Internet Video

U.S. Mobile Push Still 'Off Deck'

8/03/2007 8:00 PM Eastern

Adult content providers seeking to reach the growing U.S. mobile audience face an age-verification quagmire that stands between them and a promising new revenue stream.

How promising? According to Jupiter Research, adult content on mobile devices will be worth some $3.3 billion by 2011. Currently, Europe is the largest spender on adult content for mobile devices, while Asia is a close second.

“There is definitely more age verification in place in Europe,” said Ken Boenish, president of The Erotic Networks, which partners with more than 150 movie studios to bring its adult content to pay per view, video on demand, the Internet and portable devices. “I don't think any of the adult content providers want to put anything out there that doesn't have an age-verification platform in place.”

For that reason, Boenish said adult content is primarily “off deck” on mobile phones in the U.S., meaning users have to access the Internet and log on to a specific adult site to receive the service and verify their age. It's otherwise too difficult to verify that kids aren't accessing this content, according to Boenish.

TEN has experimented with mobile distribution outside of the United States and has garnered a respectable amount of success, Boenish said. In the U.K., content like racy photos and screensavers spawned full-fledged mobile video channels where users can view full motion video products.

The value of “on deck” partnerships isn't lost on Michael Klein, president of LFP, a leading distributor of adult video and DVD, print publications, Internet and adult retail stores. Hustler TV also falls under the LFP banner, now available in over 33 countries. Hustler TV brings top performing movies and original programs to pay per view and video on demand and is also the largest adult mobile content provider in Europe.

MORE REVENUE 'ON DECK'

“If it's on deck, it means more revenue because it's easier for people to access the content,” said Klein. “Unfortunately, carriers in North America are in a quandary right now over whether or not they should enable on-deck capabilities by implementing age verification on phones. They also question whether they should be including adult content on their phones in the first place.”

In a striking example of why mobile phone carriers struggle with the decision to carry adult content, Vancouver's archdiocese spearheaded a boycott against TELUS, Canada's No. 2 telecom company, which quietly launched an adult content service in January 2007 to its more than 5.1 million mobile phone customers. TELUS bowed to pressure from the church and cancelled its service, even though it registered and age-verified several thousand customers.

Chris Petrovic, vice president of digital media for Playboy TV is painfully aware of such hindrances eating into his company's mobile business, but it isn't preventing his company from creating buzz and a platform to sustain near- and long-term growth in the mobile arena.

“The content ratings, standards and overall perception of adult content in the U.S. is generally more conservative than those in international markets,” said Petrovic. “This is why carriers in the U.S. have not implemented the age verification and parental control systems that are currently being used by carriers outside of the U.S.”

To support its overseas mobile business and to ensure a solid platform is in place when it becomes more commonplace in the U.S., Playboy created a dedicated business unit that manages the company's mobile interests worldwide. The company is making fare that is compliant with U.S. content ratings and standards available directly to consumers through its own channels such as Playboymobile.com, as well as through third party content aggregators.

“As it relates to distributing our content directly through carriers, we continue to make progress in our discussions with tier-1 companies on making our global brand available to consumers, and in the meantime have secured on-deck distribution through a handful of mobile virtual network operators,” said Petrovic.

PLAYING WITH IPHONE

Playboy TV also leveraged some promotional wiggle room with Apple's iPhone dubbed iPlayboy, which allows users to download sexy wallpapers, photo galleries, Cyber Girl video snippets and an episode of Playboy Radio's Playmate Hour airing on Sirius Radio.

“The iPlayboy feature that we created was not the result of a deal with Apple or [iPhone carrier] AT&T, but was a promotional initiative that follows on the heels of similar offerings we created for the iPod and [Sony's Playstation Portable], all of which are meant to demonstrate Playboy's commitment to offering its branded content to users on any platform and device,” said Petrovic. “For iPlayboy in particular, all content available to iPhone customers is free.”

Hustler TV's Michael Klein is also figuring out innovative ways to build his company's brand and revenue on the mobile platform.

Hustler Mobile is doing “tremendously well” in Europe, Klein said, due to different “levels” of content that are offered to accommodate different market tastes and attitudes. A monthly Hustler TV package, where users pay a flat fee to receive video clips and ringtones is also dialing up revenue, Klein said.

This one-price delivery option provides new content on a monthly basis for a flat fee, a decision that was made in conjunction with Hustler TV's mobile partners, according to Klein. “They tried it, tested it and now it is growing.”

March