IPTV: Pay-By-The-Minute Model For Porn. Internet protocol television (IPTV) is prompting some in the adult movie industry to propose a new pay-by-minute business model as they prepare for the death of DVD sales. National A-1 Internet Inc., which owns and operates family and adult movie sites, has offered the pay-by-minute model for streaming content from its Web sites for years. "One day people will watch the movies on their TV streamed from Internet sites, direct from the servers any movie they want," said James Seibert, director of businesses development at National A-1 Internet Inc. "We believe the TV and computer are becoming one. I watch TV through my PC now." Seibert wants more adult video content sites to move to a pay-by-minute business model and hopes the cable companies will follow as IPTV rolls into mainstream. The business is lucrative. After all, these sites stream video on average more than 550,000 minutes daily. And at hot movies, the average price is between 10 cents and 11 cents per minute. Some believe Seibert's concerns that the technology is not "open to the full Internet" will become available within two years are premature. An industry source said, "We are nowhere close to offering consumers the ability to turn on the TV and surf the Web." Direct TV, Echostar and variety of digital cable companies that offer adult content charge a flat fee per movie. Comcast Corp. director of corporate communications Tim Fitzpatrick declined to comment on the speculation. Cable providers offer a handful of adult content along with family content, but sites such as National A-1, offers more than 32,000 to choose from. Instead of paying $7 and $10 per movie, consumers could watch a few minutes of entertainment for $1. Seibert is trying to prepare the adult content market for the shift to IPTV. "There already are quotes from Microsoft's Bill Gates on the Web talking about the death of DVDs," he said. "Other large companies realize DVDs will become the last hard media that you use. It's all coming down to hard drives and digital downloads." . Parents attempting to keep kids away from Internet pornography can buy software, such as Safe Eyes or Net Nanny block these Web sites from home computers. More than 77 million kids are online today, according to Protect Kids. It's too early to determine how cable or set-top box operators might do the same. Even as tens of thousands of people have descended on Sin City to find out about new technologies at the Consumer Electronics Show, an entirely different crowd gathered to learn about the latest tech in use in the adult video industry. More than 120 people from throughout the adult industry gathered on Friday at the Sands Expo and Convention Center in Las Vegas for a session at the Adult Entertainment Expo titled "Every which way -- The latest technological advances in entertainment." And during the 90-minute session, a group of Web site owners and content providers explained about the newest ways they're utilising the Internet and high-tech to get porn into the hands of an eager worldwide audience. New technological advances in porn distribution, of course, have a broad impact. According to statistics gathered by Adult Video News, the adult industry did $12bn in business in 2005, making it even bigger than videogames -- which itself has grown to be bigger than Hollywood. Of that, said the talk's moderator, Mark Friedler, CEO of videogame reviews site GameDaily, 55 per cent comes from video and DVD or Internet sales. All told, he said, 13,600 new porn titles were produced in 2005 and there were 957 million rentals of those titles. But as the adult industry tries to find new avenues to get its content to consumers, it is turning increasingly to new distribution models, and Friday's panellists were on hand to share what they are doing. One new model is the pay-per-minute Internet porn site. Traditionally, online porn films have been available an entire film at a time, and for the price of an entire film. But new outfits like Hot Movies are hoping to score big business by partnering with 925 adult studios to make 32,000 films available to consumers by the minute. "The reason so many DVDs are sold is that until recently, there was no way to go to the Internet and pay per minute," Cohen said. "The majority of men... just want adult content." The idea, said Richard Cohen, Hot Movies founder, is that consumers don't want to have to pay for a full film when they only view a few minutes of a video at a time. Thus, his site offers films at around 10 cents (about 6p) a minute -- a model he likened to phone cards -- and lets consumers choose exactly which scenes in a film they want to watch and save in a bookmarked 'favourites' folder. And while the adult industry is dominated by studios like Vivid, Private and others, and dozens of porn stars are making the bulk of the films, Cohen said that's not how consumers ingest the content. Rather, they want specific types of content. Thus, Hot Movies allows people to search for keywords and then produces lists of films and specific scenes containing such content. Another new model in the adult industry is Internet Protocol-based television. One such service launching on Friday is Entice. According to Susan Keil, Entice.TV's CEO, the idea is to give consumers licence or subscription access to Internet-based porn that they can watch on their televisions. "We can do that now with any product that's out there," Keil said. "But what makes Entice.TV unique is that we're able to provide DVD quality... It's optimised for television." The site offers people the ability to subscribe and receive a specific number of videos per month, or lets them download films for either seven days or a month at a time. Alternatively, consumers can buy a long-term licence, which gives them the ability to watch a film as long as they stay a member of Entice.TV. Of course, the market for adult DVDs is still huge, and WantedList.com is one company attempting to leverage the Internet as a way to change the traditional distribution models. In fact, said Ahn Tran, founder of WantedList.com, his company is trying to take what Netflix has done for mainstream DVD rentals -- allow subscribers to rent DVDs by mail with no late charges -- and apply the model to porn. And new technology is also being applied in helping studios physically produce their DVDs. One company bringing the latest technology to that business is Kunaki, which has developed a platform for the quick digital transfer and archiving of adult content from the studios to the distributors. The idea, said Kunaki CEO Christian Strumm, is that digital technology can give studios the quickest possible way to turn their content into DVDs. He explained that studios would use Kunaki's software to create quick copies of their content. Then they would upload that content to Kunaki's servers. And finally, the company can quickly and cheaply produce the DVDs and send them on to distributors. All told, he said, the process can take as little as a day and can be done entirely on demand. "It's a low-volume, low-risk and low-inventory type" of business, Strumm said. "As soon as we get the digital order, it is manufactured and sent out." In any case, while much of the Adult Entertainment Expo is devoted to the physical products found at most adult-oriented shops, it's no surprise that an industry that was among the first to adopt nearly every Internet-related technology would once again focus on how the latest Net innovations can make it more profitable than ever.
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