Anno2004

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Until there is a direct and visible correlation between internet piracy and lost profits, I doubt much will be done. When something is done, the nearly complete lack of internet legal precedents will be the next hurdle. Keep in mind that most law makers tend to be older and are usually lacking in technological knowledge.

I'd compare this situation with the one that music companies are facing. They have sunk millions into eliminating online piracy, which thus far has had very little effect. It's kind of like the "War on Drugs" - a completely unwinnable situation.

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Taylor Lynn Yahoo Group

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this whole new thing of VOD download and ppv streaming is growing like wildfire - they'll be stolen from again - why - because the sharks of the Internet know they can get away with it.

file trading between individuals is almost impossible to stop, AVS's and paysites can be stopped in a day's time. just takes a little effort and being aware of things going on on the Internet.

Only two studios make more money than DeluxePass and AdultBouncer, Hustler and VIVID, and i'm pretty sure VIVID is well within the range of both of them.

DeluxePass' huge success is almost completely derived from Redlight District Video. Redlight finally woke up.
The studios refuse to understand what they have is gold - content is everything these days.

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where the movie studios are getting their asses raped is on the World Wide Web - that's where huge money is being made off the outright theft and exploitation of their intellectual property.

i had heard that WestCoastProductions had a major lawsuit prepared against a very famous interracial paysite - to the tune of millions of dollars - not long ago somebody told me that case never went to court and WCP got nothing.
i don't understand how that happened. I commented to my source 'well most likely they decided to settle out of court and got a decent settlement' - the person said no, not from what he heard.

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Taylor Lynn Yahoo Group

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I recently killed my deal with adultlegal, so I could get a better control of my stuff on the internet.

But the reality is, that it is a never ending fight to stay up on all the internet thieves out there.

The best anyone can do is nail a couple of the big guys and hope it deters the other from ripping you off.

Mike Rubinstein
Devil's Film

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the VOD download and streaming rental/purchase of high quality porn movies is the future - the old montly membership subscription model is on its last legs. Producers of good porn will rule the day on the Internet soon.

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Giving away 70-80% of your VOD money just because the gamelink's of the world have the technology is the next hurdle for the adult companies to get past.

At some point, companies must control all of their content to stay alive.

Mike Rubinstein
Devil's Film

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i agree that 20-30% is not enough - 50% of net profits though is fair. defining what is net profit of course is important.

i hear gamelink might be in trouble, people not getting paid - they've lost the battle to AEBN. why has AEBN succeeded - because they understood that they had to do business with the webmasters who control most of the porn traffic on the web, lots of promotional tools, a decent affiliate program and just plain old networking.

there are so many of these VOD things popping up i can't keep track of them all anymore. i know that pretty much every major adult Internet affiliate program either have one or are developing one. it's a copycat business.

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I wanted to throw in my two cents being an actual operator of a JANS! and Adultbouncer site.

To clear things up first of all, the AVSes do not pay adultlegal a one time fee to distribute their content across hundreds of sites. The agreements are done through another party in coalition with the studios who receive a monthly percentage of the AVS profits. Rather than a one time fee, the studios get a recurring fee.

Frankly, I am sick and tired of all the AVS bashing going on. From a customer standpoint, AVSes are great bargains and it helps introduce customers to content they otherwise would never watch due to the high price.

BUT, I won't say AVSes are perfect. Far from it. I think the model has huge flaws but so does the current business practices of various studios. It is futile to pit AVSes against studios. The two could help each other out for huge potential profit if done right.

Firstly, I agree with Mutt that many studios are slow to adapt to the new technology. Even though some have adapted quickly, they use the technology in the wrong ways. For example, VOD and streaming PPV - both great technologies that should be the way of the future, but currently priced way too high. A VOD movie costs $8-$12. Only a fraction compared to the full retail price of an adult DVD, but when compared to discounted prices, they are the same. Then compare that to online mail-order DVD rentals at $1-$3. A more suitable price would be $3 or so.

I also think streaming is crap. As a customer, I hate streaming. It takes forever to scan forward or backward in a movie because of the buffering. Even with broadband, streaming is not a viable option if DVD-quality is wanted. As a webmaster, it eats up huge amounts of bandwidth having members keep redownloading the clip. downloaded VOD makes more sense.

Recall that Mutt said content is crown prince. Unfortunately, few want to pay $12 for crappy content. That's why pricing should be more reasonable. It's exactly the same as what's happening with the music industry right now: offer music downloads at the right price and people will gladly pay. Likewise, if adult movies were offered at the right price, customers would pay rather than pirate. There has been a lot of hissy fits regarding the unprotected content on AVSes floating around pirate channels because they are so easily available. As someone who has followed and observed the underground scene for a very long time, I can say this is not the case. Most of the stuff being pirated are movies not found on AVSes - a lot of Wicked, Vivid, Playboy and Digital Playground movies. And having encrypted content doesn't deter the pirates because they can always encode the DVDs themselves. Why are they doing this? Because everyone has an understanding of economics on a subconscious level. It goes back to the "right price" observation.

Here's what goes through the head of a user: $30 per DVD and $12 for VOD, that is too much. I'd rather wait the long hours, sometimes days to download the movie off bittorrent or on IRC. But wow, $30 for hundreds of movies at 200kb/sec transfer rates...it would cost me more money on electricity costs alone having my computer on endlessly to download a handful of files. Paying $30 to download these movies within a couple of hours is worth it. Screw the hassle dealing with IRC and missing newsgroup files.

Let's make it more relative to everyone: Ever see a trailer for a new Hollywood movie and think you want to see it but scared off by the $11 US ticket price and entertained thoughts of downloading the movie illegally instead? Only a good movie like Lord of the Rings may be worth $11, but few. Same with adult movies.

So I believe studios should embrace services like adultbouncer and deluxepass but go about it in a smart way:

1. Don't license them your newest and best content <- a major major mistake many studios made was that a new movie was available on an AVS even before it was available on most retail DVD channels. wtf????

2. Do not completely abandon licensing to AVSes (or adult networks as they are now referred to). Instead, license older content. For example, new content debuts in normal retail channels and on VOD on studio site. After about a year when interest fades and profit already made from the video, license it to AVSes who then showcase it to members at a much lower price. Revenues may not be as much in comparison, but factor in a recurring stream and it can still be substantial. This is exactly like the Hollywood model. Show the movie in theatres. After interest wanes, show the movie on secondary channels like video. Sometimes, the video makes more than the actual theatrical release. ADDED BONUS: by opening up the distribution, you also create awareness of your company and your video releases to an even wider audience, who may then look forward to new releases. It's better than free advertising.

3. listen to the customers. Okay, I'm only expressing what I personally feel and the opinions of people I know, but the vast majority of us hate how way too many movies have endless scenes of closeups of a guy's balls. Yes, we get to see him penetrating the girl, but we paid to see the girl, not the guy. We want to see the big picture...the look of ecstasy on a woman's face and the way she gyrates her body against the man. Why is it that so many "straight" videos seem "gay" because of this. Please listen to the customers. Content is crown prince.

4. treat potential business partners with respect. I want to tell you about Oriental Dream Pictures. I contacted the guy in charge of distribution regarding possibly licensing their content. He was rude to me the whole time. I first asked about a onetime fee. He said no. I then offered recurring plus the ability to DRM-protect the videos. hung up on me. Tried contacting him again to no avail. Now their videos are some of the most widely pirated, because their titles are available on far fewer legal sites and video stores. As Mutt said, Traffic is king... if you want to get your brand out.

AVSes also have their own set of problems, the biggest being the sheer number of different AVSes now and the total lack of quality control.

I run two AVS sites, but I treat them like separate paysites. I spent hours on the designs to present the licensed videos in the most appealing manner, as well as provide tons of great options for the end user. Afterall, there are some great movies and they should be presented in a fitting manner. Unfortunately, there is absolutely no quality control with AVSes. it's just a cash grab to get webmasters turning the licensed movies into digital content versions of "whores" to be "pimped". Too many sites are crap. Dreadful design, false advertising, and hapless presentation. Webmasters might not know this, but many people associate the presentation with the overall AVS and the videos. Not all end users may realize the videos are "licensed", so they think the site is an official representative of the studios and therefore if the site is crap, the studio must be crap too. Furthermore, if the site is crap, then most of the AVS is crap too. On adultbouncer, I would say maybe 5% of all sites are worthy of shilling $30/month. The rest are horrible and it reflects badly on everyone involved. There should be restrictions on who can be a webmaster and better pre-approval of sites. Plus regular house-cleaning of dead sites.

Perhaps the studios should punish the AVSes somehow. Afterall, if you had made Return of the King, would you want it relegated to the worst theatre in the multiplex or the best one?

I'm not the most well-spoken (or written) man, but I hope I'm not way out there in my beliefs. I truly believe things could fare well for everyone if changes are made and stronger partnerships are formed, following a common set of goals - chiefly to make money.

For now, I hope both sides open up to a little tolerance and most importantly, knowledge of what the other is actually like.

On a side note, I really would like to better understand the studios' position. If anyone can point me to an article on how porn movies are made and distributed, or any studios willing to extend an invitation for a behind-the-scenes look, give me a holler. I'd even pay for the opportunity. hehe. like a "studio tour". ;)

btw, here is my site if you want to see what I do:

http://apa.janswebring.com/index1.html

p.s. online piracy of Hollywood movies is big, but pales in comparison to actual physical piracy of movies in various formats like VCD and DVD. This could change and become like music, but at least Hollywood is doing a few things right, such as offering their movies on DVDs at very reasonable prices.

p.p.s. Anno2004, I'm guessing you either work for a content production house or you own one in some shape or form. There is a lot being done about piracy, but comparing AVSes to piracy is a little unfair. Piracy will never be eradicated as everyone knows, but there are two main methods to go about limiting the damage.

1. go after the big pirates and shut down their networks.
2. discourage piracy by offering quality content at reasonable prices.

We shouldn't make the same mistake as the RIAA and go after end users, who happen to be the biggest fans. It alienates them even more. If a body of work is good and offered at a good price, people will be willing to pay for it.

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AdultLegal is no friend to any porn studio, they sold them all down the river for a quick buck, no skin off their noses. I keep telling studios their content has value, alot more value than a $150 license to an AVS system who will hand out that DVD to any pissant AVS webmaster affiliate like candy, no charge.

Please come back here and bring with you a scanned copy of this shared revenue agreement between any of the above studios and any AVS. I do know one AVS that has made a deal with a studio and it wasn't any of the ones u mention.

Go check a standard web license, get the AdultLegal one, there's a clause in every web content license which prevents the kind of exploitation DeluxePass and Adult Bouncer dealt the movie studios.

Sad, because if the top 10 gonzo studios banded together and cut off the supply they would rule the Internet world or at the very least get their fair share finally.

Check out Pimproll, this is an upstanding Internet company, not thieves like the AVS clowns, they wanted movie content they went to VideoTeam and cut them a deal - a partnership.

With the money DP and AB have made, over 100 million dollars, they could now make partnerships with studios easily.

And let's not forget the outright theft by Adult Bouncer and Deluxe Pass of movies that aren't available for license. Ask Jules Jordan about it, ask JM Productions, ask New Sensations, ask any studio that has a clue and they will tell you of their experiences with AdultBouncer - it's always the same excuse, 'uh...we licensed these movies from a guy who swore he had the rights to them'.
Go look up a court case between Perfect 10 magazine and an AVS named AgeCheck - the judge in that case fingered the AVS itself as liable for the wanton theft of the webmaster affiliates who stocked their sites with stolen movie and picture content. The AVS's, just like the free hosting companies before them, know that 90% of the content being uploaded to THEIR servers is stolen. I've had large AVS owners themselves admit this to me.

mod note: Challenging someone's statements is OK so long as it is done with civility. Calling out other posters is not acceptable. Offending sentence removed.

Edited by - hardware on 8/12/2004 11:05:02 PM

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btw there are some honest webmasters on Adult Bouncer and DeluxePass, i can't say they're all thieves, i know some who license their own content and piggyback onto an AVS system for billing purposes.

ask AdultBouncer and DeluxePass where their Japanese movie content comes from. oh wait - they have special revenue sharing contracts with the Tokyo porn movie studios..... please bring one of those back with you too.

Edited by - hardware on 8/12/2004 11:06:09 PM

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Frankly, I do agree with you that the content is worth so much more than what adultlegal charges to a singular webmaster. $150-$250 for a lifetime license to use however you wish practically? When I first learned of adultlegal, I thought it was too good to be true. I always thought, and still believe, that the fee should be recurring, not a fairly small one time fee. It's only fair to the studios.

If you've read my original post, you'll find that I agree with you in regards to the total lack of honesty and quality control on the AVS part. Let me expand my comment further: I have voiced on many occasions to the management of adultbouncer, my utter disdain for the complete lack of quality control and the willingness to look the other way. Those tokyo videos you mentioned. I am fully aware of them, more so then you might think (being very familiar with the jav industry). I tried to get the material taken off adultbouncer and the sites closed down many many times, but to no avail. They keep them operational because it generates them money. I hate how adultbouncer turns a blind eye to a lot of activity and despite assertations of quality control, I find very little of it.

In regards to the Tokyo videos: adultbouncer is not the only guilty party. I know of thousands of sites showcasing movies illegally and no one shuts them down because the Japanese studios are completely unwilling to pursue to my utter amazement. I've tried contacting these studios and they tell me, "we don't care". Unbelieveable. Not only are these videos illegally shown, but one can not obtain age verification of the actresses. No records are kept in house. It becomes a major pain for everyone if the feds ever question a performer's age. But, like in any industry, you have these fools willing to gamble. I'm surprised adultbouncer allows this knowing full well they could be liable and actually having served in jail for alleged underaged porn before.

I hope that I could be considered as one of the honest webmasters. I use adultbouncer and JANS not to promote the network as a whole as most webmasters do, but treat it as a very affordable billing solution, and build my sites to stand on their own. I didn't start with a lot of money to purchase my own content, which is why I chose adultbouncer because content was provided. But as my revenues increased, I started to purchase more of my own content and hope to someday use only my own licensed content. I'm also gradually severing connections to the network as a whole, but still using ABbilling to handle processing. This would mean that my members can't access other adultbouncer sites, but it also means other adultbouncer members can't bum off mine, especially after I paid good money for content.

Honestly, I wish there was another mean besides adultlegal, but I've been buying licenses from them. I've spent days worth of man hours looking for other sources, only to come across other resellers like xxxcontent, or the tired old "plugin", streaming providers. My idea has always been to have a paysite that offered downloadable videos for a small monthly fee. Plugins did not allow this. VOD was either inferior quality or hugely expensive for the end user(divx network's adult stuff for example). Too many content providers have videos in the old VCD resolution when really the next big thing is HD. Nor do I want to promote someone else' site. I've tried contacting other studios but all I got was the cold shoulder. Maybe I was deemed too small to afford the time. I was willing to meet in person, offered to pay a recurring fee and DRM-protect their content. Is a willingness to pay $5000 a month in licensing fees not worth the time to even consider a discussion about a business partnership? Guess not. That's why I deal with adultlegal.

BUT I am more than willing to work with the studios themselves. I haven't spoken with Mr. Rubenstein, but if he is interested, he is always free to contact me and discuss business together.

Mutt, I am not defending all the sins of AVSes and bashing studios. I have a laundry list of gripes with adultbouncer and the way business is handled (lackluster webmaster support, moral ambiguity, etc). Nor do I wholly support adultlegal. I'm speaking from a webmaster's standpoint and some of the difficulties I have had. Yet I'm not standing idly by. I still pursue contacts with the studios themselves and I'm working on creating my own quality content in the future.

Mutt, you've sound like you are a man who got burned by an AVS or somehow wronged to the core that you need such unyielding aggression. That's okay, but I ask you extend me some courtesy just as I have for you. How do you expect people to listen to what you have to say if you don't afford them the same regard? The moderator removed whatever it is that you were challenging me, but if you need something barbaric like a swordfight or fist-a-cuffs before you can trust me, I'd gladly accept. However, I would much prefer to treat you to a drink and sit down with you in person so you can impart me your wisdom. :)

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By the way, what is your adultbouncer site? movieguy?

These AVS sites are making money hand over fist off of the studios ignorance, but they better buy up their content now, because studios are starting to wise up, you can have complete content for a website while only spending about $1000, when the same content that was just purchased cost the studio about $40,000.00 to shoot. The AVS' are the ones making all the money of these deals, and licensing encourages more pirates to upload new studios content, cuz guess what? no one is checking licenses...

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movieguy don't believe what you are told by any of them including webmasters who are part of the exploitation, some unwittingly because they have been led to believe thrugh lies since the beginning that everything was legit.

jules, that $250 license is less than that, nobody is paying it - $170-200, so a studio gets a whopping $80-100.

cut them off, they'll find out how expensive it really is to conduct business as a legitimate business, like my customers are who pay me $2500 for a decent exclusive video and stills.

there are more victims here than just the movie studios, people like myself who sell content, go take a look around and see the thousand fake reality movie sites that are made of nothing but DVD ripped content for a couple thousand bucks. hard to get people to invest $50,000 to $100,000 with me when they see AVS guys putting up sites with 'free content' that look better than theirs for nothing.

If a studio wants to license their DVDs as another source of income, they should, do it themselves - $500 minimum, there are 5 scenes on a porn DVD, that's still a measly $100 per scene. If an AVS wants a license, $2500 per DVD, at $500 a scene.

If the studios get smart they will cut the supply off, force the AVS systems and other web companies to understand the true value of great movie content in 2004.

a license is worthless unless it's enforced. i have watched Internet content providers dying off over the last couple of years, i know why, some of it is self inflicted, out of desperation they allowed webmasters with paysites begin to use their valuable web content in what are called 'free hosted galleries' - nobody needs content anymore if the affiliate programs are providing all this free content.

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Scott Kinney
Diversified Video Associates
www.xxx-imports.com

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I also thought the German MMV stuff was officially licensed because Adultbouncer always made a big fuss about how it is exclusive and the content must be DRM-protected.

Jules, Mutt, I had an inkling of the situation I was in, but you've certainly showed just how much trouble things could be. I won't be one of those guys (or Martha Stewart) to defend themselves even when they are wrong. I will admit fault and work to improve B2B relations.

Maybe the lackeys didn't think much of me and didn't bother to forward my requests to the appropriate people, leaving me with unanswered emails and unreturned phone calls whenever I contacted the studios. If anyone of authority is reading this, I'm willing to talk. If not, that's fine, but it looks like the end is approaching for the AVS model. I'd still like to stay in some way because I enjoy this industry and have great respect for the actors, directors, and crew involved.

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i'm not sure what AB and DP are doing these days, it's possible that they have tried to mend some fences with studios and be on the up and up with them. i doubt it tho, i haven't seen any studios come forward and say they are working in partnership with them.

this new part of the biz, the VOD download and streaming operators - i hope studios are watching what's going on closely.

i saw a new one this week, somebody has licensed DVDs from Adult Legal and is now doing VOD download sales at 7 bucks a pop. I believe Jill Kelly's company has a special clause in their web license through Adult Legals that prohibits webmasters from making JKP videos available in one big file. I assume there was a reason JKP insisted on this. This is what I mean when I say brokers don't care about anything about getting their commission and will do nothing to protect the licensors they rep.

i might be wrong about the JKP thing, there is something special about their license - it's either they don't allow you to stream their movies, only downloads, or what i said above.

Edited by - *Mutt* on 8/13/2004 6:39:25 PM

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I think that those studio's like Jules jordan, RLD, Devil's film, Platinum X, Acid Rain, Anabolic, Diabolic, so basicly the big guys should make an online business model together! I know this sounds pretty weird, but look at it this way. Fact is, that none of the studio's will make huuuge profits from their online business right now. How much do current AVS make? 80 Thousand a day? Even 150 or more a day! I know for sure that more and more new peoples are getting internet these days, connections are faster then ever. They look for porn. Maybe they didn't even heard of Platinum X before, but find videosz.com. Guy is horny want to jerk off, he thinks, " hmzzzz 350 DVD's for 30 bucks?" and he signups with them. If you can't beat them join them!

What I try to say is this. You'll have to cut their source and come up with something better instead. What Mike did is verry good, however there are more brokers out there not only adultlegal. And don't forget the movies that are al;ready out ther and used by thousands sites! The damage is already there, time to fix it.

2. Check above I have some good ideas.

Well that's it for now.

Good luck.

Edited by - Anno2k4 on 8/15/2004 10:42:43 AM

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Hey Movieguy you must know adultbouncer really well to know that?

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