Smartphones, mobile browsers and off-deck billing are giving adult providers a direct route to US consumers, says City Path's Mark Frieser
While the European and East Asian markets for mobile adult content have been well served for years, the US market barely registers. Revenue is $30 million at most in an overall premium services market worth $34 billion. It’s baffling, when you consider that the overall adult market generates $14 billion a year.
The explanation is an obvious one. It all comes down to the carriers.
Right from the start, the US operators have made it policy not to process adult services billing – whether directly through their portals or off-deck via Premium SMS. This lack of reliable billing effectively locked out all but a small number of content providers offering PG-rated content (no nipples).
And while the carriers know the revenue potential here (bikini shots are their most popular image downloads), they are too mindful of regulators and religious groups to rock the boat.
It’s all very different from Europe, where the existence of age verification and more relaxed cultural attitudes have allowed companies like Cherry Media to build successful white-label services for operators.
But I believe underying demand for adult content in the US is just too strong to be resisted. My faith in the market comes from launching the ClubJenna Chat premium SMS service in 2005. Although it was PG-rated, we faced huge challenges.
At one point, MTV returned a $200,000 ad buy because Jenna’s name was used in the advertising. Yet, the monthly profit after paying for technology, revenue shares and ads was consistently in six figures.
Clearly, US mobile consumers have always been ready to pay for real adult content: they just lacked the billing system and handsets to do so. Now a convergence of disruptive technologies has come together to change things.
In recent months, we’ve seen mobile offerings from Vivid, Playboy, iPorn, Penthouse, PornHub and others. They offer access to video, images and other content from $4.99 to $29.99 a month. No surprise that four of the top ten most trafficked iPhone sites are adult-related.
Let’s look at those disruptive factors:
Smartphones and Bandwidth
Perhaps the biggest factor in the creation of a viable US mobile porn market is the growth in smartphones and 3G. Together they allow the rapid video streaming and downloading of content and pages.
Today, an installed base of 50 million smartphones can access and buy adult content away from the carrier billing system. The UI of smartphones also helps with search and discovery. It’s meant that start-ups such as iPorn and My VIP Room, as well as established players like Vivid Video and Naughty America, are all going mobile on their own terms.
Direct Credit Card Billing
People are used to taking out their credit card to pay for porn. Now, it’s possible for them to use this billing system to pay for it on mobile. Whether subscription, per-item, timed or token-based charges, people can sign up directly through a web or mobile site for direct access.
This is the method being used by most adult mobile content providers, either as an add-on to an existing subscription, or as a stand-alone offer.
Simpler access to and marketing of content
Even the marketing and discovery process for adult content has evolved to offer a route around reluctant carriers and traditional media outlets. They include search engine optimisation/marketing on the web, promotion to an existing user base on an adult web portal, or banner advertising. All of these methods are more directly relevant to the potential audience, and unlike traditional advertising media, are more adult-friendly.
Thanks to these disparate factors, I’m convinced 2009 is going to be a breakout year for mobile porn in the US, prompting a generation of new services, growing revenue streams and high-levels of consumer adoption.
And most offerings will bypass mobile carriers to create adult services that are tailor-made for consumers, simple to pay for, easy to access and – dare I say it – profitable.
Advertisement
