The Phoenix Forum Delivers on Day Two

Mar 30, 2012 11:15 PM PST

TEMPE, Ariz. – The Phoenix Forum went deeper on Friday as industry heavyweights weighed in on big issues affecting adult businesses while dozens more online pros spent quality time networking at the Tempe Mission Palms.

With a second straight day of sunny skies sending temperatures into the upper 80s, the drinks flowed and the mood was upbeat at the anticipated Sponsor Meet Market that unfolded late in the afternoon around the courtyard.

But it wasn’t all fun and games at one of adult’s most popular online business conferences. Not with the high-profile myth-busting session that highlighted the morning seminar slate and the straight-shooting Legal 101 panel that followed after lunch.

In the session titled “Real vs. Hype” skillfully moderated by Pink Visual president Allison Vivas, an all-star group of executives determined if numerous buzz-worthy topics were either “real” or “hype” by holding up cardboard signs.

The panel included Ron Cadwell, CEO of CWIE Holding Co., parent company of CCBill, the host of The Forum; Diane Duke, executive director of Free Speech Coalition; Alec Helmy, founder and publisher of XBIZ; Ed Kunkel, COO of The Dating Network; Mitch Farber, president of NetBilling; Brad Mitchell, CEO of MojoHost; Kim Nielsen, CEO of ATKingdom and ATKCash; and Morgan Sommer, president of Cybersocket.

Vivas asked Duke to dispel the myth that FSC handles only First Amendment issues. Duke said FSC is active in numerous facets of the industry, including assisting brick-and-mortar retailers with zoning problems and striving to improve performer health and safety protocols.

“We do the broad spectrum,” Duke assured.

Something that many of the panelists had a strong opinion about was Vivas' topic that “there is less adult revenue being generated today than in 2005.”

“The number of merchants has changed but not as far as revenue,” said NetBilling’s Farber, who’s been in the industry since 1997.

Cadwell told the group, “We’re doing more business this month than we ever have. … There is a new generation of people coming in.”

And Kunkel added with tongue in cheek “the dating market is blowing up, but don’t go out and make a site, please.”

Others however offered more sobering takes on the state of the industry. Cybersocket’s Sommer pointed out that nowadays “people are working harder to make the same amount of money.”

FSC’s Duke said the industry “has matured,” and that prospective entrepreneurs should be asking themselves, “do you have a solid business plan?” Not to mention an attorney.

While the majority of the panel indicated that their bottom lines remain quite comparable if not better than they were in ’05, XBIZ’s Helmy said the reality is the industry at large has been widely affected by factors such as the proliferation of free porn on the Internet.

“On an aggregate level it has shrunk,” Helmy said. “When something that had value is now available for free on a mass level, I’m sorry I refuse to believe that doesn’t have a direct impact on the revenues of countless companies.”

Vivas asked the group for their views on the .XXX TLD, which remains a largely polarizing topic.

“I’m sure a lot of people are upset that they spent the money because I can’t think of one .XXX site that someone’s taken and really blown up,” said CCBill’s Cadwell. 

Helmy said that he took a neutral position on it because "at the end of the day they have a right to exist and people will either support it or not support it."

“If it gives you the opportunity to have an enhanced brand, that’s the deciding factor,” he reasoned.

Meanwhile, on the subject of whether offshore payment processing is “better” than processing with a merchant account in the U.S., NetBilling's Farber said "there’s advantages to both.”

“If you’re a company that’s outside the U.S., I would recommend the offshore merchant account, because it’s difficult to get a U.S. merchant account if you’re a foreign company, except for Canada," Farber said. 

Farber added that U.S. companies should stay domestic and benefit from the increased technical support and risk management. And, he added, by staying domestic “you get paid daily.”

“Offshore, some are daily, but typically it’s weekly,” Farber said.

Vivas asked if affiliate programs were dead, to which ATKingdom’s Nielsen replied, “I would say no, they’re not completely dead. There are a smaller share of revenues simply because I think less companies are able to make a profit.

“Yes it’s diminishing but still there are opportunities to be partnering with other sites to replace lost revenue."

The Dating Network’s Kunkel also dismissed the notion that “all dating sites are scams."

“We get people that contact us all the time that say, ‘Thank you. Hey, I got laid,’” Kunkel cracked.

The featured legal panel of the conference brought together a diverse group led by attorneys J.D. Odenberger, Corey Silverstein, John Steele and Larry Walters.

Jason Tucker of Battleship Stance, an intellectual property management and enforcement consulting firm, joined the lawyers to cover subjects such as 2257 compliance, obscenity, piracy, mandatory condoms and election year porn politics. AVN’s Tom Hymes moderated the session.

The Detroit-based Silverstein, who has handled adult-related cases for the past 10 years, described how “the handshake deal” has become “like an epidemic.” These revenue-sharing deals and agreements to buy and sell content can go south in a hurry when nothing is put in ink, Silverstein cautioned.

“We still have to be cognizant,” he said. “When you get into a business agreement, one of the fundamentals is you need to get all your paperwork done. You need to know what you’re getting yourself into.”

Fundamental questions such as what are you selling, what are you selling it for, and do you have the rights to sell it, all should be asked up front.

Tucker said that when he’s consulting, “one of the first questions I ask is who owns the content?”

Walters, who has been representing adult webmasters since 1994, said there would always be what he calls “boogeyman issues,” but the “real world issues” are much more basic.

“Issues such as shareholder agreements and partner agreements,” Walters said. “There needs to be a clear understanding of who owns what.” 

In keeping with the collegiate-themed seminar tracks, the Day Two lineup also included discussions such as Billing 301, Mobile 301, Photography 101 - Art Meets Business and Web Lab 101 - Design Principles.

As night fell, Juicy Ads geared up for the YNOT Grand Prix at F1 Raceway, Next Door Buddy Profits hosted its Friday Night Heat Buddy Lounge and Smashbucks shuffled the deck for its Latenight Poker Lounge.

AdultCentro and Sofort teamed up again for their Work Hard, Play Hard Suite, while TrafficHaus, and Reporo also hosted lounge gatherings as attendees began to unwind.

The show will reach its climax on Saturday with events such as Extreme Poolside Networking, the first EU Forum at TPF and the hotly contested Naked Dodgeball game set for 4 p.m. sharp.

For additional coverage, click here.

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