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From Pages 91-2 of the Report
xi. MidniteMonkey
midnitemonkey_brand_header
Juniper Research interviewed Jasper Steele and Rowdy Oh, co-founders,
MidniteMonkey
The privately-owned MidniteMonkey launched in May 2007 and is one of the
first adult service providers which has specifically targeted the US market.
Given the lack of age-verification services in the US, the company is
obliged to offer its adult content solely off-portal, although it does have
"U-rated" bikini and lingerie content which it is selling to the carriers.
MidniteMonkey sources content from various content providers (including, in
the first publicly announced deal, the Adventures of Porno Dan) and offers
its subscribers unlimited access to its library of streamed video services.
MidniteMonkey.com also plans to add licensed content that covers the gay and interracial content niches in Q4 2007.
Access to the service costs $4.99 for the first month and $14.99 thereafter.
MidniteMonkey exectutives Jasper Steele and Rowdy Oh said that while the
company had the ability to offer various billing options, they hose the
subscription model "since it dominates the current billing option in mobile
video services today". Given the restrictions on payments in the US, credit
card billing was essentially the only viable option Elaborating on the
retail price strategy, Steele said said that the company's aim:
"Was to make the first month a low barrier of entry for the US, to us it was
a fair market price for access to an unlimited library of content, for the
same price as one DVD. That positions our services in a value proposition,
and we believe value drives adoption."[1]
The company feels that, thus far, the strategy has been successful, with
churn rates lower than for either other mobile services or for adult
broadband services, although Steele did sound a cautionary note:
"We've seen a very low churn rate compared to other mobile services. Churn
for other services is 20-30 per cent, we are running at less than 10 per
cent, but because we are six months young, we need another six months for an accurate comparison. Now, if we were to compare why we have lower churn than, say, broadband, it's because there is a great deal of competition in the broadband space, therefore giving customers plenty of reasons to leave
one service for another, and as a service provider you're also challenged by
a lot of free content that is pervasive. Right now on mobile in the US,
there's a limited number of competitors. From our perspective, firstly, we
have to continually deliver content that meets customers' interests,
secondly, the video content must be flawless and available on any video
capable device, and third, pricing has to be right. If we can do this... we
should do well against churn..."[2]
MidniteMonkey primarily markets its services via mobile search engines.
While, said Steele, no advertising media were out of the question,
"We're finding that's it difficult for the user to jump from seeing a banner
ad on broadband, and go on to click through onto the mobile; as long as you
can market on the same platform, that's the greatest success we've had so
far..."[3]
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