Building the iTunes of porn
Papi_Chulo
Miami, FL (or the nearest big-booty club)
[So it the title for the following article. I guess the porn producers are trying to get creative w.r.t. making a profit]
Porn, goes the legend, is a technological bellwether. It was a chief reason the consumer world adopted VHS tapes instead of Beta, and it embraced putting content online long before the movie or music industries.
But when it comes to monetizing that digital content, the adult industry has fallen behind. While Apple, Netflix and other services were able to persuade customers to pay for songs and programming that were once regularly stolen, porn companies have seen their industry spiral, devastated by piracy.
Now a pair of companies is hoping to turn things around, launching competing services that give fans access to a vast library of porn—at a rate they hope consumers will find palatable.
(Read more: After rough 2013, porn studios look for a better year)
SkweezMe is scheduled to launch a video on demand service that closely follows the iTunes model at the end of this month. Meanwhile, MindGeek (formerly called Manwin), the industry's largest company, plans to unveil a similar venture this year.
In the works for over 18 months, SkweezMe bypasses a recurring payment model, which is the bread and butter of most adult studios. Instead, customers can pay 99 cents to get unlimited access to the service's collection of high definition films.
"Recurring billing is a marketer's dream, but it can be a consumer's nightmare," said Jamey Kirby, president of SkweezMe.
While the service will be available on PC, Kirby and co-founder Mike Kulich, who also owns adult studio Monarchy Distribution, say the focus is on the living room. They plan to launch an app for the Roku media center in early February to take advantage of that system's installed base, which according to Frost & Sullivan made up 21 percent of the streaming media devices market as of July.
MindGeek declined to comment on its pending service, though it is expected to use films and scenes from the company's many studios—as well as original content shot specifically for the service. The pricing model is still unknown, though.
(Read more: Porn's most popular stars)
For MindGeek, the service will be another tentacle in its growing empire. The company owns adult film studio Digital Playground, popular online streaming site Brazzers and the biggest porn "tube" sites (think YouTube for porn).
While MindGeek will likely pull content from its extensive catalog, SkweezMe is affiliating with other non-Manwin owned studios. By launch, Kulich says, the service should have a library of 15,000-20,000 titles, including films from major studios like Vivid and Elegant Angel.
Studios will be compensated via a revenue-share model, dividing 25 percent of the monthly revenue generated by the service.
The challenge with both SkweezMe and MindGeek's service, of course, is getting customers to pay for porn. Because consumers can so easily download pirated versions of films from BitTorrent sites or watch free clips on the tube sites, getting them to lay down cash could be difficult. Those sites, though, are loaded with pop-up and banner ads, which often infect a user's PC with malware.
(Read more: BitTorrent's PR makeover includes Moby, Madonna and more)
"It's very difficult to say you're going to create the iTunes of porn," said Scott Taylor, owner of porn studio New Sensations. "I think people over the past years have decided that it's a God-given right that porn is free."
Kulich and Kirby argue that the adult industry has simply not given customers a chance to be honest. And while they're under no illusions that this option will put an end to piracy—or even substantially curb it—they believe history shows there's a significant amount of money on the table.
"Music piracy was running rampant in the late '90s," Kulich said. "Apple came out with a pricing model saying 'we're not going to eliminate piracy, but we believe there is a large segment that's pirating music because it is the only way to get music onto their computers.' So they created a service where they thought they could pick some of that piracy up off of the floor and make some money from it. … We don't expect to be able to recuperate the $4 billion the industry loses each year to piracy, but it would be nice if we could recuperate a portion of it."
(Read more: How Beyoncé could turn pirates against themselves)
So what took the industry so long to attempt this model?
Despite its reputation, porn hasn't been a tech leader for some time, perhaps since the VHS days. The hasty decision to make content available online had a devastating financial impact on the industry. And efforts in 3-D and 4K filmmaking failed to take off with consumers. Similarly, adult novelties that attempted to use online components fell flat.
Because of this, and because revenues on the whole have been floundering, studios have gotten a bit gun-shy over the years when there's financial risk involved. But Kulich says that's slowly changing.
"I think the reason this hasn't been done before is a lot of studios feel if we're offering this content from hundreds of different producers at such a low price, that's giving away our content," he said. "As the industry has progressively lost revenue, though, these ideas are getting more and more support from the studios."
http://www.cnbc.com/id/101335599
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Porn company Naughty America announces plans to shoot 4K videos
Your ultra-high-definition television will soon offer even more eye-popping entertainment — of the adults-only variety. According to the Wall Street Journal, pornographic film company Naughty America plans to spend hundreds of thousands of dollars to upgrade its shooting to 4K — meaning adult flicks with crisper, clearer, more up-close-and-personal resolution.
The small company's maneuver into 4K shooting won't be easy. Andreas Hronopoulos, the company's chief executive, told the WSJ that the investment was significant enough to sink the company if UHD technology didn't take off, largely because of the significant costs associated with the storage and editing processes necessary for 4K footage. "The closer we can come to making it feel like you're there, the more successful we are," Hronopoulos said. "Our customers want to get as close to reality as they can get, without reality getting in the way."
"Our customers want to get as close to reality as they can get."
Naughty America isn't the first adult filmmaker to get into the 4K game. As The Verge reported last year, newly-launched website Huccio.com touted itself as the first to offer 4K erotic content, and tech-savvy company Pink Visual is investigating the feasibility of 4K videos. Other producers, however, seem intent on waiting to see whether 4K takes off among consumers before biting the bullet: one survey showed that 40 percent of those in the adult industry didn't think the technology would do much for business.
Still, Naughty America's decision also reflects broader interest in 4K among content providers and distribution services more generally. At last week's CES, Amazon announced a slew of impressive 4K partnerships with providers including Warner Bros. and Lionsgate — all of which will be available on Amazon Instant Video to those who own Samsung 4K televisions. Samsung also announced 4K partnerships with Comcast, DirecTV, and Netflix, while Sony has been pushing 4K entertainment since it last year launched the world's first 4K video distribution service.
After rough 2013, porn studios look for a better year
2013 couldn't have gone much worse for the porn industry.
The DVD business, once the lifeblood of adult film producers, dwindled even further. Legal challenges over mandatory condom laws continued to dog the industry. And porn companies were forced to shut down production three times after four performers tested positive for HIV.
As the industry prepares for the Adult Entertainment Expo, its annual trade show inLas Vegas, the question on everyone's mind is: What does 2014 have in store?
No one's sure, of course, but some insiders are cautiously optimistic that the worst is over.
"My general impression is the industry has bottomed out," says Alec Helmy, founder and publisher of industry trade publication Xbiz. "Companies have figured out how to change their business models to sustain profitability. In terms of the number of players, it's at an all-time low, but those who have survived are obviously the stronger breed."
Globally, porn is a $97 billion industry, according to Kassia Wosick, assistant professor of sociology at New Mexico State University. At present, between $10 billion and $12 billion of that comes from the United States. Revenue from traditional porn films has been shrinking, though, because of piracy and an abundance of free content on the Internet.
"DVD sales are barely alive at this point," says Steven Hirsch, founder of Vivid, one of the industry's largest and best-known studios. "We've seen probably an 80 percent reduction in sales over the past five years—to the point where fairly soon it's not going to make sense to put movies out on DVD. It's not going to happen tomorrow, but we are certainly marching towards that day."
(Read more: HIV brings porn trade group under fire)
Diversification is a fast-growing trend in the industry. Studios who rely solely on DVD sales have generally gone out of business. Some of the survivors have beefed up their video-on-demand offerings to take advantage of the growing online market. Others have branched into physical products, such as sex toys or lubricants.
Few have grown in as many directions as Vivid, though. The studio perhaps best known for its ongoing line of celebrity sex tapes launched a satellite radio channel on Sirius this year, saw its Vivid TV become available in 70 million homes and licensed its name to a series of nightclubs in Charlotte, N.C., Miami, Los Angeles and (later this month) New York City.
While some porn companies may have goodwill, the industry as a whole could use some work. Last year's HIV cases came as adult film producers managed to fight off a state law requiring mandatory condom use in California, but continued their legal battle against a similar ordinance passed last year in Los Angeles County.
Before 2013, it had been three years since the industry saw a positive HIV diagnosis. And while many insiders say the porn industry's internal screening system did what it was supposed to do—catch the diagnosis early and ensure that performers did not infect others—some executives say they're still uneasy.
"When you have three moratoriums in a year and you eat your cache of movies, it has an effect," says Steve Orenstein, president and owner of Wicked Pictures—the only major porn studio that uses condoms in all of its films. "Obviously, there's nothing that has happened in the last year to change our decision to stay with condoms. If anything, it has solidified it."
(Read more: Condoms in Porn? Just another day at Wicked Pictures)
2013 saw more consolidation in the industry, the most notable of which was the merging of RedTube and Manwin—two of the biggest online operators in the industry. The combined company now controls the majority of the porn 'tube' sites, (think Youtube for porn), which stream live content and XXX clips.
Many in the industry blame the tube sites for the industry's woes, noting they are often filled with pirated content, which is offered to consumers for free. Tube sites pick up ad revenue from page views, but the producers of the films earn nothing.
Manwin also saw a leadership change—as founder Fabian Thylmann, once considered the most powerful man in porn, sold his shares in the company roughly 10 months after his December 2012 arrest in Belgium on charges of tax evasion. "Both myself and Manwin are at a stage where I can no longer add significant value to the best of my ability," he said in a letter to employees.
Manwin soon changed the company name to Mind Geek.
Insiders say they expect more buyouts to happen this year—and more companies to go under.
"I think there's more to consolidate and we will see that happen in 2014 and moving forward," says Hirsch.
(Read more: Porn's most popular stars)
Despite the moratoriums, consolidation and ongoing legal uncertainties, both insiders and outside observers say the porn industry actually weathered a tough year fairly well. Owner Scott Taylor says New Sensations did better in 2013 than it has the previous two years. And Hirsch says Vivid's revenues are strong.
"I don't think the industry is any better than it was a year ago," says Wosick. "But they're not any worse than a year ago either. I think [the events of 2013] may have forced it to be a bit more self-reflective. Studios have had to tackle some issues they've had to avoid the past few years and been forced to take stock with how they exist in this present-day economy—and present-day moral atmosphere. ... I think 2014 might be the year the industry comes together."
http://www.cnbc.com/id/101326937
Also not sure that charging for it will help, either. One of the things that makes Internet porn so nice for guys is that if you're the least bit smart about your browsing history and/or using Incognito mode on your browser, there's basically no trail someone who's not real tech savvy (i.e. most spouses) can trace. No tapes to hide, no charges to explain, nothin' except maybe some Kleenex. That 99 cents shows up on a credit card bill somehow and, hard as you try go be discrete, someone figures it out eventually.
They caught music downloading while it was in its relative infancy and also made iTunes play so nice with the first uber-easy digital music player, the iPod. There's no special viewing device that a porn company to use to revolutionize it.
I'm not really sure you can adequately monetize that market right now. The house has left the barn.