The morning seminar entitled “Content Is King” was steered by its moderator, Robert Warren of Webmaster Paradise, into controversial areas like content theft, 2257 compliance and the recruitment of new talent. The panel, which included Mark Prince of 2Much Internet Services, Danielle Edelman of WEG Cash and veteran adult videographer/performer Craig Valentine, imparted their experience in each area, in some cases doing their best to cover ground perhaps more suitable for legal panel discussions.
Asked how common content theft is, Valentine responded that his own content shows up on unauthorized, unlicensed websites nearly constantly.
“It’s something I see as much as 8, 10 times a day,” Valentine said, adding that his legal counsel and accountants had projected his revenue loss from content theft at upwards of $200,000 last year alone.
Warren emphasized the tremendous risk infringers take when they steal content, citing the recent case in which Falcon Foto essentially took full ownership of the Porn Kings affiliate program as a result of a copyright infringement case.
During the seminar following the content discussion, “Processing Updated,” the equally thorny issues of credit card fraud, chargebacks and fraud scrubbing dominated the discussion, as the audience peppered the panel with questions concerning fraud scrubbing techniques, the relationship between the processing rates charged by their companies, and the vexing issue of “friendly fraud” — which occurs when a site member charges back or seeks a refund for a membership that they clearly purchased intentionally, but which they maintain they are not responsible for.
Panelists for the processing seminar included Doug Wicks of CCBill, Brian Silver of NetCash, Karen Campbell of Net Billing, Harmik Gharapetian of Epoch/Paycom, Maya of Safe Charge and Daryl McDade of Verotel. Kourosh G. of Local Billing moderated the session.
Aside from the hot-button issues of fraud and chargebacks, the panel emphasized the importance of cascading billing, the practice of directing customers who have been declined by one processor along to alternate processors in an attempt to salvage the sale.
“Cascading billing is very important to affiliates,” Campbell said, noting that multiple processors and backup options are features sophisticated advertising affiliates look for when evaluating affiliate programs.
With audience members prodding the panel on the details surrounding subjects like fraud scrubbing and preventing chargebacks, Silver encouraged taking a more holistic approach to evaluating the value provided by processors, noting that each of the companies represented on the panel provided services that went well beyond fraud control, including customer service, extensive statistics and in some cases affiliate tracking.
“At the end of the day, it’s still ‘money in, money out’,” Silver added, noting that it was easy to get caught up on subjects like chargebacks and processing rates, and to lose sight of how expensive and labor-intensive it would be for companies to do for themselves those aspects that the processing companies handle for them.
The touchy subjects continued during the 2:00 p.m. workshop, “Are You Protected,” a power point presentation delivered by Tim Henning, the compliance director for the Association of Sites Advocating Child Protection (ASACP).
While it has been well established that the legitimate adult entertainment industry is not involved in the production or distribution of child pornography, Henning observed that child pornography (CP) sites frequently attempt to use adult site affiliate programs as a means of generating revenue from the pedophiles that surf their sites.
According to Henning, the scam works as follows: when users seek access to a given child pornography site, the webmaster of that site will direct them to affiliate links for legitimate adult websites, and instruct the users to purchase a membership to that site. The user then supplies the CP site webmaster with their user name and password in order to prove that they have purchased the adult site membership. The adult site’s affiliate program, entirely unaware of the subterfuge being perpetrated by the CP site webmaster, then pays a commission out on what appears to be a legitimate sale.
Henning noted that ASACP spiders their members’ sites, and can help to identify possible criminal activity among the affiliates participating in the affiliate programs operated by the unsuspecting adult site companies.
In Friday’s final seminar, the “State of the Industry” panel, contentious areas again came to the fore, as moderator MJ McMahon of AVN Online posed questions to the panel about subjects like the so-called “summer slowdown” observed by adult site owners each year, theft of content, spyware and 2257 compliance. The panelists for the state of the industry session were Derek Meklir from Mr. Skin Cash, Scott of SleazyDream.com and Mark Bauman of Naughty America.
While the speakers all agreed that the industry faces challenging times, they also cited many reasons for optimism. Asked about the specter of a major change in the legal landscape for the adult industry, such as the elimination of the ability to offer free content, Scott maintained that whatever comes, the industry likely will survive.
“If we had a ban on hardcore, and everything had to be simulated sex, I don’t think we’d see a dramatic increase or decrease in the amount of sales,” Scott said.
