Gamma Films’ Mills concludes. “They are often too busy building their own brand nowadays.”

“Sadly,” Vette confides, “for us at least, affiliates are not a big part of the mix. We have a few core affiliates, but I think it’s hard for the average affiliate to make a ton of sales. We are more ‘direct to consumer’ than ever with social networking being what it is.”

As with much in adult, targeting plays a big role in the effectiveness of affiliates’ promotional efforts.

“Affiliates help expand our reach and provide users with content specific to their interests,” MindGeek’s Nardstein concludes. “They select and promote our content that best suits their traffic needs.”

This range of responses reflects the profound changes shaping today’s adult paysite business, but it also points to the creativity, diversity, excellence and experience that successful paysite operators bring to consumers, creators and affiliates alike. Paysites are far from dead in 2018, and will likely always have a home on the internet despite the ongoing challenges.

Just as consumers embrace premium cable, internet and satellite radio and television options despite the widespread availability of freely broadcast fare, so too will premium paysites continue to satisfy a demand despite the many free alternatives.

You can learn more about running a successful paysite — or being an affiliate of one — by joining the free industry community at XBIZ.net.

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