I am guessing that other companies have been hurt by the videobox type of website, as well.
I had always wondered about the effects of those sites on the companies.
Edited by - fu_q on 5/7/2009 7:24:10 PM
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Dirty Wives Club 43 - review by Captain Jack| Author | Post |
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fu_q  All-Star Member Marv Montag (@PornOfYore) 2506 Posts 2/09 |  Posted - May 7 2009 : 7:22PMI am guessing that other companies have been hurt by the videobox type of website, as well. I had always wondered about the effects of those sites on the companies. Edited by - fu_q on 5/7/2009 7:24:10 PM [Link] |
| poloprinz Member We didn't bring a compass 'cause we ain't got nowhere to go 173 Posts 4/09 | Posted - May 7 2009 : 8:09PM But since the megasites are there, this case seems closed. I wonder if the cezarcapone-approach (no downloads, only streams) works. [Link] |
| fu_q All-Star Member Marv Montag (@PornOfYore) 2506 Posts 2/09 | Posted - May 7 2009 : 8:12PM [Link] |
| Harri Patel Senior Member #SDNY he's all yours. -- Michael Steele 5110 Posts 3/03 | Posted - May 7 2009 : 8:21PM [Link] |
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| poloprinz Member We didn't bring a compass 'cause we ain't got nowhere to go 173 Posts 4/09 | Posted - May 7 2009 : 8:22PM Doesn't appeal to me either. I'm just wondering if this really works as an effective protection against piracy, since protection is the only reason for not allowing downloads i can think of. It can't be bandwidth, most sites protect bandwidth by not allowing dl managers. [Link] |
| ninja1 Senior Member 2939 Posts 1/08 | Posted - May 7 2009 : 9:28PM And the stuff I've seen in streaming-only format is pretty mundane older content from no-name studios, so it can't be about protecting the latest hottest high-demand scenes. [Link] |
| poloprinz Member We didn't bring a compass 'cause we ain't got nowhere to go 173 Posts 4/09 | Posted - May 7 2009 : 9:51PM weird. [Link] |
| Transformer1 Please excuse my sad existence. 8 Posts 5/09 | Posted - May 7 2009 : 10:24PM Edited by - Steph on 5/8/2009 7:53:18 PM [Link] |
| themadride Member 75 Posts 1/09 | Posted - May 7 2009 : 10:45PM Are we talking about an economic issue or some kind of glory days nostalgia? You are expressing a desire for a VERY specific niche genre. Not just all-girl porn. Not just all-girl porn with "real" lezbians You want non-violent, romantic, all-girl "real" lesbian porn. Sheesh. You want the "PORN INDUSTRY" to "Forget Porn" and focus on your niche. I hope you are a billionaire willing to pay handsomely if you want the entire industry to cater to you. I love the kind of movies you described, but I love blow bangs, extreme anals, etc more. Imagine if I said, "The reason the porn industry is failing is because they aren't producing enough blowbangs. They need to forget all other types of porn...and just focus on blow bangs" I don't mean to pick on you or attack. Sorry. But I think it is important to seperate an economic issue from personal preference, etc. [Link] |
| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 7 2009 : 10:53PM I'm not tired of male-female sex, thank you very much. [Link] |
| Transformer1 Please excuse my sad existence. 8 Posts 5/09 | Posted - May 7 2009 : 10:56PM Edited by - Steph on 5/8/2009 7:54:03 PM [Link] |
| BigBobxxx Senior Member 2681 Posts 5/04 | Posted - May 7 2009 : 11:07PM [Link] |
| Zaer Deactivated User 249 Posts 10/07 | Posted - May 7 2009 : 11:17PM And the reality is you can beat free, by offering a superior distribution model, ease of use, greater diversity of content, and convenience. iTunes has shown that it can be done, it's just a matter of having the will to do so. Edited by - Zaer on 5/7/2009 11:18:47 PM [Link] |
| SexyHard Member 673 Posts 6/07 | Posted - May 8 2009 : 12:04AM In Silicon Valley they say that Moore's Law also applies to Storage and Network capacity. (I think the doubling time is even faster than 18 months for Network Capacity.) You can say, "That's not Moore's Law." But Silicon Valley Billionaires and Stanford Ph.D.'s don't quibble about such things. As Network capacity doubles, the cost of transmitting a single bit drops in half. Edited to fix typo. Edited by - sexyhard on 5/8/2009 12:05:43 AM [Link] |
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| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 8 2009 : 2:03AM The cost of transmission is something else, entirely. [Link] |
| Prophit Member 378 Posts 1/07 | Posted - May 8 2009 : 3:12AM If someone offered me good quality porn that I can download and keep and pay for it by movie or by scene I would gladly do that. [Link] |
| SexyHard Member 673 Posts 6/07 | Posted - May 8 2009 : 7:20AM From Wikipedia article on Butter's Law: According to Gerry Butters,the former head of Lucent's Optical Networking Group at Bell Labs, Moore's law holds true with fiber optics. The amount of data coming out of an optical fiber is doubling every nine months. Thus, excluding the transmission equipment upgrades, the cost of transmitting a bit over an optical network decreases by half every nine months. The availability of dense wavelength-division multiplexing DWDM and coarse wavelength division multiplexing CWDM is rapidly bringing down the cost of networking, and further progress seems assured. [Link] |
| mariemadison Member 57 Posts 2/04 | Posted - May 8 2009 : 8:03AM one complaint from the consumers and the fans is that the industry as a whole offers too few options. And in truth, the biggest complaint about iTunes (until very recently when they dropped DRM) is that iTunes didn't offer enough options either. When the customer buys a video, they want to be able to watch it on their computer, and their television, and they want to copy it to their ipod so they can take it on the morning commute, or finish it on their office computer... or whatever. I don't see the point in limiting these options for our customers. Being in the Adult Industry, we have to be more responsive to these demands, because our audience is - and has always been - on the cutting edge of consumer technology. Not only do they want to watch the content wherever they want to, but they have the gear and the knowledge to do it. The fact that you can read all over ADT forums about fans bitching about the technically inferior products coming out of the studio system. DVD's that are letterboxed in a full screen frame. Downloads with wrong aspect ratio's - there's even a post from someone who said "It's okay, I know how to correct the aspect ratio myself on playback..." I don't know what clip he's talking about, but whatever studio sold it to him should be embarrassed. These technically inferior DVD's, download files that aren't properly encoded, or even color corrected - they aren't coming from some fly by night amateur couple shooting in their bedroom, they are coming from Major, International Studio's that make up 'Porn Valley', and so the customer's are rightly frustrated. When your audience is telling the film makers how to do their job, then the film maker should set his camera down and re-think what he's doing. The 'Porn Industry' as we know it is in serious trouble, and we all know it. But I just don't accept that it's 'piracy' and 'tube sites' and the economy. Porn is in trouble, because somewhere along the way, the industry stopped listening to it's audience, stopped innovating and stopped adapting. It's not going to die, there's a ton of money flowing through the industry. But there are a lot of studio's that won't survive, because they refuse to recognize that our audience is smart, tech savvy and have a million more options than they had when the studio's could simply funnel a steady stream of look alike product to the local video stores and wait for the re-orders. No one thinks about 'finding the audience' anymore, or responding to their demands. We don't hear Hollywood crying for a bail out because they are adapting. They still do test screenings, recut for different markets, explore 3D, animation and digital effects. And when the fans decided they wanted to watch "The Hulk" on their iPODs, the studio's started shipping Digital copies right along with their DVD's. In the meantime, porn producers are bitching because the people keeping us in production want to own their downloads, or only want to see our gang bang movies. I'm of the opinion that it's okay if a few banks and auto companies have to go bankrupt because they couldn't manage their business right to begin with. And I feel the same way about the porn industry. Even though I'm going to miss a few of them, the herd is going to be thinning out in the next year or so, and I don't mind at all. - Marie [Link] |
| Jacco All-Star Member "liable to deprave and corrupt" 2673 Posts 5/04 | Posted - May 8 2009 : 8:16AM "excluding the transmission equipment upgrades", right those upgrades are free and we already have fiber to the home everywhere, don't we? Jacco [Link] |
| themadride Member 75 Posts 1/09 | Posted - May 8 2009 : 8:32AM I said it would be a mistake to build the industry around a specific sub-niche. You were so specific about even the type of lesbian porn you want. Which is great....I'm very picky too. But that is a personal preference. No doubt that some company could carve out a nice position for themselves by fully exploring that niche. But not the "industry". If the entire industry devoted itself to something that specific then you could expect two things to happen: 1) Those who like it would be overrun with their favorite type of porn and wouldn't be able to support all of it. 2) Those who didn't like it would DEFINITELY only use the mega $9.99 sites with old contect, or steal old contect off the web. What needs to happen is more dedication to ALL niches with original content and frequent updates. One of the things I hate so much is when I join a niche site and it has limited content, rarely updates, but comes with tons of other sites with mediocre content that isn't worth my time to sift through. [Link] |
| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 8 2009 : 8:57AM Furthermore, the backbone of the internet may be provisioned with fiber but few companies carry it to the desktop, and you aren't going to find it in homes outside of major metropolitan areas, either. Edited by - hardware on 5/8/2009 8:58:48 AM [Link] |
| SexyHard Member 673 Posts 6/07 | Posted - May 8 2009 : 9:58AM If I were doing this, I would look into an iTunes-like model, but wouldn't ignore Pandora* or Hulu**. I don't think the question of Streaming vs. Download is important in the future. As I've been trying to tell the quibblers, the cost of network capacity is dropping exponentially, so within a reasonable amount of time, the quality of streams should catch up. (I know a lot of people still have dial-ups, but we're talking about the future, and the cell phone companies are launching 3G which is 1 hex faster on download than a T-1 line. You can probably access this Network while riding the sky lift at Breckenridge today. I think it costs $30/month.) As long as your purchase guarantees you unlimited access to the scene, most customers would probably be satisfied. If you can access the stream from multiple devices, it would actually be advantageous to you because you wouldn't need to worry about your hard-drives, your kids finding your collection, or taking your porn with you when you travel. Some people fetishize their porn collections, and want something they can hold and look at, but most would probably be happy to store their collections in "the cloud." The streaming model allows the provider continuous access to the customer, and additional monetization strategies. However you monetize, it's a long-tail play, which means that you're offering the ability to go out there and find what the customer is looking for, and deliver it to him. Once you can do that, there are a variety of monetization strategies. There would also be a subtle eBay effect to keep competitors out of the market. The data that is gathered from users is very important intellectual property which would give you an advantage over any competitors. On the other end, you could possibly negotiate exclusive deals with some of the content providers. (Two or three key short-term exclusives are probably enough to get the eBay effect rolling, and then you could let the content producers free.) This is one reason why you would want to involve Porn Valley from the beginning. Lets say you could bring in two or three important content producers as investors. You've then got a HUGE competitive advantage. Even before you get to negotiating licensing arrangements, you're halfway to having an exclusive contract. The other reason I would involve Porn valley from the start is related to why I keep mentioning Pandora. They have the best recommendation engine I've seen. It was developed by Musicians. They took the opposite approach from Netflix. Netflix started with data. 0-5 stars on every title and then they dumped the data into a machine, in hopes of discovering, "People who like both 'Annie Hall' and 'The Godfather' usually like 'Chinatown' too." Later on as a refinement, they included things like Genre, director, and stars when they saw that the engine wasn't that great. But this aspect of it is very crude, and I'm consistently unimpressed with Netflix recommendations. Pandora started by looking at the music. They developed a musical "Genome." Right now, it's playing "Amie" by Damien Rice. It has "mellow rock instrumentation," "acoustic sonority," "12/8 time signature," "use of a string ensemble," and "major key tonality." A bunch of computer programmers off the street never would think to look at things like this. (In fact, Pandora knows me better than I know myself. Based on a few songs that move me deeply, I thought I liked minor keys, but for casual listening, I prefer major keys.) To create this higher quality recommendation engine, you would need people who know porn. Who understand that it's not just "anal" or "no anal," but its "tight ass," vs. "bubble butt," vs. "massive ass." I don't know how Pandora gets the genome data. My guess is they rely on volunteers. I would probably ask the content providers to fill out a quick checklist when they upload the scene, and then allow users to double-check. To get historical data I would probably pay some college kids $10/hour to watch porn. (This could be part of the quid-pro-quo when negotiating exclusive agreements with some of the content providers. "Give us an 3-year-exclusive, and at the same time, give us a list of 3000 scenes that you want us to generate the 'genotypes' for.") Pandora doesn't ask for 1-5 stars, they simply ask you for a thumbs up or thumbs down. They "pay" you for the data, by either skipping to the next song and promising never to play it again, or being sure to play it again. If you want to give more than a simple thumbs up or down, you can say, "Don't play for another month." On the positive side, having given a thumbs up, it doesn't tell you that you've already given it a thumbs up once, so it can keep track of how many "thumbs up"'s you give. "Paying" the user for a porn rating would require a different approach, but given the emotions porn stirs, maybe you could have the option to "Send a Thank you note to the star." On this, you would probably need to throw some spaghetti on the wall to see what sticks. As you can see, real start-up capital would be needed. But the payoff is potentially huge. I can't provide the article to you, but most public libraries have online databases you can access simply with your library card. Look for: "Temporal analysis of a very large topically categorized Web query log." By: Beitzel, Steven M.; Jensen, Eric C.; Chowdhury, Abdur; Frieder, Ophir; Grossman, David. Journal of the American Society for Information Science & Technology, Jan2007, Vol. 58 Issue 2, p166-178, 13p, 4 charts, 24 graphs; DOI: 10.1002/asi.20464; (AN 23527651) It seems that 10% of all web-searches are porn related. This means that Google and Yahoo are 1/10 porn companies. Even today, with all the problems in the stock market, Google's market cap is $125 Billion. If you divide their market cap by their P/E, you get an estimated earnings (not revenues... earnings) of $4.5 Billion. 10% of $4.5 Billion is $450 Million. I don't know how much money flows through Porn Valley every year, but I wouldn't be surprised if one company, THAT IS NOT EVEN IN THE PORN BUSINESS, is making more on porn than all of porn valley. They do this with a general purpose recommendation engine that relies primarily on simple textual analysis, and they monetize with a very crude tool, pay-per-click advertising. SO STOP GRIPING ABOUT PIRATES. THERE ARE $BILLIONS WAITING TO BE MADE. * Free content with an upsell. ** Free content with advertising. (This isn't as radical as it might seem to some in Porn Valley. It built NBC, CBS, and ABC. Even today with competition from Cable and the Internet, ABC was able to bring a junked airplane to Hawaii, break it into pieces, and lay the pieces out on a beach for the Pilot of "Lost." This was all paid for with advertising. So don't tell me that Wicked absolutely HAS to sell DVD's in order to continue to spend three days shooting movies.) As I've said before, I think Hulu's clients are missing the boat with Brand advertising. Direct response is tailor-made for the internet, but they think Hulu is TV. [Link] |
| SexyHard Member 673 Posts 6/07 | Posted - May 8 2009 : 10:34AM Read the post above. The cell phone companies are starting to provide the last mile of "wire." I'm not claiming that Network Capacity or upgrades to networks are free, simply that the price is dropping. Some would say it's dropping exponentially. Obama also seems to think that America needs to build up its network, so it can compete with the rest of the world. There may be a movement towards seeing the network as a public good that should be developed with public money. You're certainly not trying to argue that the in five years the network will look like it does today, are you? [Link] |
| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 8 2009 : 11:45AM And please stop trying to restate my position. I clearly defined the statement you made which I took issue with, so I can only see your attempt to redefine it as weaseling. [Link] |
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| Flash Golden Age Classic 11018 Posts 5/01 | Posted - May 8 2009 : 1:07PM [Link] |
| AdamL Member 268 Posts 12/07 | Posted - May 8 2009 : 1:50PM agree with what stormy wrote, why would she continue to pour her heart and effort into making a film when she is losing money or not getting enough out of it. it's not like she is backed by a big movie company, whose movie has been leaked, but will still make a profit in the movie theaters. porn cant take the blow (no pun) the porn industry just doesn't have the money to fight piracy like the music or movie industry. it's not about their content, or that there a literally millions of different porn sites, they just don't have the resources to combat piracy. [Link] |
| Janitor Retired Porno movies, sexy videos, xxx. Adult DVD Talk at your service. 6409 Posts 11/99 | Posted - May 8 2009 : 7:49PM If there were billions to be made in porn you'd see a very different industry. [Link] |
| HeyNow Oblivious Gold Star Hey! 5965 Posts 1/03 | Posted - May 8 2009 : 9:14PM But it makes me sad that someday it might be the end of ADT as we know it - and I won't feel fine! [Link] |
| fu_q All-Star Member Marv Montag (@PornOfYore) 2506 Posts 2/09 | Posted - May 8 2009 : 11:18PM [Link] |
| juha Senior Member 2752 Posts 3/05 | Posted - May 9 2009 : 5:46AM Porn companies don't have the financial resources to try out new business models that might prove to be lucrative business after a couple of years. [Link] |
| juha Senior Member 2752 Posts 3/05 | Posted - May 9 2009 : 5:54AM [Link] |
| juha Senior Member 2752 Posts 3/05 | Posted - May 9 2009 : 6:03AM Same question for the companies that crank out comps like there's no tomorrow. Do they do so because there is indeed no tomorrow for the porn industry? [Link] |
| Janitor Retired Porno movies, sexy videos, xxx. Adult DVD Talk at your service. 6409 Posts 11/99 | Posted - May 9 2009 : 10:21AM I do chuckle when I get emails from brand new adult DVD retailers. I cannot understand why someone would launch that type of business now. While we may still be called Adult DVD Talk a significant portion of our revenue is VOD sales. juha, yes I lost my enthusiasm for porn years ago. I don't know if that's because of some people's attitudes towards women or just because anything becomes a job when you do it long enough. Lots of menial work to keep this place running. But I've learned a lot and continue to find certain facets interesting. [Link] |
| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 9 2009 : 10:36AM As a consumer, I can ignore porn for as long as I want to and just dip my toe in whenever I get the urge. I feel for you having to wade through the bullshit day in and day out. [Link] |
| BigBobxxx Senior Member 2681 Posts 5/04 | Posted - May 9 2009 : 11:05AM Running a website, I'm sure, doesn't really allow for time off. Burnout on steroids. In my own life, I loved music as a child. In some form (performing, teaching, service, retail), music was how I made my living for over 35-years. I now have nothing to do with music. I rarely listen anymore (in fact, I will often turn the radio off while driving, as I can't stand it). Owning a retail music store (i.e. dealing with the public on the wrong end of the retail stick) taught me what assholes many people are. From the band directors and teachers stealing and copying printed music (and passing it out to students... my customer pool), to the shop-lifters, to the parents angry they have to spend money on their children, to the people who depend on your knowledge and then hatefully argue with you -- retail is Hell (even better when it's your money on the table). I no longer play music (remember, I was a professional, and very good). And, I don't mean just for money; I no longer play, period. There is just no interest anymore. So, do I understand those in the porn business having their livelihoods taken away from them and having their souls sucked dry in the process? You bet. It all started with the photo-copy machine, the Internet is just finishing the job. [Link] |
| Mike Quasar Zero Tolerance Reluctant pornographer 1765 Posts 7/01 | Posted - May 9 2009 : 11:32AM Edited by - mike quasar on 5/9/2009 11:34:19 AM [Link] |
| miscreant70 Member England 39 Posts 9/03 | Posted - May 9 2009 : 11:52AM Here in the UK cinema attendance is on course to be the busiest since 1969. [Link] |
| BigBobxxx Senior Member 2681 Posts 5/04 | Posted - May 9 2009 : 12:13PM [Link] |
| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 9 2009 : 12:39PM My point, in case you missed it, was that I don't believe you can reduce what men want in women to a bunch of tags for physical characteristics. [Link] |
| miscreant70 Member England 39 Posts 9/03 | Posted - May 9 2009 : 2:15PM Is there a XXX studio prepared to do a little work so that when I type "(actress) + high heels + anal + cumshot + belly" into Google I get a result? No. Which is why people have to come to places like ADT and ask if anyone knows of such a scene. For too long porn valley has thought it was enough to call a video "Anal Excess" and expect people to be grateful for the one scene that delivers. Why would UK cinema attendance be growing to a peak last seen 40 years ago when piracy is supposedly sucking the heart out of the industry? It must be because Hollywood is producing quality films that people want to go and see - and pay for the priviledge - even at a time when people are cutting their expenditure on 'luxuries' like going out. As others have pointed out, there's no reason why XXX can't follow the same model. The strong and the innovative will survive, the rest will grumble their way to oblivion. Edited by - miscreant70 on 5/9/2009 2:17:29 PM [Link] |
| BigBobxxx Senior Member 2681 Posts 5/04 | Posted - May 9 2009 : 2:49PM (1) Open XXX films, on film, at the neighborhood multi-plex (let's say on only 1,200 screens) (2) Open XXX films, on film, in foreign countries (3) Release DVDs and Blu-ray versions of the movie (4) Release movie (the full hardcore version) on pay cable (like HBO, Cinemax, etc.) (5) Release movie (the full hardcore version) on network television (6) Release movie (the full hardcore version) into syndication (7) Release "special edition" DVDs and Blu-ray, followed by "director's cut," "extended" and "un-rated" versions (8) Market XXX action-figures, trading cards, lunch-boxes, back-packs, etc. (9) Make cross promotion deals with Burger King, McDonalds and the Disney theme parks (10) Get local states and municipalities to offer incentives to have you film your XXX movies there (11) Market your films to the all-important teen market, and don't forget the family and date market segments (12) Don't skimp on the action sequences and special-effects; consider 3-D (especially for the cumshots) For, as we all know, XXX movies lend themselves well to following the mainstream model Looking for some of that detailed XXX information? Try the IAFD. FYI, I don't see the "tube" and "torrent" pirate sites offering the kind of detailed information you suggested. Yet, surprisingly, they seem to have no problem attracting "customers"  Edited by - BigBobxxx on 5/9/2009 2:57:23 PM [Link] |
| fu_q All-Star Member Marv Montag (@PornOfYore) 2506 Posts 2/09 | Posted - May 9 2009 : 4:36PM Edited by - fu_q on 5/9/2009 4:37:22 PM [Link] |
| Schmse Senior Member I'm not here, this isn't happening! 2571 Posts 6/04 | Posted - May 9 2009 : 5:31PM [Link] |
| poloprinz Member We didn't bring a compass 'cause we ain't got nowhere to go 173 Posts 4/09 | Posted - May 9 2009 : 5:51PM Then release the movie version and 1)-12). Have audiences sing-a-long and fuck-a-long with the characters on the screen. Make porn a happening everybody wants to join! [Link] |
| Fernandez Deactivated User 781 Posts 12/08 | Posted - May 10 2009 : 12:55AM The meat packing district in NY had live sex shows with a guy playing the piano and harmonica while the girls mingled and gave out hand jobs. Many of the lesser kmown porn stars of the 70s would appear. The old Melody Theatre had a Mardi Gras with live sex musicals and audience participation. Blow jobs were available for $10 in the mens room Everybody brought in their favorite booze in paper bags. Bobby Astyr was a regular and usually brought in Samantha Fox to entertain the gentlemen. The infamous National Hotel had an anything goes live scene and piano player. Vanessa Del Rio danced there on occasion. [Link] |
| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 10 2009 : 1:01AM [Link] |
| wcw43921 Senior Member Look Into My Eyes-- 1252 Posts 4/08 | Posted - May 10 2009 : 3:59AM Because there are those who actually do fight for it. And maybe they don't die for it, but they do risk the possibility of going to jail for it--something most other crap purveyors don't have to deal with. ____________________________________________________________ "There can never be too many beautiful women Hypnotized for our pleasure." [Link] |
| Hardware All-Star Member Your other left 14595 Posts 3/02 | Posted - May 10 2009 : 7:06AM [Link] |
| SexyHard Member 673 Posts 6/07 | Posted - May 10 2009 : 10:21AM VC is looking for big payoffs in less than five years. You can't pay back your investors by slowly year by year earning money, you need to be able to sell the company. Silicon Valley Entrepreneurs often have short attention spans, and are looking to do projects that will last a few years, and plan to move on to the next project after they cash-out. This exit strategy wouldn't work for a porn company. The founders would need to be committed to porn. So you're right, it's hard to exit from porn. In addition to acquisition, you can offer profit sharing, but that would not be attractive to most VC money. In this situation, a better offer would be a stock-buyback-agreement, wherein the founders say to the investors. "It is our plan to purchase your stock from you at $x/share once we hit these benchmarks." YouTube exited for $1.4 Billion. Mark Zuckerberg (with his lead investor, I think) spoke at Entrepreneurial Thought Leadership Seminar a couple of years ago, and his COO spoke a few weeks ago, but I honestly forget their exit strategy. My guess is that their investors aren't too concerned that Facebook hasn't exited yet. The bigger question is "Why was Google willing to spend $1.4 Billion to acquire Youtube given that Youtube is losing money?" It isn't just that Google has more money than they can spend. (Remember about 10% of their $4.4 Billion in annual earnings comes from porn). They bought Youtube during the Housing Bubble, not the dotcom bubble. Why? Partly, they were in a bidding war with Microsoft. So one needs to ask not only, why was Google willing to pay $1.4 Billion, but why was Microsoft willing to pay $1.35 Billion? The answer is fairly simple if you just look a few years into to the future: TV and the internet are merging. Some people spend more time watching videos on their computers than they do watching TV. Most TV's have become essentially computer monitors. (A Tivo is really a computer with a medium-sized hard-drive.) Google believes, TV (as we know it) will soon die** and the internet will take over the living room. Google wants to be the #1 destination for your "internet-TV" as well as your computer. Just as, bad porn creates the opportunity to make a good search/recommendation engine, the "negative image" of porn is the part of the opportunity. Despite being the most profitable porn company in human history, Google doesn't want to be seen as a porn company.*** However Google, Hulu (or some still unknown start-up's) video offerings develop, they won't want to actually store large quantities of porn on their servers. This means that a porn company can move into this market, without having to compete directly with the big boys. Once again, the opportunity for all long-tail companies is connecting the customer with the product -- whether it's information (google), merchandise (ebay), books (amazon), or music (iTunes) -- that they want from the infinite world available to us on the web. Since no one has grabbed this opportunity for porn, Google is making $1/2 Billion a year using a tool and a monetization model that are not optimized for the special needs of the porn market. I think everyone in Silicon Valley believes that Web 3.0 will replace TV. If so, the $1/2 Billion/year that Google is currently making on porn is but a drop in the bucket.The industry will be very different in five (maybe 10) years. To understand how different it will be, you need to see what is sitting right in front of you. Billions are being made in porn Notice the little search box in the corner of your browser. Wicked, DP, and Evil Angel aren't the biggest porn companies in the world. Google and Yahoo are. 10% of their business is porn, Google's market cap is $128 Billion, their annual earnings are $4.4 Billion. Yes, in five years, you may be doing something completely different. If Wicked, DP and Evil Angel don't adapt, they may be broke. But porn will, I believe, be bigger than ever. * To take an small example that is appropriate for Mother's day: Right now, Facebook has a lot of information about people's social networks. Maybe Facebook earns a little bit of revenue from advertising, but loses money. (I'm guessing this is the case.) Down the road, maybe Amazon -- which is really mall.com with a big bookstore at the entrance to the mall -- will buy Facebook. Facebook knows who my friends are, their birthdays, our zip codes, and my email address. Do you think Amazon might want the ability to send me an email saying, "Don't forget Sam's birthday is next week"? (Granted, I don't send birthday gifts to all of my friends on Facebook, but if at the same time, Amazon bought a POD greeting card company.... I haven't sent a greeting card since my ex-wife stopped sending them for me. But if Facebook/Amazon could do the job for me, I might start sending a couple of hundred a year.) Facebook doesn't ever need to make money from their website. The information it has about us is priceless. (Literally priceless, it knows WHO WE LOVE.) ** DVD's will probably die too. *** Isn't this the real reason Google won't let you do an Adword search on "porn?" Edited so I could figure out whether to write "exited" or "exitted." I still think it should be two "t"'s, but then again "edited" looks right to me. Go figure. Edited by - sexyhard on 5/10/2009 10:33:19 AM [Link] |
| fu_q All-Star Member Marv Montag (@PornOfYore) 2506 Posts 2/09 | Posted - May 10 2009 : 12:41PM I'm not sure that I would have ever partook in such things, but it is wild to think about. It's amazing how tame things are now relative to 30-40 years ago. I guess that Amsterdam has things similar to this now, though. [Link] |
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