Private Media Wants to Be the Groupon of Porn

[Aussie Rebel]

I'm not sure if this has been posted or not, it's a 4 day old story.. Interesting though

Sex sells: The Barcelona-based adult movie company Private Media is taking a unique twist on an old mantra, preparing an ambitious effort to compete with free and unlicensed content online. Private?s goal is to completely revamp its entire business, generate revenue from advertising with a Groupon-like voucher twist and give away the majority of its content for free. ?There is no reason to continue to charge people,? said Private CEO Berth Milton during a phone conversation last Friday.

Like everyone in the porn business, Private has seen its revenues erode in recent years as consumers flock to file sharing networks and sites like YouPorn for free and unlicensed copies of their movies. A few competitors have started to sue end users for file sharing, but Milton doesn?t think this is the right way to go. ?We don?t mind P2P, that?s absolutely okay?, he told me, reiterating that noncommercial piracy can actually serve as promotion.

What he doesn?t like are adult YouTube clones, oftentimes called tube sites within the industry, that try to make money with his company?s content. Private has sued a number of these sites in the past, but now it wants to confront them head-on by opening up its own free and ad-supported porn sites.

The problem with this approach is that major brands usually don?t like to see their goods advertised next to movies like On Vacation With My Slut Sister. Tube and torrent sites tend to run ads for a few online dating services, and the CPMs for these ads bring in a fraction of the money major media outlets make online. Other sites try to get affiliate fees by redirecting users to paid porn, but Milton calls this a ?stupid business model.?

Private?s solution to this problem is pretty daring. The company is about to team up with a major Italian ad agency to get access to major brand advertising without any actual involvement of the companies that make these products. ?We don?t need approval for any of the luxury brands,? said Milton.

How will this work in detail? Let?s say fashion brand buys ad space on a traditional TV outlet through the agency. The brand pays the agency not in cash, but with its products valued at wholesale price. These products then get offered via Private?s sites for a outlet-like discount, and Private only gets paid for any actual sales.

Milton told me that this setup is inspired by Groupon?s voucher system. Some of the first items sold through this unique relationship will be clothing from major fashion brands and gym equipment. These sales will initially be restricted to Europe, but Milton hopes to quickly expand to the U.S. as well, and he firmly believes that he?ll be able to cater to millions and millions of customers. ?It will explode,? he said.

Private wants to supplement its ad income with other new revenue streams, ranging from an online casino it is going to launch in mid-February to a swingers hotel that is scheduled to open its doors in Barcelona in July. The hotel is a first test case, but Milton believes that he can quickly expand to 100 similar hotels operated on a franchise basis that specifically cater to swingers. And he isn?t ready to give up on selling content entirely; part of the hotel will be an offer for a free stay if guests are willing to have their escapades live-streamed on one of Private?s pay sites.

All of these plans are overshadowed by an ongoing legal struggle with some of Private?s investors over control of the company involving former CEO Ivan Buminovitz, who was ousted in July. Milton tried to assure me that the conflict won?t have any impact on his company?s move towards new business models, and recent regulatory filings seem to suggest that he does have the backing of a majority of stock holders. However, NASDAQ has threatened to delist Private as a result of the prolonged power struggle.

Still, Milton seems optimistic about Private?s future. He lamented that the porn biz spent too long holding onto old business models, thus effectively digging their own holes, all the while porn online is exploding. ?(Adult) companies are getting smaller, but the market is getting bigger,? he remarked. Milton believes that it?s overdue for companies like Private to profit from this trend. ?When I started, we could sell in a few select porn shops,? he said, adding: ?Now we can sell to a billion consumers.?

source: http://gigaom.com/video/groupon-porn/

[Agent 488]

think outside the box or die.

[moeloubani]

Does this say that to combat what they feel are the worst of the worst, tubes giving out free stuff, they will form a tube, and then on the tube they will give out free stuff?

[Agent 488]

Originally Posted by moeloubani

Does this say that to combat what they feel are the worst of the worst, tubes giving out free stuff, they will form a tube, and then on the tube they will give out free stuff?

read it again.

[harvey]

This has failure written all over it. The problems with Private didn't start with tubes, they started way before the tubes because they have no capable people running the online side of their business and they couldn't match what they did with their offline sources of revenue.

Anyway, I wrote an article a few months ago explaining why Private failed and will continue failing if they don't do something. If this is the something they were planning... well, I'd recommend you to sell your shares of Private.

I can see how and why they'll fail, they have a huge Damocles sword pending over their heads, and even though the final answer is very easy (and they even recognize the risks involved), I think that one of the main problems they had, and what is leading to this situation (besides the lack of knowledgeable human resources) is that they forgot what led them to the path of success. And to make it worse, they want to try a highly competitive business model while not having a clue about it.

Sorry if there's any Private guys around, I'm a huge fan of the brand and can't even understand why are you letting the brand fail this way. It's harsh, but it's true. At least, that's how I see it, take it fwiw

[Agent 488]

basically they are going to sell shoes and gym equipment on their tubes.

[BIGTYMER]

Smells like fail to me.

[harvey]

on a side note, it's amazing how business issues, including marketing and business organization trends that may shed a light on what everybody is crying about are ignored by most people here, the OP should have posted a "would you hit it" thread!

[Nathan]

Milton is going to destroy Private if he continues this way. That's my opinion...

His approach of selling goods on his tube sounds interesting.. if he had any traffic of course... He's trying to sue youjizz and get the domain, most likely because of this tactic.. thing he does not get is that suing any of those tubes will take longer than Private can survive under his control.

Private is not releasing new content, they are only revamping old shit... It's sad.. I actually saw a "Best of Best of" DVD in a store recently...

I am amazed the stock can stick to $1 still. It should be far below that considering that most likely they'll get de-listed soon.

[RycEric]

Originally Posted by Agent 488

basically they are going to sell shoes and gym equipment on their tubes.

I believe someone else has already tried that and experienced an EPIC FAIL.

[RycEric]

Originally Posted by Nathan

Milton is going to destroy Private if he continues this way. That's my opinion...

His approach of selling goods on his tube sounds interesting.. if he had any traffic of course... He's trying to sue youjizz and get the domain, most likely because of this tactic.. thing he does not get is that suing any of those tubes will take longer than Private can survive under his control.

Private is not releasing new content, they are only revamping old shit... It's sad.. I actually saw a "Best of Best of" DVD in a store recently...

I am amazed the stock can stick to $1 still. It should be far below that considering that most likely they'll get de-listed soon.

Have to say I agree. I told their counsel, at one time, they should just buy empflix.com because every release of theirs was on there.... just broken into 100's of scenes. It was for sale at one point.. not sure if it still is.

[stever]

Originally Posted by Nathan

I am amazed the stock can stick to $1 still. It should be far below that considering that most likely they'll get de-listed soon.

this new idea sounds great! NOT!
can i short the stock?

[RycEric]

http://biz.yahoo.com/e/110125/prvt8-k.html

[babymaker]

ehhhhhhhhhhh ok so they will sell jeans or something instead of cams?? ehhhhhhhh ok............. that will work just dandy lol :D

[harvey]

Originally Posted by RycEric

http://biz.yahoo.com/e/110125/prvt8-k.html

although interesting, I don't see how may it affect their business procedures.

Anyway, I think either Milton or someone in the management is trying a desperate move (unless they're doing a "not so desperate move" and there's more to this history) to save the company, but it seems to me they're clutching at straws. IMHO, more than MBAs they need someone who knows the online business.

[RycEric]

Originally Posted by harvey

although interesting, I don't see how may it affect their business procedures.

Anyway, I think either Milton or someone in the management is trying a desperate move (unless they're doing a "not so desperate move" and there's more to this history) to save the company, but it seems to me they're clutching at straws. IMHO, more than MBAs they need someone who knows the online business.

They could do a 10:1 reverse split and piss of their shareholders even more (if they are even allowed to). That might happen to avoid the delist.

[Nathan]

Ryc, they already did a 3:1 or 4:1 reverse split last year ;)

harvey, the only way to save Private is for Milton to leave. He has been destroying it for YEARS....

[mynameisjim]

Trying to make money from free is so played out, yet people seem hell bent on cracking the code thinking that it somehow has the magical powers to turn around any failing business. It makes me think of the old days of alchemy and trying to turn lead into gold. People would spend their whole lives trying to do it instead of just trying a legitimate pursuit to make money.

It's been proven there are only two ways to make money from free 1) Venture capital investments or 2) Stealing what you are giving away for free.

IMHO, trying to make money via the free model is so played out, I have no idea why people think it's cutting edge. The free model in porn has already been done and the players have staked out their claim, they did well by being first but there is nothing left for anyone trying to enter that space now.

[EddyTheDog]

I have always said that the Holy Grail of porn is to convert the huge traffic we can generate into 'mainstream' hits.....

Most of us could set up a MGP/Tube and in a week have traffic that would make most mainstream sites weep.

Is this idea from Private a way of converting that traffic? - I don't think so....

[JayDeeZee]

Originally Posted by Nathan

Milton is going to destroy Private if he continues this way. That's my opinion...

His approach of selling goods on his tube sounds interesting.. if he had any traffic of course... He's trying to sue youjizz and get the domain, most likely because of this tactic.. thing he does not get is that suing any of those tubes will take longer than Private can survive under his control.

Private is not releasing new content, they are only revamping old shit... It's sad.. I actually saw a "Best of Best of" DVD in a store recently...

I am amazed the stock can stick to $1 still. It should be far below that considering that most likely they'll get de-listed soon.

Private isn't suing youjizz. You're thinking of another site

[CaptainHowdy]

Groupon for blow and hookers...

[brassmonkey]

i smell a lawsuit.

[Paul Markham]

Originally Posted by Nathan

harvey, the only way to save Private is for Milton to leave. He has been destroying it for YEARS....

SHOCK!!!

We actually agree on something. Private used to produce the best most realistic and intense porn in the business, without going down the route of being extreme. I used to wait for the next edition of so many of their titles way back because I was guaranteed a great movie.

That was in the days of Milton senior. When Junior took it over the quality went downhill rapidly. Wasn't sure what he was trying to do but the result was crap. Plastic faked porn shot by non porn people on a massive budget. It sold on Cable well, but on Video and DVD sales plummeted.

When you produce something you don't understand, don't have an affinity for and don't understand your customer base you're sure to fail. Eventually.

Add free porn and Internet porn to the mix and you're fucked.

[Paul Markham]

Originally Posted by EddyTheDog

I have always said that the Holy Grail of porn is to convert the huge traffic we can generate into 'mainstream' hits.....

Most of us could set up a MGP/Tube and in a week have traffic that would make most mainstream sites weep.

Is this idea from Private a way of converting that traffic? - I don't think so....

If Facebook can convert people looking to chat, to buy a holiday from a link on the site. Then maybe the Internet porn business could. But to convert that to someone who wants to buy clothes that are probably premium brands, assuming it because they advertise in Italy, won't work. IMO

Once it does, paid porn is dead.

[RycEric]

Originally Posted by brassmonkey

i smell a lawsuit.

You are correct. Private's shareholders are suing them

[Nathan]

Originally Posted by JayDeeZee

Private isn't suing youjizz. You're thinking of another site

You are correct! Slutload is who I was thinking off.. my bad.

[KillerK]

Originally Posted by Nathan

Milton is going to destroy Private if he continues this way. That's my opinion...
.

Wrong

He may fuck it up, but you fucked EVERYONE here.

[harvey]

Originally Posted by EddyTheDog

I have always said that the Holy Grail of porn is to convert the huge traffic we can generate into 'mainstream' hits.....

Most of us could set up a MGP/Tube and in a week have traffic that would make most mainstream sites weep.

Is this idea from Private a way of converting that traffic? - I don't think so....

Holy Grail? It's extremely easy, the major (maybe the only) problem is many porn site owners have an inferiority complex that makes them believe mainstream is something pure that their filthy evil porn minds can't touch. Add to that they also believe porn consumers don't have a life and they live in some kind of special trans-dimensional reality where all their needs are satisfied by simply jerking to a porn video.

Believe me, I know it first hand, I was setting up a system for some pretty known adult company and then they decided not to launch it because some "filthy evil porn mind" felt insecure and mainstream partners (already set!!!!!) could decide to stop the project. I won't give names, only that that company was sold, so guess the plan didn't work out that well.

As for this Private thing, it's not that what they're trying to do is wrong "per se", just that they've a record of failures after failures in online business, and still they can't recognize their assets (which led to the initial failures). When you see they're so lost, you know they'll fail again, and Nathan hinted one of the main reasons.

Now, could they make the transition to mainstream? yes. Everybody can.
Should they? No. At least no until they have someone who knows what he/she is doing.
Will they? IMHO, they won't, they'll fail miserably

If I was in Private's management, I'd concentrate in what they always were, revamp their online business, make the brand stand as the leader it always was, rationalize human resources and overthrow competition by a smart online/offline marketing plan. Then, AND ONLY THEN, I'd try the mainstream side and only as a side business that may or may not work.

But well, the above would be using logic and common sense, and sadly Private has displayed an amazing lack of both skills last years. Results at sight.

[Buzz]

we're doomed...

That's the first thing coming to my mind when I hear porn CEO is going to sell shoes on porn tube and considers it a brilliant idea.

Dump your PRVT stocks while you can.

[harvey]

Originally Posted by Buzz

we're doomed...

That's the first thing coming to my mind when I hear porn CEO is going to sell shoes on porn tube and considers it a brilliant idea.

Dump your PRVT stocks while you can.

[_Richard_]

Originally Posted by brassmonkey

i smell a lawsuit.

same here

'“We don’t need approval for any of the luxury brands,” said Milton.'

[RycEric]

Originally Posted by _Richard_

same here

'“We don’t need approval for any of the luxury brands,” said Milton.'

[_Richard_]

Originally Posted by RycEric

am i reading that right?

[harvey]

I just want to say that after this thread and some posts I made on my site I was contacted by Private mgmt to discuss ideas. We had a nice chat and I learned they've other things in the making, which, of course, I won't tell. As I said before, I'm a huge fan of the Private brand and I really hope the new projects work as expected

[RycEric]

Originally Posted by stever

this new idea sounds great! NOT!
can i short the stock?

http://finance.yahoo.com/q?s=PRVT&ql=1

Might have been a good call actually. Approaching a new 52 week low.