VOD

Adult Industry Faces Vivid Challenges

10/01/2012 3:00 AM Eastern

Ken Boenish, the longtime president of adult programmer New Frontier Media, was tapped in August to head up Vivid Entertainment’s pay TV unit, VividTV. He recently talked to Multichannel News programming editor R. Thomas Umstead about the sluggish state of the adult pay-per-view/video-on-demand business, and what content providers and distributors can do to boost revenue in the face of online competition. An edited transcript follows:

MCN: What is the state of the adult payper- view/VOD business today given the competition from other platforms such as the Web?

Ken Boenish: If we look at the market trends, pretty much everyone in the business recognizes that adult content on TV platforms has been trending down. So from my perspective it’s really looking at why that is happening and what we can do about it. The answer is pretty simple — it comes down to product and price. If you don’t have the right product at the right price your audience is likely to go elsewhere just like any other entertainment platform offered.

We hit the perfect storm in 2008 with the economic downturn. There was downward pressure on consumer spending; the economy was heading into a real rough spot; operators were raising prices on adult products — in some cases it was $15 for an adult movie — and the online experience, through better data speeds, was becoming more and more satisfying, with companies releasing tube sites with free content.

MCN: How does the adult category reverse the trend?

KB: Just like anything, there is premium content that they can’t get for free and can’t get inexpensively online. Companies like Vivid [Entertainment] have done a good job of protecting their product and not letting it become available on tube sites or discounted websites. They can really offer operators the compelling and unique content offering that customers can’t get anywhere else.

MCN: What’s the best model for adult content to be sold on cable?

KB: I think that the real key to success is having some kind of content at a less expensive price point, like single scenes anywhere from a $1.99 to $3.99; multi-scene compilations that are a half hour in length somewhere around $5.99 and full-length movies somewhere under $10. That, coupled with a strong monthly subscription offering with a sweet spot around $15 to $20. From my experience I think that really effective pricing would bring people back into the category and back more often.

MCN: Where do you see the marketplace going forward?

KB: I think that television is a very good business going forward. Even in an environment where, clearly, the product is overpriced, cable and satellite operators still sell a lot of content. That tells us that there is definitely a huge value proposition when it comes to TV. I think the future looks like cable operators settling in on a handful of very big brands that are supported with content that is not overexposed and not available for free online, and that are very serious about creating a content experience that is a premium experience just like HBO or any other premium channel. I think, going forward, a combination of transactional and monthly subscription [fees] really makes a lot of sense.

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