The result is a situation in which sales opportunities abound but more work than ever is required to capitalize on them. Add in the fact that most companies couldn't begin to manage global sales across multiple distribution platforms even if they wanted to, and you have a classic case of a problem in search of a solution.
Enter a new generation of savvy content brokers, hungry nomadic middlemen who scour the globe for sales opportunities in the multifarious food chain of adult digital content delivery. These high-tech gypsies not only squeeze extra dollars out of digital content — sometimes a lot of them — but also serve a fundamental role in identifying and often creating new markets, which they then vigorously exploit.
One of the new entrepreneurs is Marc Duvall, an enterprising Danish 20-something with an easy smile and laid-back style, whose company Pinelake Limited (www.adultlicenses.com) has its offices located on the Seychelles, a nation of 100-plus islands in the Indian Ocean. Duvall sat down with XBIZ at the recent Adult Online Europe trade show in Amsterdam to talk content brokering, something he has been doing professionally for only three years.
XBIZ: How did you get started in the biz?
MARC DUVALL: I started as a producer. I made three movies in Budapest that cost me a lot of money. I was shooting in a huge mansion in these beautiful rooms and I really liked my own content. But then I came to understand that nobody cares. It's just content, just fucking; I didn't have anything special. I think if [content producers] can understand that point their distribution will get much better.
XBIZ: So what do you do now?
MD: I work for Pinelake Limited, which is my own company, and for a satellite broadcast company in which I am a partner. Pinelake's main purpose is content brokering.
XBIZ: Are there a lot of people who do what you do?
MD: I don't think so.
XBIZ: Where do you get your content?
MD: From studios and distributors. In Europe, I get content from [distribution] warehouses. In the U.S., directly from producers or the production companies, because of the simple fact that producers are easier to find in the U.S. than they are in Europe, because of their extensive marketing.
XBIZ: Are you saying that the U.S. producers brand themselves better than Europeans?
MD: Yes, if they are good brands you find them very quickly. The Europeans can have very beautiful brands and nobody has heard of them.
XBIZ: Do they care less about branding because of how business is done in Europe?
MD: I think the main reason is that they usually know a distributor in their own country, who is usually the biggest one there — so I just think that they go for the easy solution and get hired as producers or have a small brand they develop inside the warehouse.
XBIZ: But when they become interested in distributing into the States, do they need to then brand themselves?
MD: Yes, or they go through the distribution house, which has already established itself with cross-deals in the States.
XBIZ: How much European product is being sold in the U.S. right now?
MD: Less than the opposite way; much, much less. It is all Americans pushing content into Europe. The only way you can find European content in America is when the Americans go to Budapest or Prague and shoot there.
XBIZ: How many studios do you work with?
MD: About 20.
XBIZ: What is a typical deal?
MD: In a typical deal I acquire less than 50 movies and only distribute them to one or two [distribution] companies, which could be anywhere. I never get all the rights and really I don't want them, because then I put myself in the situation where I have to guarantee sales for the studios. Basically I want product that I can put in my pile of content, and then when I release it they make some money. It's very simple. I'm extra revenue for [the studios]. Usually they already have their content on AEBN and Hot Movies [for video-on-demand], but when it comes to affiliate programs they're lost. They don't know what it's all about.
XBIZ: So what's the overall trend in content sales?
MD: The HD format could have an impact on the market and maybe because of the brilliant image, consumers may want a good porn movie and buy something that's worth looking at. But I don't think it's going to be gonzo studios that brand themselves on HD, but producers of features — Vivid and companies like that. Generally, of course, DVD sales are way down and I'm seeing the people in that business getting more and more confused regarding the Internet, and I see them losing [ground] all the time. Eventually, they will start firing people and cutting back, and then that's the beginning of the end for them.
XBIZ: What should they do?
MD: They need to go to a convention like AOE, XBIZ or Internext, sit down and find a webmaster or company they can merge with. The problem is simply that their technical know-how is limited to sending emails. I'm not trying to attack anyone, but it's true. Their experience is limited to screening on VHS and saying yes or no based on that. And at the same time, they are used to being big and profitable and the dominant factor in porn. They have been there for the last 20 years and no one is going to tell them how to do it now. But that [attitude] makes it so that they will not go to a convention and start to ask questions, because they think they have all the answers.
XBIZ: Do you think the quality of content matters, or is there a market for everything?
MD: Yes, there is a market for everything, because when you look at paysites everyone wants every niche, so this market is simply incredible. It keeps growing all the time. There's room for everyone.
XBIZ: What is the online marketplace like now? Where is it going?
MD: I think it's growing. I find more and more affiliate programs and I'm always amazed when I find a new program that has a hundred sites I never knew before. And this is on a weekly basis! Right now I work with about 70 programs.
XBIZ: Who drives the market?
MD: No one, everyone.
XBIZ: Any worries for the future?
MD: I hope DVDs will continue to exist, and also that HD will save them, because I need them. I need their product for the Internet and vice-versa. As long as DVDs continue to exist, and IPTV emerges, I'll have five markets instead of four to sell to: Internet, DVD, Cable/Satellite, hotels and cruise ships.
XBIZ: Cruise ships?
MD: We have not started to work in yet, but it's the fastest-growing tourism business today and the ships are massive. When 1,000 or 5,000 people are boarding a ship, they have to do something while they are at sea. And each room has a TV and most likely there is a pay service. So of course someone has to deliver the content.
XBIZ: That's true. Are there any new markets opening up that surprise you?
MD: Well, I think Dubai could be one of the first Middle East countries to take in adult content, but that's just the start. I heard that cargo ships are going to Dubai with smart cards that are used to intercept and decrypt satellite porn channels for television. Those cards get into Iran and Saudi Arabia from Dubai on camelback. They can get killed for that. So we have some very enthusiastic people out there, and I think those camel riders are making a fortune, and they're in the porn business and nobody knows about them.
XBIZ: I'm not surprised. What about China?
MD: We can only hope that China will take down its firewall one day. We will all have happy days.
XBIZ: I will do my best to get a copy of this interview into General Secretary Hu Jintao's hands.
