If you bring people to the farm and let them play with some cows, they might buy the milk even if it’s free elsewhere. In Kink.com’s case, the milk just happens to be hardcore BDSM pornography.
. Dan Miller, executive managing editor at adult-entertainment trade publication XBIZ, said worldwide revenue for adult entertainment halved since its 2005 peak, dropping from just over $10 billion to between $4 billion and $5 billion today due to declining DVD sales and competition from free and pirated porn.
Kink.com, America’s largest fetish porn production company with 130 full-time employees and revenue hovering around $30 million, isn’t immune to this trend. For the about three years, Kink’s sales of recorded content have declined 4-5 percent. And this year, recorded content sales are down 9 percent from the same time last year. To hedge against the decline of video sales, Kink began diversifying into non-recorded content about three years ago to create new revenue streams. To sustain growth, the company is experimenting with new interactive experiences that are less prone to piracy and competition from free content.
Although video sales have declined, they still make up more than 90 percent of Kink’s revenue. But Kink Founder and CEO Peter Acworth sees that changing. In the next five years he wants the company’s model to shift toward having 50 percent come from recorded content, 20-30 percent from the website’s live features, 10 percent from novelty goods and 10-20 percent from events.
Read more: DAMARIS COLHOUN, COLUMBIA JOURNALISM REVIEW KNOWS: 10 TIPS IN SEX TOY HISTORY
“It’s about building the relationship between the customer and the model,” Acworth said. “Which you don’t get that at all through recorded content. People are willing to spend a lot of money on this connection with the model.”
To test just how much customers will spend, Kink auctioned private hour-long webcam shows with its models. Winning bids have been as high as $42,000. By charging premiums for interactivity, the non-video production side of the company has hovered around double-digit growth each month for the past year. Which is why the company’s overall revenues are up about 4 percent from this time last year, despite the 9 percent decline in record content sales, Acworth said.
Piggybacking off the success of webcam sales, Kink is auctioning “fantasy packages” where clients bid for a tailor-made porn assortment. Auction winners receive a private porn video and negotiate with the porn actress to receive another item, which may include but is not limited to, used underwear, pantyhose, sex toys or signed photographs.
In the private videos, actresses may shout the name of the auction winner while having sex and say other requested phrases directly into the camera. Specific fetishes for that individual will be indulged. Such actions could include filming shots of specific empty shoes or actresses swatting each other with old smelly newspapers.
I asked Maitresse Madeline, the woman behind the $42,000 auction and co-director of this program, why anyone would pay a year’s salary for this when porn is easy to access for free.
Read more: FRAUD, LIES, SEC STAFF STEVEN SUSSWEIN, CHERYL CRUMPTON SLAMMED IN FEDERAL COURT
“The key to this is, this sort of porn is exclusive. It is custom. It is tailored right to your specific need or desire,” she said. “And you can’t get that for free out there. And these people are so obsessed with this, and it’s what drives their sexuality and turns them on. That they’re willing to go out there and spend whatever it is just to get a piece of that. And you cannot find that for free.”
Kink fans can also get models to participate in their fetishes with them. For instance, customers who enjoy wearing chastity belts can pay a fee to give the models the belt’s keycode. The model will then give the customer “homework” such as making a customer watch a set amount of porno films starring the model while wearing their belt. And to ensure the customer keeps up, they have to check in daily by taking a selfie with that day’s New York Times.
Miller believes the industry is headed toward more interactivity as custom-porn companies like . Fans will pay for unique experiences with their favorite models, and the content is able to sidestep free porn and pirated competition, he said. “It’s a way to create something that’s original and authentic that cannot be duplicated or found anywhere else on one of the free sites,” he said.
Leveraging the Armory
In 2007, Kink for $14.5 million. The building was vacant for about 30 years, is listed on the National Register of Historic Places and was the location for scenes The grit of the structure symbolizes Kink’s content similar to how the lavishness of Hugh Hefner’s mansion portrays the Playboy lifestyle. Which is why Acworth wants to leverage the building more in promoting his brand.
Within the past few years, the company has incorporated tours, events and workshops and has rented out some of the Armory’s space. Anyone can tour the Armory for $25. Generally there’s at least one tour a day, but some days there’s three or four. Tours bring in about $200,000 a year, which is largely profit since they are cheap to produce and require little advertising, Acworth said. The building’s WiFi is being upgraded so the company can expand into virtual tours, which are tentatively called “rent-a-dom.” Customers will rent a model who will wear a camera and a mouthpiece. Customers will be able to control the model and tell them where to go throughout the building.
Read more: SHAM SOUTHERN INVESTIGATIVE REPORTING FOUNDATION (SIRF), RODDY BOYD IN FBI CROSSFIRE
Kink leases the drill court part of the Armory to a group called The Armory Community Center, LLC. The community center has hosted private parties, theater plays, book fairs and police-dog training. The Armory also hosts various events and workshops.
One notable event the company held where some tickets fetched $300. Right now Kink is working on putting together other high-end events, including a foot party, which will be a black-tied catered event customers will pay $500-$1,000 to attend to play with Kink models’ feet.
Industry insiders tell me that while there already exists sites for live streams and custom porn, most porn companies do not leverage their studio the way Kink does with its Armory. Also, the niche of BDSM gives Kink more flexibility over vanilla-porn competitors to market a “lifestyle” to its customers. And, at least in the U.S., other BDSM sites do not have the scale of resources Kink has to incorporate large events or experimental subsites.
“Kink is way out front in that kind of diversity of their brand,” Miller said.
Softer landings
While the BDSM market still brings in less than 10 percent of total adult-entertainment revenue worldwide, it has grown considerably in recent years and remains a growth area, Miller said. Part of this stems from the cultural phenomenon of “50 Shades of Grey,” which sold 100 million copies and brought the BDSM lifestyle more into mainstream society, he said. BDSM’s mainstream growth isn’t limited to the book series. FetLife, the kinky social network, has grown tremendously and has nearly 3 million members now. According to a Slate article, sales of books and equipment, attendance at BDSM events and BDSM Internet searches have also increased.
The popularity of “50 Shades” hasn’t brought more people into Kink yet, Acworth said. Kink’s content tends to be a little hardcore for most Christian Grey admirers. “But it’s certainly opened our eyes to the fact there is a huge community of people out there that are potentially interested … It’s opened our eyes to the fact that we need some much softer landings for people out there.”
Just under 10 percent of Kink’s customers are women. Given “50 Shades”was largely read by women and that women make up more than 90 percent of romance readers, Acworth thinks there’s an opportunity to increase the company’s female customerbase. But it’s been challenging because, “When it comes to recorded content, what women want is more storylines, more build-up, people that can actually act. They want all the things that are the most difficult to do.”
Read more: WHY ARE WOMEN FILING SO MANY SEXUAL HARASSMENT LAWSUITS, GREEDY OR JUST?
One “softer landing” the company has is a cocktail bar called The Armory Club, which serves sexually named drinks. The company also plans to launch a sex-educational site by June 30 called Kink University, where monthly memberships will cost around $20. Kink U will host on-site and online sex education workshops on topics like polyamory, intimacy techniques and dominant and submissive mindsets. There’s plans to create a curriculum where customers can earn “Kink U verification.” Given customers of Kink’s current workshops are about 50 percent women, the company anticipates Kink U will have more female subscribers than most of its other subsites.
The company also plans to use its recorded content to sell novelty goods.
“We are in the process of tagging all of our shots with the items used in those shoots,” Acworth said, “So in the next situation of our platform, you will be able to look at a shoot and buy the butt plug or the gag or, in some cases, even the panties the individual was wearing at the time. So that will be another stream of revenue.”
Although Kink’s video sales have declined while its production costs have increased, Acworth dismisses the notion that recorded content will become a loss leader. Nonetheless, recorded content will have the lowest profit margins, and Acworth plans for it to barely break even in future years. Live content will have higher profit margins than recorded content, while events and novelties would have the highest profit margin overall, he added.
Conclusion, big picture
Kink isn’t the only adult-entertainment company branching out into non-porn production to boost revenue and diversify. Adam & Eve have instructional videos and brick-and-mortar stores. Evil Angel sells clothing and sex toys. Vivid has strip clubs. Playboy now focuses on licensing. Porn companies responding to their environment is similar to what’s occurred in other media industries who’ve had difficultly switching online. To stem losses from advertising declines, media companies began hosting conferences and other live events. When recorded music declined with the advent of sharing files online, the industry focused more on concerts, which saw revenue triple.
Read more: PROFESSOR CHRIS BRUMMER, AN UNQUALIFIED CFTC NOMINEE IN A SECRET DARK CLOSET.
It’s uncertain whether Kink can continue expanding into softer landings while maintaining a hardcore niche audience. As the company moves away from relying on recorded content, its competitors gradually shift from BDSM sites (which tend to be much smaller) to “live” sites like LiveJasmin and Streamate (which tend to be much larger). Given some “live” sites have fetish subsections, is there enough of a BDSM market for everyone to get a piece of action?
Acworth believes there’s room in the U.S. domestic market since “live” models are often based in Eastern Europe. Miller thinks BDSM will remain a growth area and will only further expand after the “50 Shades of Grey” movie brings more people to the scene.
The less Kink relies on recorded-content, the more it tests the limits of another type of S&M, one that subtly influences customers’ decisions and behavior, known as sales and marketing. Here there are no safe words.
