XBIZ 2016: The State of the Industry

XBIZ 2016: The State of the Industry
Stephen Yagielowicz

LOS ANGELES — The 2016 XBIZ Show presented its second day of educational sessions on Thursday, providing fresh insights from the adult entertainment industry’s top insiders and operators who are gathered in Hollywood for this popular annual event.

Presented by Epoch, the 2016 XBIZ Show runs from Jan. 12-15, at the Andaz Hotel, delivering four days of unparalleled business insights, networking and deal-making opportunities, set against the energetic backdrop of Sunset Strip and the Hollywood Hills.

The second day of exclusive keynotes, seminars, panels and workshops was highlighted by XBIZ’s popular “State of the Industry” session, exploring the year ahead for the standing room only audience.

Industry veteran Greg Dumas lead the prime panel that included Cherry Pimps’ Jack Lawson, Flirt4Free’s Greg Clayman, Hustler’s Tony Cochi, Steve Winyard of ICM Registry, Mitch Farber of NETbilling, Vivid’s Michael Klein, Todd Glider of BaDoink, and Wasteland’s Colin Rowntree, as they discussed virtual reality, content production, mobile and more.

Dumas laid a solid foundation for the status quo, noting that things have been quiet for quite a while, flowing nice and smoothly, with relative and welcome stability on the billing and regulatory front, which has allowed operators some breathing room to prepare for tomorrow’s challenges and the many new opportunities presented by advances in technology, such as virtual reality.

The technology angle was exemplified by the panel’s pro-VR stance, with Glider explaining that the first time he tried Google Cardboard he was inspired to explore its possibilities.

“Many companies and industries are investing in VR, but porn is leading the way,” Glider says. “It’s been a while since porn has driven technology, and this will give a boost to content producers.”

Clayman confided that Flirt4Free will debut VR cams within the next three to six months, adding, “After that, it’s up to our customers” to determine the technology’s fate.

“If you listen carefully enough, your customers will tell you what they want,” Clayman explains. “VR is just another piece of that puzzle.”

Rowntree, known as an early adopter of all things tech, notes that distribution will be the cornerstone of VR’s success, and faces challenges due to bandwidth limitations; while Klein revealed Vivid Virtual will debut this spring, saying “it’s definitely something that will catch on.”

Moving on to content production today, Cochi pointed to the progression of video from HD to 4K, and now to 6K, 8K, and beyond, but notes that until there is stabilization in the market, it’s tough to take a stance — saying that once major stakeholders choose a technology, Hustler will adopt it to be a quality leader.

Rowntree isn’t waiting for the dust to settle, however; explaining that while he has been shooting in 4K for some time, it isn’t as much for current titles as it is for future-proofing the company’s content library.

Lawson says that he still shoots in full HD because few consumers can view 4K, and echoes Cochi by saying that technology is moving so fast we don’t know where it will be in the future.

Another technological hotspot is the growing dominance of mobile Internet access, which on the adult front, is often in a hybrid mode that combines mobile and desktop access.

“There’s a push to mobile, so having truly responsive payment pages is vital,” Farber explains. “Folks are making their purchases on mobile, but then going to their desktop to view that content.”

Farber emphasized the importance of speed in this process, advising the use of fast-loading mobile payment pages regardless of the user’s connection speed.

“Just having a mobile friendly payment form isn’t enough, it has to be responsive,” Farber emphasized. “Mobile first, everything else is second.”

Glider says that mobile has been BaDoink’s emphasis for years, and reports increased sales from fine-tuning its approach, including robust split testing of mobile payment forms.

The profound changes in adult traffic acquisition and monetization also came under the panel’s scrutiny.

“The more ad networks there are, the more opportunities that are presented to us,” Clayman says, adding “Each network competes for the best customers.”

Rowntree pointed to the evolution of Google’s relationship with adult, and notes that its algorithm is going towards accessibility and readability, rather than old metrics of keyword density and traditional SEO parameters.

“A lot of people think they can outsmart Google,” Glider adds. “But those techniques only work for a week or two.”

Winyard discussed the impact of new domain options on marketing and search, highlighting the fact that Google has made it clear it is heavily investing in alternative TLDs.

“With 2,000 to 3,000 TLDs on the way,” Winyard says, “there will be a mind change in the way we perform searches.”

Beyond search engines, social media is becoming a major driving force in attracting visitors.

“We generate high quality productions including behind the scenes (BTS) video for marketing on Facebook, Instagram and Twitter,” Lawson says. “There are different ways to exploit the business.”

That generation of content is also a hot topic for 2016.

“The tubes are not going away,” Klein says, “but the irony is that they’re now complaining that there isn’t enough content available to them.”

Klein notes that better quality content attracts people, which is leading more studios to participate in tube sites’ content partner programs as a traffic and sales generation channel.

Rowntree says he specially edits his video clips to make them into marketing tools.

“We are begrudgingly content partners,” Rowntree explains. “I wish the tubes had never happened, but they did, and we adapted.”

This example illustrates how adult content companies are at least partially mitigating the damage that tube sites and the glut of free content has caused to their business models and bottom lines, and reveals the challenges of doing it right.

“Free is great,” Lawson says, “but at the end of the day, we need to monetize not devalue our product.”

Another danger area is the increasingly complex battle against hackers, malicious bots, rogue employees and more, with Clayman advising site operators to take a big-picture view of their site’s security, saying, “a lot of us are taking a step back and making sure that every nut and bolt is tight.”

Clayman says that site security audits where someone attempts to access your system are beneficial in this process, as is upgrading to the latest versions of the backend systems powering your site.

The lesson is clear that in this era of relative stability for the industry, with many sites on auto-pilot and operating on legacy platforms that are increasingly vulnerable to attack, now is the time to take a look at where you are, where you want to be — and whether or not your systems will survive the journey.

“There are always threats out there, but being smart can help out,” Winyard says, optimistically adding, “In 2016, the industry is getting smarter.”

“It’s a great time to be in this industry,” Farber concluded. “You just have to keep reinventing yourself.”

Tonight, Jan. 15, the industry will gather at the 2016 XBIZ Awards, presented by LiveJasmin and hosted by adult superstar Stoya, at the J.W. Marriott at L.A. Live in Los Angeles, unveiling the pinnacle of the 2016 XBIZ Show.

For more information, visit XBIZShow.com.