Current State of the Adult Industry as I see it... Do you agree? - GoFuckYourself.com

OMG Jim · 01-11-2008, 10:09 AM

I came into the online adult industry about two and a half years ago with both Fortune 500 experience and business ownership experience at many levels. My perception is that 2006-2007 was a time when a lot of new technology was still pushing growth and activity with every program scrambling to keep up with status quo.

Now that most companies have caught up technology wise with all the standard marketing display tools and content delivery systems being offered I think that three things have happened.

First, 2007 saw the advent of the tubesite business model that has proven to be a major problem for the industry to deal with. Anti-piiracy groups have been formed and companies have emerged to combat the rampant theft of content being used by these type of sites. New variations of this business model are emerging and there will be a period of testing and adaptation. DRM will be a major area of discussion.

Second, the industry continues to grow at the entry level with new websites and programs appearing daily. I think that consumer spending on adult has not increased proportionally meaning that the pie is being split by more people. This has hit the companies with smaller margins the hardest and has caused many of the smaller under-capitalized operations to either sell, consolidate or close shop.

Third, the time is right for consolidation. Over the past 5 to 10 years those companies that have been most successful are the ones that have a proven formula and have grown their businesses to a level that rather than push for growth they are now able to buy it.

What I see coming this year is many of the larger companies diversifying and growing their offerings through acquisition rather than innovation while the content sector continues to grow by producing the products that the consumer is willing to spend their money on.

There are many niches ripe for development for content producers and it is up to the program owner/operators to determine which content will provide the best return for their particular type of customer and business model.

Just my 2 cents worth.:wavey:

tony286 · 01-11-2008, 10:50 AM

You have a good points, I saw what your talking about when I was a executive recruiter for the gaming industry. When I started casinos were popping up all over the country,lots of companies.The buy outs just started when I left. Now a few companies own or run almost all of them. I would hate to be a headhunter in that industry now. Man my wish is some great big company wants to start a bbw division and buys us.

Cyndalie · 01-11-2008, 10:54 AM

After 10 years in this biz full time I agree with many of your observations, mostly because it has been the same trend for the past 5 years. Tube sites, viral content, and community sites being the latst big trends presenting the most challenges for capitalization. Those that can and do find ways to make them profitable will be the trendsetters for 2008

CuriousToyBoy · 01-11-2008, 10:56 AM

There's still no money in porn Jim, you know that.

;-)

01-11-2008, 10:09 AM	#1
OMG Jim Confirmed User Industry Role: Join Date: Oct 2005 Location: Atlanta Posts: 3,153	Current State of the Adult Industry as I see it... Do you agree? I came into the online adult industry about two and a half years ago with both Fortune 500 experience and business ownership experience at many levels. My perception is that 2006-2007 was a time when a lot of new technology was still pushing growth and activity with every program scrambling to keep up with status quo. Now that most companies have caught up technology wise with all the standard marketing display tools and content delivery systems being offered I think that three things have happened. First, 2007 saw the advent of the tubesite business model that has proven to be a major problem for the industry to deal with. Anti-piiracy groups have been formed and companies have emerged to combat the rampant theft of content being used by these type of sites. New variations of this business model are emerging and there will be a period of testing and adaptation. DRM will be a major area of discussion. Second, the industry continues to grow at the entry level with new websites and programs appearing daily. I think that consumer spending on adult has not increased proportionally meaning that the pie is being split by more people. This has hit the companies with smaller margins the hardest and has caused many of the smaller under-capitalized operations to either sell, consolidate or close shop. Third, the time is right for consolidation. Over the past 5 to 10 years those companies that have been most successful are the ones that have a proven formula and have grown their businesses to a level that rather than push for growth they are now able to buy it. What I see coming this year is many of the larger companies diversifying and growing their offerings through acquisition rather than innovation while the content sector continues to grow by producing the products that the consumer is willing to spend their money on. There are many niches ripe for development for content producers and it is up to the program owner/operators to determine which content will provide the best return for their particular type of customer and business model. Just my 2 cents worth.:wavey: __________________ ICQ: 254 914 537 - Skype: AlmightyJim

01-11-2008, 10:54 AM	#3
Cyndalie Confirmed User Industry Role: Join Date: Jan 2002 Location: Cherry Hill, NJ Posts: 3,615	After 10 years in this biz full time I agree with many of your observations, mostly because it has been the same trend for the past 5 years. Tube sites, viral content, and community sites being the latst big trends presenting the most challenges for capitalization. Those that can and do find ways to make them profitable will be the trendsetters for 2008 __________________ Cyndalie Marketing Director StoriesTraffic.com

01-11-2008, 10:56 AM	#4
CuriousToyBoy Crazy Aussie Bastard Industry Role: Join Date: Aug 2005 Location: Wherever I lay my hat, that's my home. Posts: 16,787	There's still no money in porn Jim, you know that. ;-) __________________ Celebs Adult Who's Who ==> Ambush Interview ==> ICQ 293 070 684 ==> intmarpacrim AT gmail DOT com

01-11-2008, 10:50 AM	#2
tony286 lurker Industry Role: Join Date: Aug 2002 Location: atlanta Posts: 57,021	You have a good points, I saw what your talking about when I was a executive recruiter for the gaming industry. When I started casinos were popping up all over the country,lots of companies.The buy outs just started when I left. Now a few companies own or run almost all of them. I would hate to be a headhunter in that industry now. Man my wish is some great big company wants to start a bbw division and buys us.