December 2004: Holiday Update!
A State of the Industry Commentary by Scott Rabinowitz of
Traffic Dude
Happy holidays to all industry colleagues worldwide! No matter what overall industry and profit margins look like as 2004 comes to a close, this is a time to reflect on what is important outside of your balance sheet, to take stock of whom and what is going on around us and to feel good that we made it through another year. At the same time, December is the month when us 'human-types' need to recharge our batteries so we can be ready in mind and body for the New Year.
Regardless of your business model, company size or projected income, all people working in and around the online adult business realm can attest to new and increased challenges being part of our professional realities in 2004. Rather than focusing much energy on specific and known events and issues such as Acacia, credit card processing, presidential elections, obscenity pursuits, etc., let's take a summary peek at what has happened so far this year and trends that look to carry over into 2005 and beyond.
On the content front, the message for the immediate and mid range future seems quite clear. Whether it is related to model release documentation or how hardcore your publicly visible images are, most governing bodies, government or private seem intent on eliminating easy access to "questionable" content online. We can see this through multiple hot button changes this year, including enhanced efforts to enforce obscenity laws across the world and even new marketing channels and traffic streams that are of high value to adult Web merchants, yet have a zero tolerance policy towards promotional materials that are deemed to be on the question mark line for legality of viewing.
Legal storms related to patent and intellectual property, although a fairly new burden for adult companies to shoulder, are not new to the world of business, and will very likely become a larger and ongoing reality for our industry. As such, rather than finding ways around legal issues, it is a wiser course for all of us to factor more legal expenses into operating budgets for the coming years. Consider on the up side, only some of your ongoing legal expenses need to be for fighting issues that arise, with the rest being allocated to better records management policies, tighter contracts between you, your clients and your vendors, and then finally to establish pro-active legal protection for intellectual property (such as software, business processes, etc.) that you or your company creates. The pro-active part might even mean new revenue streams for your group in the future.
Billing customers and getting paid by merchant processing companies has certainly been more on the minds of everyone in this business as of late. While the good fight to get paid by providers who have money problems of their own needs to continue, there is a larger overall message here than one processor or transaction method being better than others. The message, quite simply, is the need to diversify how you and your company generate revenue. With so many challenges and outside legal issues affecting the established core adult business of subscription revenue via consumers, all companies that are looking to keep growing, beyond the core business, should be looking at various possible secondary revenue streams to provide strength even for firms that made millions of dollars from the traditional adult business models in years past. Your accountants will love you for this and you may find that some of your smaller revenue streams that are in place can be grown to levels that can impact your entire operation.
To everyone still involved with this business and planning for the future, our hats off to you. More will be required of you professionally, and you may not displace Donald Trump or Bill Gates on next year's Forbes wealth lists. At the same time, you will be sewing the seeds of longer term opportunities for you and your company than anyone could ever imagine.
- Traffic Dude
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