How to Make Money Like a Porn Star

For the sake of argument, let's assume that you are able to create content that people want to consume. How do you monetize it? The adult content industry continues to lead the way in monetizing content, adopting new technologies, and testing distribution models. At SXSW Interactive, porn publishers gathered to share best business practices with the next generation of mainstream media. (Disclosure note: Panelist links undoubtedly go directly to adult content - but I'm not sure, since I was too chicken to click through myself!)

Revenue

Amelia G left magazine publishing for the superior cash flows of the Internet. She brought along this lesson, however: Edgy or niche content is best sustained via a subscription model. In traditional publishing, it's unusual for a magazine to be subscription-driven rather than advertising-driven. In pornography, however, you don't have the option of being advertiser-driven. A subscription model is not only possible, but necessary, since most advertisers are not comfortable with adult content.

As a result, adult publishers adopt the rigor necessary to cultivate a sustainable base of subscribers. An adult content consumer will pay $50 to watch 20 minutes of video. If they like it, they'll go to the producer's (or star's) core site and sign up as a member for $20/month in order to receive unlimited amounts of that content. This is the long tail that mainstream media sites dream about reaching.

After her transition to Internet publishing, G also looked at how people made money in affiliate networks. She found that it's not the 5% commission on clothing or books. Instead, affiliates make money from the 50% commissions associated with memberships. The top payouts? Subscriptions to the Wall Street Journal or the Harvard Business Review.

Porn site producer John Halcyon Styn confirmed the value of participating in affiliate marketing programs. As an illicit, somewhat restricted consumer good, porn benefits from a high perceptive value. Accordingly, the high average revenue per user (ARPU) means that the adult industry is highly lucrative for affiliates. Because of this dynamic, there's an interesting quirk of adult content businesses: publishers often end up promoting their competitors. For example, if a user comes to Site A and doesn't join up, Site A could recommend Site B and still capture the affiliate revenue. No matter what site the customer actually joins, the first site that the user visits is likely to earn revenue. Any time someone visits your site, you have an opportunity to market something.

Marketing and promotion

The adult industry consistently must separate out their site's freeloaders from its potential paying customers. The upsell from free content to paid membership is the publisher's most important goal for each new site visitor.

Styn provided crisp instruction on how to achieve this goal: "If you want a paying customer, then you need to offer more convenience, quality, or quantity than the user would be able to find for free." e.g., if most people only tasted the free cream puff samples at Costco, Costco would stop offering them. Instead, a critical mass of shoppers is saying "I have to have MORE of these!" and buying cream puffs by the case. Whether at Costco or at a content site, a business must both tell the difference  between these customers and optimize its revenue against the promotional costs of serving both of thema them.

Seska Lee called out the biggest down side of running your own affiliate program: the need to produce fresh content. Affiliates always want something new. That being said, ready-made promotional materials tend to pay for themselves once distributed to affiliates. Lee also noted that affiliates may make sales commitments that your site can't deliver on - e.g., they advertise that you offer photos of brunettes, but you only have photos of blondes. Also, some affiliates will want to actually have licensed copies of content, rather than simply redirecting customers to your own hosted content..

Site and content design

Styn and G agree: People often criticize adult sites for their poor design, but bad design is often intentional. Put simply, 'bad design' produces more revenue. Not just more profits, but more revenue. Why? High production values and good, updated designs imply mainstream media. Simple, unsophisticated, or even bad design helps the user to either (1) feel like they are in the know, or (2) believe that the content is more 'real.' This feedback was the exact opposite of the advice given by Kathy Sierra in her earlier keynote. I suspect that this in part due to the difference between 'what kind of content consumers like' and 'what kind of applications do consumers want to use,' but comments from experts here are welcome. 

This contradictory path to success is also reflected in the content itself. As Styn slyly commented, people aren't watching porn for its production values. And again, low production values means that the content appears more real. Very few producers are able to justify the extra expense of raising the production values, relative to the additional revenue that is brought in. In addition, the frequency of video releases is prohibitively high. 5000 video units sold is a good number, so you have to make lots of videos, and make them cheaply.

Like podcasting and internet television, adult content is highly profitable, niche-focused industry. It will be interesting to see how these business practices inform the scalable business models that end up emerging from the current crop of Web content producers.

Comments

[lolmoney.org]

I can actually vouch very much for stories like this. I quit my office job after a string of porn sites i started began performing extremely well. There is no excuse for anyone with computer knowledge to be incapable of making at least $3k+/month.

very good article (:

[asiaerotica.com]

AntiPorn:
I kind of dislike the term porn. It

carries a negative connotation that makes

it easier for people to point fingers and

say "this is sleezy and detrimental" I use

the term antiporn for the works that I do

and I literally refer to them as

docueroticas. Ultimately, like all art,

from the progression of the fresco to the

ability oil painting gave to individual

artists to create a Frame within which to

depict their imagination and reality as

they saw it, technology that enables

people to participate in and create their

own visions of erotica, sexuality or life

in any way, shape, and form is better when

it is democratized and readily available

to those that appreciate it. As for what

is appropriate for the public view, I

consider the temples of Katmandu Nepal and

the art on the struts of those temples and

holy places as a place to start in seeing

how other cultures and great religions

view explicit sexuality.

[Jose Edmund Villamar]

i want to earn profit so what im going to do so that i know what im doing

[ollie]

let me tell you everyone how i making over $5000 dollars a month in the 3rd month of trading and look to increase my sales/membership every month in the thousands. oh and i can prove it.

3 months ago i started a adult video sharing site on the same concept as redtube youporn,pornhub.

its called redlightworld.com check it out

i paid a guy called ted to do all the work for me webdesign,the programs which run the site and some advertising.

he was recommended to me by a friend who worked with him for over 10 years in the adult industry.

he delivered big time i up and running and have over 330 members paying $9.99 a month reacurring and growing daily.

plus revenue coming in from my wecams and video on demand affiliates.

within 3 months ive gone from being unlisted in alexa.com search rankings 138,484 visited website in the world ha! that means i get about 5,000 unique hits per day and getting more popular i.e. page views by the day.see for yourself.

we have over 4 thousand user submitted videos growing daily,

this is the fastest growing sector of the porn industry at the momoent and is set to increase as more people get faster connections.

its a red hot industry, and ive just quit my job no more 9-5 for me. also to say my computer skills are not good and if it can work for me it definatley work for you.

why am i telling you this well ,i spoke to ted and if anyone uses his expertise and knowledge from me he will always be there for me.

he does charge from $2,000 up to $25,000 depending on what you want from him ,and what you got to invest and obviosly how quickly you want to see a return on your investment.

i personally paid $25,000 and will get that back easily in the 4 months and then its all profit baby. i love it

if you do want to get to speak to ted you can contact him,

xop32@hotmail.com or through me contact threw redlightworld.com

please mention that you read this so he knows it was from me ian .

thanks everyone hope to see some of you in vegas at the porn conventions im really looking forward to it

[Pleasurable 1]

I need to make money fast...and I would love to be a partnership with a great producer..I have great ideas I'm very creative...so lets produce a lots of videos...please reply with some help...asap!

Pleasurable 1

[Terry Minnick]

I need to make alot of money quickly . I'm 33 Blue eyes and very fit with a Nice 8" of power . Please help

[Fantastic Frank]

I have a question because I am interested in buying one of the turn key porn websites.

is that a good way to get in to this business and that I am intereested in bring in some money by having me make a number of audlt movies too but that I don't yet have the resources (money & the correct people to do both @ the same time) the filming and the production.

I willl be ready soon but then I need the expertice to get them on line and then generate traffic for my cash flow.

. so help me if you are interested.. get back to me

Thanks

Fantastic Frank

[Patrick]

Hello I would like peoples opinion on
www.bigsister.net

We are looking to monetise our content on a global level.

Thanks.

Patrick

[anonymous email]

Have you ever watched french porn? I rather prefer to watch a french Marc Dorcel movie than a "lousy" produced amateur porn.
They have better actors, a nice cut between scenes and proper lightening.

I think the most important factor is to know what your users wants. You have to understand that there is mainstream porn and niche porn. A lousy produced mainstream porn movie will not sell unless you have already your sales channels.

What about user interaction? I have seen some pages with a forum for paying users. Building up a community for a niche porn site is not a bad idea I think. Does anyone have some infos about it?

[Mark Johnson]

I love the comment about sending users to another site for affiliate revenue. If only a fraction of the users on your site actually convert, that means that a large percentage isn't being satisfied. Even if you get really good conversations, you'll never be able to satisfy everyone. Instead of throwing up your hands, why not try to make a few bucks and satisfy the user in the process by sending them to a site that will satisfy their needs?

[Christine]

Thanks to all for the helpful dialogue --- I think that a lot of folks make assumptions of what is meant by "good" or "bad" design, especially when meanings are informed from different contexts.

@Kathy: Your talk is already great! Folks were buzzing about it all afternoon.

[baldur]

Actually, the dichotomies of low production values vs. high production values, and unsophisticated vs. sophisticated are unstable, arbitrary and untrue.

As Liz does, "bad" needs to be put in scary quotes.

It is akin to saying in photography that grain is bad or black and white is bad.

Each design is a mix of styles. A good designer can use some of the symbols and visual grammar of what we associate with unsophisticated, improvised and "real" designs.

The end result might easily be something that feels real, is gritty, looks like something crude but is sophisticated and puts us exactly in the state of mind the designer intended.

All designs are just stylistic dialects which a competent designer can play upon. Each new symbol and movement that arises in social interplay becomes just another tool a designer can use to affect us: to pluck our emotions out of the air and play with our hearts.

[Liz Henry]

I like the point about "bad" design. It's a good point to make in response to some of the things said in the panel on social class and design. Rawness has its own aesthetic that suggests authenticity, immediacy, and distance from both corporate branding and upper class or middle class values.

[Kathy Sierra]

Actually, I agree with the notion of unsophisticated design and low production values having value on a lot of levels, and advocate for it (my books use hand-drawn annotations, for example). If I gave the opposite impression in my talk today, that's good feedback for me, since it wasn't my intention! I advocate for good user learning -- helping your users kick ass -- and while that requires good attention to things like interaction user docs, that's a very different question from the design itself -- especially where production values are concerned.

I'll have to work on my talk... like I said, I never meant to give the impression that a product needs (or even SHOULD have) high production values.

This was a great write-up of a panel I wish I'd attended!