By:
Tery Spataro, president of Mind Arrays, tery@mindarrays.com
Las
Vegas, Nevada – Lately the online adult entertainment industry has received
attention from the press on the profitability of their Internet business
practices. I wondered what it is that the adult entertainment industry is doing
differently from the mainstream Internet. It was curiosity that brought me to
Las Vegas for the Internext Conference, as well as an invitation from Stephanie
Schwab, CEO of Erotigo. I had some
interesting preconceived ideas as to what I would see on the trade floor, and
understandably a little nervous for it was my first time.
As we
registered for the event I took note of the backdrop of adult entertainment
industry banners and flags which surrounded us. In sharp contrast, the people
staffing the registration booths were old enough to be my grandmother. I wondered what they were thinking.
June
26th was the opening of the conference. The registration line was
long with both suits and polo shirts intertwined. They didn’t look much
different than Internet attendees to Internet World conferences. I did not see a single
gold-chained-leisure-suit wearer with a bad hairpiece. As you entered the
conference you were greeted by cheerleaders who pushed conference take-away
goodies at you. As we entered the floor Stephanie told me this was her third
conference and she had many stories to tell about the first two. She bated me
with intriguing tales of all night parties, swinger clubs, photo shoots and
pole dancers. So, if you pardon the pun, I was very excited. We circled around
the conference trade floor looking for the pole dancers, bed displays, and
other outrageous things you don’t find at the mainstream Internet conferences.
Of course girls--beautiful well-constructed girls--were everywhere! And then of
course there were the boys too--handsome and well built.
That
afternoon we attended a seminar titled, “Women On The Net”, moderated by Fred
Lane, author of “Obscene Profits: The Entrepreneurs of Pornography in the Cyber
Age” (Routledge 2000). Strong, smart advice came from key women entrepreneurs
of the adult entertainment industry, which consisted of famed
marketing
and sales VP) and Phyllis Heppenstall (PeeKay,
Inc.). The audience asked some very straightforward questions about women
getting started in the business. Much to my surprise, the percentage of women
business owners in the industry is 30%. Legal issues were discussed. The panelist
urged everyone from the industry to get involved with legal issues and
government. One curious male attendee asked “how do you treat the models?”
Response from the panel as well as the audience was “you treat the models with RESPECT! Duh!” After the panel ended I
caught up with Jane Duvall of Jane’s Guide who suggested that “men need to
experience what women experience” and gave detailed instructions on how men
should do it. It would be inappropriate for me to print exactly what Jane
suggested in this mainstream article, but if you would like to know you could
email me directly.
The
mainstream web could learn a lot from adult web industry’s affiliate programs. Wasteland CEO Colin Rowntree, IGallery
president Scott Schalin, Python CEO David van der Poel and Vivid Video marketing VP David Schlesinger gave great advice on affiliate
programs. They described the four main
types of affiliate programs: flat pay out, click through, recurring and revenue
sharing. All agreed that revenue sharing is the road to increased usage,
signup, and more profit! Average customer retention in the adult industry is
2-6 months there are few dollars used to re-market to existing customers. Also,
panelists noted that there’s no such thing as “free” in this industry--it’s all
about hooking-in and keeping turned-on for as long as the content is good and
the services function.
Other
panels discussed legal issues. This industry wants to stay around for a long
time so it’s respecting the many complex laws that deal with pornography. EACH state has it’s own laws; if you
are thinking about getting into the
business, you should understand the legal issues of the state you choose to
do business in as well as with. Most
importantly: find a great lawyer that really understands the business.
Internext
concluded with the Player’s Ball party at Venetian’s CK Club. The theme was
“Pimp and Ho” which extended to the expected dress code. Not having the
wardrobe that would fit either scenario, I decided my elegant Tracy Faith dress
and Donna Karen heels made me look more like an aspiring madam than hooker or
pimp. We had VIP passes, yet the wait in line was an hour and half. I spent
that time head-turning at the wide variety of theme costumes. My favorite was
the young man dressed in full white pimp suit with wide brim hat and cane to
match ala the 1970’s. The doors opened
and we were ushered into the club and waited another hour for Snoop Doggy Dog
to perform. The costume party was fun and entertaining.
And
after three full days and nights of the conference (although in Vegas there is
no such thing as day or night) did I see any pole dancers? Did I see outrageous
displays of sexual exploitation? Amazingly, NO! After a while of being exposed I became desensitized. There was
nothing that left a lasting impression and to be honest I was a little bored.
But I have to admit, the most shocking revelation was in fact, The Business was all about business and
all about the bottom line…Profitability!
