The Deal with User-Generated Content

Search for the phrase "porn and tube" on any search engine, and the results are liable to be frightening. In early January, Yahoo! returned more than 8.3 million results, and MSN reported more than 8.5 million. Google and were more judicious about what they crammed into the category, returning only 919,000 and nearly 312,000 results, respectively.

Of course, not every result was discreet or represented an actual "tube" site: one that allows users to upload their homemade amateur porn for all to see, in much the same way mainstream behemoth YouTube presents a hodgepodge of video content from around the world.

Still, the search-engine results indicate there's a virtual ocean of user-generated porn on the wild, wild web, and that thought is giving traditional adult content producers ulcers.

Not only are their expensive-to-produce wares being co-opted by cretins who erase identifying marks and claim them as their own, but the sheer volume of amateur material available on the tube sites is drowning out some of the commercial noise made by more traditional, up-market porn resources online and in the real world.

On the other side of the coin are small-market producers and tube-site owners who depend on the sites for at least part of their livelihoods. Although things are not entirely rosy for them, either — no one yet has managed to devise a foolproof plan for tube-site profitability, and many small producers are doing well just to hang on in a marketplace becoming increasingly crowded daily — they see opportunity in the new, "user-directed" Web 2.0 world, and they are determined to seize it… as soon as they figure out how.

"It's a nightmare," said one producer who asked not to be named because he was afraid his comments might spark rumors about the health of his company. "People who tell you the tubes aren't having an effect on everyone are just wrong. It doesn't matter whether you produce content for the web or DVD, piracy is rampant, and it's costing all of us millions of dollars a year. Add to that the volume of amateur content out there and the amount of work you have to do to keep your stuff on top of the lists [at the tube sites], and it just becomes backbreaking. I don't know whether to be depressed or mad, but I do know it's not easy to make a living anymore. The money and the fun are gone for a lot of people."

That's not an uncommon sentiment. Content producers seem to be evenly split about whether tubes are good or bad for the adult industry as a whole, but most seem to agree they're a fact of life that can't be ignored.

"It's a necessary evil; it's just an incredible game that you must play," Extreme Associates owner Rob Black said, adding mental flexibility makes a difference in how one perceives the tube phenomenon. With the rapid evolution of digital content delivery methods in recent years, Black believes even progressive types are having a hard time adjusting their business practices to beat consumers to their own expectations.

It's somewhat like battle fatigue, he explained: Adult content producers grew accustomed to easy money during the web's early days, and now they must struggle constantly just to keep up with increasingly complex and savvy consumers who are not as easily amused by porn as they once were.

"Consumers now direct their own experience more," according to owner Karl Edwards. "The Internet democratized the means of distribution [of adult content]." He added that tube sites are like gigantic online shopping malls or virtual catalogs that allow consumers to refine their desires and figure out what really turns them on. Tubes are a predictable evolutionary result of the thumbnail galleries of previous years, if seemingly less productive in transforming lookers into buyers.

But converting shoppers is not their purpose, according to Black. His company was founded in the real world and produced DVDs for more than a decade before he abandoned brick-and-mortar distribution in favor of an online-only product. Extreme's adult videos now are distributed exclusively by video-on-demand provider, and while Black's virtual efforts "aren't setting the world on fire" — at least in the few months he's been at it — he's making a decent living, he said.

"Any new, big venture where you're not giving blowjobs on Santa Monica Boulevard [in order to make ends meet], I consider it a success," he said.

Black gives much of the credit for his success to tube and social-networking sites and to being able to relate sound brick-and-mortar principles to a milieu in which most people consider such ideas worthless. The tube sites are "good for branding — getting eyes on your brand — and that's valuable," he said. "It's like advertising in [print publications]: You can't gauge success on a direct conversion basis. That's not the goal of it, and it's not going to happen; it's completely delusional to expect that."

Black said the tube sites are making a difference for him, but he can't quantify their effect on his company's bottom line. In fact, he can't even name every tube or community site to which he posts, but he said "there are thousands of them," and the effort requires several hours of his time every day. "If it's a tube-formatted or social-networking site, we're there," he said.

The effort also requires that he let a sizeable stash of Extreme Associates' content loose in cyberspace with no expectation of return on the investment.

"In two months, I might post two hours of free content" in the form of clips that run only a few minutes each, he said. That's OK though, because "even if it only works [to generate website membership sales] at 2 percent, it's something that only involves your time. Most [content producers] have so much content it's unfathomable," and many of them don't realize there's a good use for even material that might be thrown away because it's not up to par for inclusion on a DVD or inside a pay site.

As for the rationale behind spending so much time posting, Black said it was a no-brainer, at least for him. "If other big companies are doing it, then it's got to be good for us to do it too," he explained. "Look at who else is wasting their free content and wasting their time by posting on those sites. I'm just one small flea on a giant dog. Who am I to say I'm not going to do it too?"

Although there may be safety and profit in a herd, Falcon Enterprises President Jason Tucker said that's not his primary motivation for exploring the utility of tubes.

He hasn't launched any adult tube efforts yet, but his company is exploring a mainstream offering, and he views it much like he viewed the use of notoriously pirate-ridden peer-to-peer networks to generate legitimate revenue. "I have always believed that you can't win a race chasing the heels of the person in front of you," he said. Despite that, "I think there's a legit model [in the tubes], but I'm not sure yet exactly what it is."

Tucker said he suspects advertising is a key to making a tube a profitable business venture. The key to making advertising profitable for both the advertiser and the publisher probably is filtering the traffic, he added.

"It's a process, not a direct click," he explained. "You need to filter [users] down a bit to qualify them. That way, a .002[-cent] hit becomes a .03. I was averaging between .09 and .12 per click on the P2P [networks] when I was done weeding through [the traffic], and that is more than Yahoo! charges as their base price. I think I can do the same here. If I can get it to .05 to .08, I will be happy."

Kurtis Potec, accounts and public relations manager for Xtube, said advertising revenue composes about one-third of Xtube's bottom line. The other two-thirds are made up of video-on-demand sales and revenue sharing on amateur content Xtube members offer for sale on the site. A small amount is contributed by the webcam-hosting program the company began offering its members on Dec. 23. Based on performance during the first two weeks of its existence, Potec said he expects the webcam project — which allows Xtube members, on a revshare basis, to host their own video-chat rooms on Xtube and charge $1 per minute to view the feed — to increase in fiscal significance very rapidly. In early January, each of the camgirls were bringing in more than $200 a day, half of which they got to keep.

What surprised Potec most about Xtube's finances was the impact the amateur-content revsharing program had on the site's bottom line. Established in March 2006, Xtube only began to turn a profit in late summer 2007, and much of the red ink was erased by the revshare program, Potec said.

That's particularly impressive when one realizes that only about 1 percent of Xtube's members — 420 out of more than 4 million — participate. One gay man in his early 20s makes $2,600 every two weeks "just being a gay twink [on video]," Potec said, pointing out that Xtube also makes $2,600 every two weeks off the young man's efforts.

"The impact of [the revshare program] is huge, and I'm surprised there aren't more users getting a chunk of it."

Most of Xtube's members are 30 and older (one is 77) and live in the U.S., the U.K. and Canada, in that order of prevalence. Most of the posters are there to show off and get feedback from fellow users. "Even bad videos get 20,000 hits a day," Potec said — which isn't surprising, considering Xtube's server logs indicate the site receives 4.5 million unique visits and more than 37.5 million page views daily. Although the site no longer requires users to sign up for a free membership in order to view videos, it still captures between 4,500 and 5,000 voluntary new members daily. (It was capturing 20,000 a day when membership was mandatory.)

Potec said the site also suffers some attrition, primarily in the form of users who become disillusioned with their potential to become porn stars.

"Typically, everyone thinks they are the next big porn star, so they come in with really high expectations," he revealed. "When they realize nobody wants to watch them sit in their chair and touch themselves, they leave."

The ones receiving 200,000 or more daily views of their content typically stay, and some join the amateur revshare program.

In order to have a successful experience at tube sites, Potec said both amateurs and commercial posters need to bear in mind that "it's like walking into an auditorium full of people, saying 'hi,' and having two people say 'hi' back.

"Tube sites are like a huge shopping mall, a marketplace, or like sampling in the grocery store. We bring huge numbers of people into our marketplace. The old-school people need to think of ads or content [on tube sites] like putting posters on the wall. They attract a lot of attention. What they're saying is, 'Hey, if you like this, the store where you can buy it is right there.'"

He also said studios and other professional content producers may be beating the wrong drum when it comes to piracy. Tube-site owners, Potec explained, don't want illicit copyrighted content on their sites any more than the content's owners do. "We don't want people uploading pirated content, because we need that content to support our VOD theaters," he noted. "We're very dependent upon the studios for our income."

As for getting inside the heads of ever-more-demanding users, Potec said the so-called "Web 2.0" user-directed experience movement is changing the playing field for all online publishers.

"People are very loyal to the content they watch," but they can also be very fickle, he noted. "The 'Porn 2.0' user makes all the decisions about his experience. It's up to us to provide them with the tools so they can provide their own definition of 'good' or 'not good.'"

Black added producers need to redefine their notions about success. "In '99, you'd see big returns from posting to galleries," he said.

"That doesn't happen anymore, because there's so much stuff out there. We're finding success, but we're not getting 50 joins a day."

Furthermore, the tubes are only one step in an evolutionary process that shows no signs of stopping — or even slowing down.

"There's always something replacing something else, and there's always going to be something replacing something else," he said. "DVDs replaced VHS, and now DVDs are on borrowed time. Adjust your mindset."


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