In many ways, the sex acts that occur in front of the camera in porn have remained relatively static over the years. What has changed is how viewers are accessing these images on computers, TVs, cellphones and now VR headsets that support ever-greater resolution and processing power.
While the vast majority of pornographic consumption now occurs online, the different portals consumers use to access this content continues to branch into different channels. As technology and trends change, some of these revenue streams dry up or hit a damn, while others open up. The companies that thrive are those that continually come up with creative ways to tap into these outlets.
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XBIZ reached out to the heads of some of the most successful and innovative companies in adult entertainment to map out the different online modalities they are using to distribute their products.
Specifically, we asked how they have adapted their business models to profit off of current distribution trends in digital media, streaming video, VOD, paysites, OTT content and beyond. The deluge of answers we received helps chart out the current marketplace, while also hinting at where online distribution is heading.
Kelly Holland, CEO of Penthouse Global Media, Inc., noted that her company has remained viable by offering a wide variety of products in an array of formats.
“We are the largest adult broadcaster in the world with 10 linear channels in over 100 countries,” Holland said. “Additionally, we are beginning to offer our own digital VOD streaming channels as an OTT offering.”
However, Holland’s primary focus is not on pioneering new online outlets. Her first concern is on building Penthouse’s iconic brand so that consumers will continue to seek their products on various outlets.
“As a 50-year-old, iconic brand our strategy for success is to connect with our historic legacy fans as well as develop a new generation of fans,” Holland said. “Our focus is not to sell a video but rather to create a broader offering for our community. That includes video, licensed products, the magazine, e-commerce products and, soon, brick and mortar experiences.”
In order for Penthouse to build their brand, Holland makes sure her team keeps up with digital marketing trends.
“With all of these products we use a combination of direct marketing, a strong social media presence and the marketing power of all of our Penthouse Pets,” Holland said. “I think selling ‘products’ is a tough challenge in a marketplace of almost limitless products so our success comes in understanding the power and synergy of the brand and marketing the brand is first and foremost.”
Tony Cochi, executive vice president of LFP Broadcasting, said that consumers are willing to pay for the high-quality content Hustler produces. The trick is understanding how to package that content.
“With the decline of home video, we have shifted to a Hollywood studio model whereby we window content across broadcast television, home video and online distribution,” Cochi said. “Digital is a key element in all of this as consumers want a multi-platform experience. Even with broadcast television, we grant TV Everywhere rights so that a consumer can buy a movie and watch it on their TV, computer, phone, etc.”
Ilan Bunimovitz, CEO of GameLink, pointed out that while his company is known for their flagship VOD site, GameLink.com, they are actually in the business of extending their e-commerce platform and services to brands that sell an assortment of products.
“By building an e-commerce ecosystem,” Bunimovitz said, “we can sell across the lifespan of a users’ adult needs as they migrate from one product to another. What this means for us and our partners is that we can sell a customer a VOD, then a toy, then a membership subscription, then a lube, then a chat session — all under one roof.”
GameLink has come to understand the concept of “content” to mean an “erotic experience.” While VOD still plays a major role in GameLink’s business model, they have expanded to manage the distribution of physical products.
“Our growth is coming from our partners’ focus on novelties, and the majority of those sales come through the successful management of other brands’ online stores,” Bunimovitz said. “As the market continues to fragment and as technology evolves faster, it’s critical to remain focused on core value propositions: presenting the right products to customers and delivering them in the timeliest way.”
Adam Grayson, chief financial officer for Evil Angel, said that their company’s goal, first and foremost, is to create content viewers want to buy and a brand consumers trust.
“Really, the most important thing we do is keep the brand elevated and make sure fans associate us with their erections,” Grayson said.
However, Evil Angel also actively adapts to the ever-shifting marketplace.
“Everyone is always trying to identify gaps between demand and supply and create content that fills those gaps,” Grayson said. “We're always creating marketing materials that are most effective on digital so that people feel that uncontrollable urge to click.”
Tim Valenti, president of Falcon Studios Group/NakedSword, also puts an emphasis on the importance of creating a superior product and building a reputable brand. Recently, he has tried to reach more mainstream audiences by creating quality features, like Falcon’s new film “Earthbound.”
“We are positioning our content so that it lives both entrenched in the adult space as premium content, but can also attract the attention of new viewers who appreciate the original concepts and exceptional quality of our movies,” Valenti said. “These type of feature movies not only sell better on DVD and online, but they also tend to do better in digital broadcasting like on cable and VOD.”
Valenti has also applied this strategy to NakedSword.
“We have evolved and developed NakedSword Film Works (NSFW) which features the best indie shorts and features from gay cinema,” Valenti said. “This expands our audience to indie film lovers who appreciate great LGBTQ-themed content, making us live up to our reputation as the ‘Netflix of Gay Porn.’”
Jake Jaxson, CEO of Cockyboys, recognized that, increasingly, the issue of online distribution has more to do with outperforming mainstream content.
“More and more, we are not really competing with other porn studios, but rather all the socials, gaming, Netflix,” Jaxson said. “As such, [consumers] are now either seeking what I call their ‘taboo rush’ (hence the rise of ‘fauxcest’) or they want more advanced porn, storytelling that can basically walk and chew gum at the same time. We have chosen to focus on the latter. Gay porn that is as connected and authentic as we can get, while still making it glow and shine as something special.”
James Deen, owner of JamesDeen.com, is a prime example of a digital native whose business has always been structured around a web-first model. For Deen, offline sales have always been secondary and something he outsources to companies with proven sales records. He still follows the same business plan for each brand he launches.
“James Deen Productions was originally a VOD, pay-per-scene based company using a white label under the URL JamesDeenVOD.com,” Deen said. “Eventually that expanded to the streaming site JamesDeen.com, and years later to the DVD market. I follow this same model with every brand I create. For example, Analized.com was started almost a year ago as a streaming website, but did not enter the DVD market until spring of this year.”
Kristel Penn, marketing and editorial director at Grooby, seeks to strike a balance between testing new platforms without diverting too many resources from what has proven to work for their customers.
“There’s a multitude of new platforms to utilize and we discovered our customers don’t always use a single portal to purchase their porn,” Penn said. “We live in an age of choice, and we are working to ensure our customers can find our content in a format that suits their needs.”
Grooby posts select content on other VOD and clip sites. However, their main focus, and revenue stream, continues to be their paysites, which they are constantly updating.
“Internally, we share customer feedback and discuss regularly how we can keep our members happy and engaged,” Penn said. “We make sure our customers know we're a presence online and that we're accessible.”
Jules Jordan, owner of JulesJordan.com, noted that, like Grooby, his company is primarily concerned with creating the highest quality experience for users.
“We pride ourselves in providing beautiful 4K content at great bit rates,” Jordan said. “People are always searching for the best resolution at respectable download times. Our ‘movie site’ JulesJordanVideo.com is a great portal to upsell from. We have great quality trailers and photo galleries available there. We give users the option to download VOD of our full movies and new releases with as few clicks as possible.”
Wendy Crawford, owner of Adult Source Media, noted the importance of exploring new online platforms, while also exercising caution in these realms.
“If I had to give any advice to companies coming into the market now,” Crawford said, “I would say make sure that you choose a good, strong agent, who will negotiate the best terms available, and continue to fight for the best placement possible for you on those sites and channels.”
Matt Slusarenko, director of marketing and business development for Kink.com, mentioned the importance of maintaining a single unified site, as opposed to dozens of individual sites, as this allows visitors access to a huge library of BDSM content with a single, monthly pass. He also acknowledged the importance of testing new niches in order to widen Kink’s appeal.
“Consumer sexuality is broad, and as such, we’re broadening our market,” Slusarenko said. “In doing testing, we discovered BDSM consumers are willing to pay more to get more, and this new strategy reflects that. We’ve also empowered directors with their own studios so they can focus on new channels with fresh ideas and higher production values.”
Kendra Lust, owner of Lust Army Productions, places her company’s focus on building a strong media presence and tapping into different markets to maximize sales.
“We are involved in broadcast sales, DVD distribution and offer content access on various VOD and online affiliate sites,” Lust said. “We are currently working on a new platform that will expand Lust Army Productions into including the company’s many faceted divisions.”
