How the big programs are helping the little guys?
 

Was chatting last night with an agent about the situation with models here, prices and shooting custom. Was very interesting.

The price for someone flying into Czech and shooting starts at around $400 a half day for solo, two girl, boy girl can be more depending. It can go up to $1,000 a scene for anal HC. Pierre Woodman and Gabbi Pontello pay more sometimes for a 2-3 hour scene.

Now you got to wonder why this is in a country where a secretary is paid $400 a month and a shop girl $300. Plus the girls are happy to work for less.

The reason is simple the big guys, Private, Hustler, Wicked, etc. Have worked out that if they keep prices low to increase there profits, it has the opposite effect. It brings in hundreds of little guys who can compete at $100 to $300 a day, but can't at $400 to $1,000 for half a day or a scene. So they ae left with less competition.

Yet on the Internet many the big programs are driving content prices down and down so the guy with $5,000 can buy enough to start a site and compete with them.

How many guys could have started paysites if the average price for a decent set was $100. Or an exclusive set was $600 or more?

I think we make more money with the market as it is. We just have more clients to sell to, better to sell a set 20 times at $35 than 5 times $100.

The big guys missed the boat, they could have shut the door on the little guy and dominated the business. Now they are fighting the other 80% of sites for traffic. Paying out fortunes to webmasters, entertaining them and coaxing them all to get traffic.

Anyone got any thoughts on it?

Good to know about Paul and the bargin basement! No charge for the spam... It's after 4:00 am here, I should be sleeping.

No this was an attempt at starting a serious chat, guess I should have put it elsewhere. :1orglaugh

Hmmm... I'd speculate that it happens the same way anything that becomes commoditized happens. Prices start high when there's few producers and they're still experimenting finding out what the right price point is and what the market will bear. Some others see their success and try to bust in by duplicating the originals, maybe undercutting some because there's big margins to be had.

Each additional entrant will bring the price lower, as more and more content becomes available, as all the producers want people to buy their product and deliver more incentives by adding value (either by dropping prices or delivering more per dollar).

Lower margins will inevitably mean that cost of production has to drop, so prices for content creation and management have to drop... although there are advances in reduction of overhead by improved business practices, improved availability of tools, reduced fixed overhead (bandwidth charges, for instance) so people can charge less and maintain margins. Eventually things settle down to the lowest price point where people can still make money (because once people stop making money, they start leaving the business) and you end up with a steady state price point for both provision and creation.

Pretty basic, really... happens with pretty much every market. Except diamonds... those fuckers got a stranglehold on the whole damn business and a great marketing campaign. :BangBang:

Rickholio
Good points, I can see how it happened from our end. But there are so many big programs basically buying anything at a low price that forces down the prices even more. Therefore letting in the guy with less money to spend.

If the big programs had made their money, re-invested it in good content at a real price they would have built themselves to a size and quality that most new guys, unless they had a lot of money, could not of competed with.

If you have a site of 5,000 sets/videos and the average price for a good one is $100. Then that becomes the starting price to compete. Nowadays you can buy that stuff in a blowout sale for $5,000

The new producers made the prices low, but the big programs all rushed to buy and pushed prices lower, so the established providers had to trim.

It's too late now to close the dor, but if they had of realised 2 years ago that pushing prices down would allow anyone to compete with them, would they have done it?

I don't know if it would have mattered if the big guys did things differently. First off, if I recall, the biggest players had really minimal online presence... they came into the game pretty late, after there was already a booming market and a proven customer base... but even if they were there at day one, if Heffner and Flynt et al came online the same day NCSA Mosaic appeared on the scene, I still think things would have ended up the same way it has.

At its simplest, porn is a bottomless (heh) infinately renewable resource. The barriers to entry weren't that great to begin with and nowadays literally anyone with a $250 digital camera and a host can produce tolerable content that can turn a profit, although probably a meagre one.

(Note: I am in no way meaning to denigrate the outstanding work of many of the industry's established content producers. Some of the stuff I've seen could function equally well in an art gallery as on a website, and all props are given duely. I'm only trying to say that the barriers to entry are so low now that nearly anyone can get in the game, although many can't survive in it!)

When you have a virtually limitless resource available to you, the value doesn't come from the resource itself. You have to value-add it. Where people end up making their money is on aggregation, delivery, and other convenience factors. Prices will always fall in a market scenario like that... it also explains why more obscure fetish/niche markets reap more profit per unit sold: higher ratio of demand vs. supply in that arena.

In order for the big players to have obtained a 'lock' in that environment would have meant they would have had to have tight control over most or all porn production... and that's just not physically possible. Where the big guys DO have an advantage, and may yet develop at least a proto-hegemony, is the fact that it costs money to develop those value-added services... in the end, by commoditizing the content itself, they're creating a barrier to entry for the actual services of categorization and delivery. Sort of like how water is more or less free from the tap, but people who bottle it and sell it can make some decent coin.

Downside to that, of course, is that anyone with a clue can just hop on kazaa now and spank away to random clips at any time, day or night. :winkwink:

-whew- Massive post from hell. :sleep