The Dwindling of DVD Sales May Mean New Opportunities for Webmasters

With the advent of the Internet, broadband and Blackberries, people want what they want when they want it, and they want it right this red hot second! The floodgates are open and information is flowing freely and rapidly. Ten years ago, if you wanted to know the population of Saudi Arabia, you had to shimmy on down to the local library and consult the encyclopedia. Nowadays, after performing a 2 second search on Google or visiting Wikipedia, you can get the answer in a matter of seconds. Nadahl Shocair, CEO of Boomtel Networks, a company working on an Internet-based telephone system, believes that today’s society is experiencing a fundamental paradigm shift. "Humanity is binding together into a complex ecosystem ... a connected, planetary community," he said, and it "keeps demanding better, faster, and free."

This phenomenon is not unique to mainstream Internet. Adult studios are realizing that the Internet is replacing their tangible product. The sales of brick and mortar distribution companies are suffering, with some experiencing drops of 30% since last year. People used to have to go to their local video store, but now they can remain in the comfort of their own homes, a huge plus for the shy crowd, and download the videos they want to their hearts’ delight.

Though some studios will attempt to differentiate themselves by insisting that the quality of their videos is exceptionally high, instant gratification is the name of the game, not to mention that HD quality sites exist for a variety of niches, including amateur, hardcore and teen. Viewers no longer want to wait for a package in the mail or the length of time it takes to drive to the local video store. Today, many can hardly wait the couple minutes it takes to process their credit cards online! Furthermore, bandwidth is no longer a luxury item, but rather a necessity for most Internet users. Like all product life cycles, it is becoming less expensive and more readily available as it proliferates worldwide.

Therefore, the future of many studios and content companies has boiled down to two choices: To go out of business or to change their business model and begin producing VOD and/or offering downloadable DVDs.

There are approximately 1000 studios, but close to 980 of them do not possess the capacity to run a VOD site. As Jay from ObjectCube.com points out, “The cost of entry into VOD is high, so most studios can’t afford it.”

These guys have been in the business of producing adult content for years, and now they are expected to be Internet savvy. There are countless risks and challenges involved with integrating a completely separate industry into one’s business plan. However, in our “connected” day and age, it is essential that the Internet be an integral part of the marketing plan, especially for the adult industry. Naturally, this will not happen overnight and studios will experience a host of growing pains in the process.

How will this affect today’s webmasters?

As studios come online, whether they outsource their digital distribution or bring a technology department in house, they will need traffic driven to their high quality content. Therefore, we can expect an increase in the number of affiliate programs, leading to a spike in the demand for traffic providers. Although most webmasters are loyal to their affiliate programs, companies will feel the pressure as the competition becomes fiercer.

Adult film studio Vivid Entertainment saw the writing on the wall and has recently launched a service called Vivid Burn to DVD. The new service allows viewers to download the studio’s popular adult films directly from the Internet and burn a personal DVD copy on a home computer.

The burned video discs will play in any standard DVD player, permitting aficionados to watch them on TV just like the DVDs purchased at retail stores. The downloaded DVD file will also play on the computer to which it was originally downloaded.

"All you need to do is go to AllAdultChannel.com, click on download and then burn the disk automatically. It's as simple as downloading a song, but you'll have a personal DVD you can take anywhere you want and enjoy anytime you want," said Steven Hirsch, co-founder and co-chairman of Vivid Entertainment. The service will charge about US$20 per film.

For studios that do not have the capabilities or capital to launch their own web presence, GameLink offers a comprehensive solution to give participating studios an expertly managed, all-encompassing web presence. Ilan Buni, CEO of Gamelink, tells Klixxx, “Studio content is currently offered to GameLink customers in multiple formats on our website, GameLink.com: streaming whole movies, streaming PPM, and download to rent or own in WMP and DivX formats, in addition to traditional DVD. We also have many industry-leading enhancements in the works -- soon studio content will be offered as an iTunes download, to be used with iPhone, iPod and iTV, as well as other soon-to-be-announced plans.”

In addition, GameLink provides studios with their own branded eCommerce solution, allowing them to offer their movies using their own brand and URL in all the above formats. Ilan explains, “We manage the studio's mailing list to ensure customer retention, and run multiple online marketing campaigns to promote their content. GameLink can also create and manage a high profile membership site for the studio and its fans, and create and manage dozens of niche membership sites with the studio content, all feeding into the studio's membership and eCommerce sites. We have an active affiliate program for any or all of these site options, with numerous studios already participating.”

Tom Yoffe of Caballero Video adds, “Caballero is looking for other avenues to sell DVDs and, at the same time, to partner with internet companies. We are also investing heavily in streaming and downloadable movies. The DVD business is declining and the future is in the Internet.”

Bob Dylan sang in 1964, “The Times They Are A-Changin’.” Two decades later, this phrase was quoted by Steve Jobs when Apple Computer introduced the first Macintosh computer, Macintosh 128K, in 1984. In 2008, almost a quarter of a century after the introduction of the first Macintosh, this phrase still rings true.

Though the task may seem futile at times, it is absolutely necessary that adult webmasters stay abreast of the latest industry trends in order to understand their implications and integrate them into their business plans as seen fit.