So this is our story in the adult biz so far...

[alf6300]

Your story is similar to my own, and look what happened to me (my own network, growing sites, expanding, etc) so I agree with you - there IS money in porn...

The issue for many when they say 'there is no money in porn" is their definition of "money". Example: $100,000 per year is not "money" to people who say that. No, $10,000,000 is "money".

But "real people" know full well that 100k a year is "money" for most people in this world....

Anyway great good luck and continued success! If I can ever be of assistance just reach out.

Good points MisterPeabody, and truly appreciate the nice words

Said this, I am a rather simple minded man, and it boils down for me to 2 key questions when judging a business - especially a startup:

1) Is it profitable? - Both p/l and cashflow-wise, i.e. are you left with more money in the bank at the end of quarter that you had at the beginning.

2) Is it scalable? - i.e., can you replicate/expand the hell out of what you are doing, or you are instead going to soon hit a roof, be it a roof in capital, customers/market potential, human resources, real estate, infrastructure, whatever.

If the answer to 1 is yes, you have a business model. If the answer to both 1 and 2 is yes, you have a really good business model.

When the answer to 2 is "no" or "not yet", you have to work on removing the roofs if possible.

Pretty basic/obvious stuff, but for me it means that when I judge the business model potential, if the answers to both 1) and 2) are yes, then I don't care too much if you are currently making 100,000 or 10,000,000. You are just scalable.

In practice, to be sure, I am aware that things are almost always more complicated because operations get in the way of scaling, and you typically need to rework stuff when hitting mass.

Talking about ourselves, I think we honestly need to work on removing some roofs - it would be unreasonable to think otherwise at this point in our development.

But I also think that we know, mostly, how to do that; fundamentals are sound; we are able to replicate; market is virtually unlimited; we are selling digital stuff, which makes things incredibly easier; we always ask ourselves "could we do this or that 10x or 100x; and we have a fairly clear vision on what to do next and how to do it.

PS: I would like to take this chance to reciprocate your nice words, and not just for the sake of being polite. I have observed what you did, and I am happy to acknowledge it has been in several ways a source of inspiration for us. Among other things you did right, is the distinct / very recognizable branding of your program, pretty clever if you ask me. Looking forward to have a chat anytime soon

[alf6300]

it's a nice story. The sites are sweet. it's a nice piece of work, that does remind us all of the period between 1998 and 2003.

but, it's a very specialized business model, with a lot of specific conditions (country of origin, content accquisition, costs profile, traffic costs, etc) that are not easily met.
[...]
if you folks think it is a copiable business model, then go ahead, copy it. there are clearly a few interesting ideas there that could be used. I'd say it's not very copiable.
[...]

Hey Bill8
I'd hope you were right, i.e. our stuff being unique and not copiable
I doubt it is the case, though.

While we probably innovated a bit in a couple of areas, there is no striking piece of genius nor unique algorithm or patent in what we are doing. I am not being modest, just realistic.

Just some decently ran operations by some not too dumb people, careful with money and a bit of solid business experience on their shoulders - and some sheer luck that always helps.

We have no secret sauce, only a combination of down-to-earth things that make an adult startup in 2012 possible and profitable.

[LeivaMedia]

@alf6300 Thanks this is a motivational and inspirational thread for my personal view I always want to make my own small paysite network with a trusted billing like CCBill and keep everything to my self. Reason im still waiting for Jason Forrest to pay me my 20K (see avatar)

Thanks again Alf

[VenzuelanChick]

I havent been around much lately and it is so nice to see a positive thread like this!

Thanks alf6300 and congrats.

[Bill8]

no man, what I meant was, the deep structure, the economic foundations, of your business model are not copiable by most webmasters.

The idea, the site designs, etc ARE all copiable, but we dont live in countries with supercheap content possibilities, cheap labor, cheap development and scripting costs, so on and so forth.

Especially the cheap original content is not easily copied. Any one of us here could buy eastern european content from the providers that are commonly available - but, that content is already well known, used by hundreds maybe thousands, and has a look and feel which is also well known to the surfers and the buyers.

Most of us are not likely to be able to safely move our business to a country where we can make that real-amateur-feel content as cheaply as you imply you can do.

Thats what we cant copy.

Their are a few ideas you have totally worth stealing - copying. The wordpress based paysites, with that amature look-and-feel. And, what you said about shooting content that isn't like the shitty canned scripts that we have all seen over and over again from teh bigger companies. (The tired "gonzo" crap that looks staged as fuck, with totally lame dickish male actors who don't know how to fuck - the girls who just look tiired and playing along for that extra few hundred bucks - no passion, no sex appeal, barely worth watching.) Trying to shoot more genuinely amateur stuff - thats worth copying.

Still, ultimately you are making a "boutique" product. It's not an answer to the "paysite problem", to the declining value of content, to declining conversions in general.

[alf6300]

Nice,i still remember zuzinka intro here on gfy,one of funniest intro threads,it was like teencat before teencat :D

yeah, i remembered that when i discovered that site was part of the program

I have that thread here and I am one finger away from bumping it ... I'd do it if there wasn't a thread against bumping old threads on the first GFY page

i can say that i am healing nicely - even reading my laptop screen is now close to 100% fine

That's awesome to here, I'll tell you how it goes for me :D

[alf6300]

no man, what I meant was, the deep structure, the economic foundations, of your business model are not copiable by most webmasters.

The idea, the site designs, etc ARE all copiable, but we dont live in countries with supercheap content possibilities, cheap labor, cheap development and scripting costs, so on and so forth.

Especially the cheap original content is not easily copied. Any one of us here could buy eastern european content from the providers that are commonly available - but, that content is already well known, used by hundreds maybe thousands, and has a look and feel which is also well known to the surfers and the buyers.

Most of us are not likely to be able to safely move our business to a country where we can make that real-amateur-feel content as cheaply as you imply you can do.

Thats what we cant copy.

Their are a few ideas you have totally worth stealing - copying. The wordpress based paysites, with that amature look-and-feel. And, what you said about shooting content that isn't like the shitty canned scripts that we have all seen over and over again from teh bigger companies. (The tired "gonzo" crap that looks staged as fuck, with totally lame dickish male actors who don't know how to fuck - the girls who just look tiired and playing along for that extra few hundred bucks - no passion, no sex appeal, barely worth watching.) Trying to shoot more genuinely amateur stuff - thats worth copying.

Still, ultimately you are making a "boutique" product. It's not an answer to the "paysite problem", to the declining value of content, to declining conversions in general.

hey
thanks for your comments, appreciated.
I understand that the location is important, i.e. running operations from an area with a good trade-off between labor cost, skills etc.

Said this, I suspect this is applicable to a number of industries - I don't feel that adult is too special here.

I worked for a while for IT companies in the U.S. (a decade ago or so), and it was a permanent struggle between keeping workforce in place or offshoring to competent Indian engineers willing to work for 1/10 the money. Each way had advantages and disadvantages.

In fact, a lot of the adult content published by U.S. based players is shot or bought elsewhere, that's something that not only anybody can do, but many are doing already... it's part of business planning to consider where you can best make your products.

Neither Apple nor MaDalton would probably be very successful if they chose to make their respective products in (say) Norway or any other high-cost labor environment.

I don't see this as dooming the smartphones industy or the adult industry.

[OG LennyT]

Inspirational post.. much appreciated!

[Barry-xlovecam]

There is money in this business but you need to understand the business -- a lot of people lament for the days of low hanging fruit ... Get over it ...

[AliceInBondageLand]

Thanks for a lot of sharing of information in this thread, folks. It is nice to read about positive stuff for a change.

My website is in the black after less then a year (including cameras, travel, models, etc). That feels very, very good.

[cariflav]

A couple of years ago I started meddling in adult.
I have done several online startups in the past 10 years, but none of them adult - I wanted to try out. In part for biz curiosity and in part for fun.

We setup a first paysite. It was not meant to be more than a side activity or a hobby for me.

The site turned out to be profitable from day 1.

The initial capital investment was 0 (zero) dollars.
(well, ok, I concede we paid the domain registration and a couple of bucks for the initial ignominiously cheap hosting)

The rest was setup by myself in my spare time. I threw together the site in php; I shot the content; the model was friend and business partner.

I had ran profitable businesses before: however, even in the first few months, this business had the best ratio of capital investments (none), effort (some weekends of fun), and profit return (not a goldmine yet, but sufficient to provide a decent living for a couple of people had it been my personal main job).

I guess we got lucky in several dimensions, and we did some things right the first time around. In my business experience, it almost never happens that you get things right the first time around.

So, a little more than one year ago, I decided to focus on this with much more time dedication and a business-rather-than-hobby mindset.

I put a (actually very little) capital in it, ditched or delegated other activities I had ongoing, and decided that this would be my next startup to make grow.

Armed with a back-of-the-envelop business plan, some friends willing to earn a buck in their spare time, and a lot of fun and dedication, we setup more sites. The guiding principle was more or less: what we have fun shooting, it might be fun for the surfer too, and they might buy it.

Everything that we touched turned out to be profitable.

We launched seven sites since then - I hear people complaining all the time about porn being dead, but this has been actually the easiest and most profitable business ride I've taken so far.

We are not anywhere yet in the ballpark of where I plan to be, but we've been growing every single month, >10% per month, with just a few motivated people and more money in the bank at the end of the month than at the beginning. Even more importantly, the growth is growing. And it's fun. I don't plan to publicly share figures, but we are at the point where we are discussing how to best reinvest the money earned. This, coming with no experience at all in the particular industry.

There is no money in porn? That's not our experience. I suspect there are a few other businesses out there that don't comment in the "porn is dead" threads just because they are too busy counting the money.

I am sharing this in part to contribute to the discussion, and in part because in order to truly expand I know we need to start seriously networking in the industry, so here we are.

Good luck to everybody.

I concur!!!!

Porn is not dead some porn business persons are dying, because they lack competitive advantages. From what I see the persons saying porn is dead are the ones not providing products that are uniquely desired by the market. If my research serves me will this industry is within the top ten in the world, with likes of IT, Gold, Oil etc.

There is money here, all is can offer is this; Have a great competitive advantage strategy.

[teomaxxx]

Good luck everybody, from rainy Prague!

Nazdar z Prahy taky. Would you be willing to go sometimes for a beer with me and my friend, two long time aff webmasters? Could be interesting to chat with you about your project and our own work...

[Nickatilynx]

I haven't been around in this industry long enough to comment on what has changed.

However, on a general note, it's rather common for entire industries to go through times of consolidation, following an early period of blossoming.

My understanding is that online porn had been a goldrush. Goldrushes, typically, make early pioneers either very rich or very complacent, or both.

When the dust settles, only some survive (the very ruthless, or the very skilled, or the very lucky). That does not necessarily mean that goldmines went dry.

I had a coffee weeks ago with the owner of a greatly successful adult venture, one of the historical brands of online porn.
We exchanged some figures, as it happens. I was polite but probably quite blunt in showing my feelings.

He's a very decent many, and an awesome photographer. He has earned over the years a sort of cult following for his flagship website, together with a very faithful membership.

In short, he could run today an awesomely profitable balance sheet. He does not.

He told me about the workstyle he's used to. I wouldn't call him lazy, but he got the habit over the years to only work some days a week. They mostly shoot outdoors, often in exotic locations, but he rents a football-field sized studio that he seldom uses. Also his labour cost structure is way oversized compared to his needs and the dimension of his business. And they are still promoting through the same marketing channels that were rampant ten years ago.

I am not patronizing or blaming anybody, I guess I could easily have done the same mistakes had I been in his shoes throughout his business history. In fact, I have done some of those same mistakes in other industries myself, and hopefully learned a bit.

To answer your question about what we may be doing right, and perhaps others might not - in short: we did not have the time or luxury, so far, to grow complacent.
We check every dollar spent, and we permanently ask ourselves how we could do things faster, better, cheaper, more efficiently. We ask ourselves what are the opportunities we are not currently seizing, and what we could do about it. What direction the market is going, and what mistakes we have made or we could make. That's just business as usual when running a business, especially a young one. It might not be business as usual during a goldrush, and maybe some still have a goldrush mindset.

I know it sounds like a rather generic answer, but it's honest and it's stuff that I am thinking about every day.

I do have an opinion about your second point, i.e. where the "paysite model" will go in the next 5 years. I'll share it in some other post, I guess, since this one is already long :-)

thanks for the opportunity of a fruitful conversation.

Firstly can I say great thread!

A rare thread that pulls me in from the dark. ;-)

Taking your analogy...which was indeed used since my early days in 1995.

Most independent gold miners did not make the real money during the gold rush.

The "real" money was made by the miners that switched and used the goldrush to open banks , stores and anxilliary other products or the people that arrived to the towns to do the same.

I was here for the gold rush , and yes, made a fortune. spent a lot too I am still here , honestly probably by a combinationation of ruthlessness , skill and luck. ;-))

But then I adapted and changed. I concentrate on traffic , never really was a "porner" as such. I saw a relatively cheap way of showing a product, any product, (yes , initially adult entertainment was that product and still earns very very well) to literally millions of people rapidly with little cost.

Again can I say how much I love yr enthusiasm , optimism and your enquiring mind.

Had to chirp in

Congrats on your success.

[webgurl]

This is a good thread, and nice chatting with you last month. Cheers

[alf6300]

Nazdar z Prahy taky. Would you be willing to go sometimes for a beer with me and my friend, two long time aff webmasters? Could be interesting to chat with you about your project and our own work...

Nazdar zpatky do Prahy :-)
we are close to riegerovy sady, how about a beer there in the late afternoon today or tomorrow, if you guys are around?

[teomaxxx]

Nazdar zpatky do Prahy :-)
we are close to riegerovy sady, how about a beer there in the late afternoon today or tomorrow, if you guys are around?

Unfortunately, I am going away next week and today i have to spent some time with my GF :-), but I will hit you up on the ICQ after 13.8, ok?

[alf6300]

Unfortunately, I am going away next week and today i have to spent some time with my GF :-), but I will hit you up on the ICQ after 13.8, ok?

Wonderful, have fun and looking forward!

[Bill8]

One aspect to keep in mind is when they're grinding through affiliates at $40 per signup, and things like cross-sells, etc.. where the paysite model was mostly about maximum revenue per customer up front than it was ever about the actual sites + content. His sites differ in that respect, and he likely makes a whole lot less than they did even in the long term. Sites like his aren't as affected by rapid changes in finance.

so, you're saying the old paysite model was based on volume and exploitation of the customer?

that sounds true. we all knew that, and went along with it.

"likely makes a whole lot less than they did even in the long term." - that also sounds true.

again, we are talking about moving from a big store product and business model, to a boutique "off the beaten path" product and business model.

do you figure he's getting his major traffic from the tubes? doing the whole "little content shooter going straight to the tubes" thing?

[Bill8]

I do have an opinion about your second point, i.e. where the "paysite model" will go in the next 5 years. I'll share it in some other post, I guess, since this one is already long :-)

thanks for the opportunity of a fruitful conversation.

good, I hope you will say something about that - because it's one of the things that not many people seem to be talking about.

on another board i was talking about what they call in mainstream television production "the HBO solution" - HBO, a premium TV channel in the US, carved out a niche making higher quality TV series that people would pay a premium for.

[ClaireMonroe]

There is no money in porn? That's not our experience. I suspect there are a few other businesses out there that don't comment in the "porn is dead" threads just because they are too busy counting the money.

Great post! People say the same thing about phone sex yet here I am not working outside the home and enjoying my so-called "job"

[sobecash]

Congrats

[erikwil]

Hi alf6300,

I just started my own (as yet still small) website and of course got a bit depressed when nobody signed up, thinking why did I waste all my time and money on this. I read this thread and it got me cheered up again, a lot of your ideas are the same as mine. Then I clicked to see what sites you run - and of all the porn sites on the internet it happened to be the sites that inspired me to start my own website six months ago! (Czech girls in pov, I can do that I thought! And I did) What an amazing coincidence and I really would like to talk to you on icq or mail.

Thanks!

Erik

[CDSmith]

Threads like this deserve to be at the top.


I've found myself wondering of late just how many pages the book would be were I ever to map out all my time working online, in adult, etc. Don't worry, all those whose secrets I've been keeping, your dirt is still safe with me. :D