Writer Michael Brush analyzed financial reports of Playboy (PLA.N), Private Media (PRVT.O) and New Frontier Media (NOOF.O). The report said that while pay-per-view through various cable and satellite partners like Time-Warner Cable, Comcast and Echo Star Communications have long been the bread-and-butter revenue for most major adult companies, because the content is pre-scheduled it limits availability to consumers.
Video-on-demand platforms, however, allow viewers to select specific content and watch it when they want. VOD also makes it easier for content providers to track consumers’ viewing habits, as well as preventing piracy of content since VOD broadcasts cannot be copied.
“You get better and more specific actionable data about what works, and we have been responding to that,” Playboy Enterprises CEO Christie Hefner said in the article.
Revenue statistics backed up the reports claims, with New Frontier Media reporting a 10 percent increase in VOD sales for the second quarter, while overall pay-TV revenue for the company was up only 1 percent. New Frontier’s largest cable partner reported an 18 percent drop in pay-TV revenue, but a 17 percent increase in VOD sales for the same time period, and 10 of New Frontier’s cable partners reported increases also in VOD revenue.
Both Playboy and Private saw decreasing magazine and DVD sales; however revenue from new media platforms compensated for losses in those areas.
The fastest growth in new media platforms is in Europe, where IPTV (Internet protocol TV) technology is quickly gaining ground. Estimates project that numbers of IPTV subscribers will grow to 27 million by 2011, up from 4 million in 2006.
Private currently is aligning with telecom European VOD providers and the report said it already has access to 75 percent to 100 percent of the current and prospective IPTV viewers in France and Germany.
“Europe is projected to be the fastest-growing territory for this platform,” Private COO Peter Cohen said. “Everybody has ramped up their activity with these new digital platforms. I think we will see it grow quite quickly now.”
Additionally, community network-based Internet applications like Second Life and adult-oriented Red Light Center also may become a potential revenue generator for adult multimedia companies, and Private said it is currently developing an interactive Internet community which should be launched within the next six months.
On the mobile front, Europe is leading also, with G3 technologies and adult-friendly protocols for content delivery making access to adult material on cellphones easier for the consumer.
“It's highly, highly popular,” Private wireless division head Tim Clausen said. “People watch entire movies for an hour and a half on their mobile phone.”
Estimates by an analyst at Juniper Research estimates that adult content sales for mobile will reach $1.8 billion worldwide this year, while research company Strategy Analytics predicts an increase in mobile-adult sales to $5 billion by 2010.
While the U.S. has lagged behind in the mobile market overall due to slower advances in cellular network technology, and in the adult-mobile market by reluctance of carriers to offer adult products, Private said its content is accessible by more than 745 million cell-phone users in 33 countries via 78 operators.
“We think that wireless will be an explosive top-line revenue opportunity for the simple reason that the cellphone is the ubiquitous device in the world,” Cohen said.
Cohen indicated also that as the U.S. market accesses faster data delivery and implements mobile age-verification protocol, Private anticipates a significant upturn in new media revenue.
