How does the song go: “better to burn out than to fade away?” Well, I wish it were quite that simple in the adult Internet business. One day an operator will be standing next to you doing business, and the next they’re not returning email or answering calls – but are they gone, or just on vacation in Italy? I wish I knew.How does the song go: “better to burn out than to fade away?” Well, I wish it were quite that simple in the adult Internet business. One day an operator will be standing next to you doing business, and the next they’re not returning email or answering calls – but are they gone, or just on vacation in Italy? I wish I knew.

With so many affiliate programs, webmaster free sites, and resource sites opening and closing daily, the balance of power is in a constant state of flux. But it’s not a tidal-surge type of flux, it’s more like the baby splashing around in the bathwater. It doesn’t really change all that much anymore, but the faces change. New ones come and go. The ones who’ve been around the longest increase their value proportionally by proving their robustness. CyberErotica, MaxCash, CEN, etc. come to mind.

Some have said that consolidation will happen in 2001-2002 — including me. But I’m not sure that my prediction of consolidation in the industry has been wholly understood. I mean consolidation in the sense that mid-to-large sized companies will merge, partner, and ally with each other to maximize their value offerings. Where does that leave the little guy?

If you have a paysite with 200 members and were hoping to cash out this year, you might be surprised at how rough the waters really are nowadays. The truth is that you’re only as valuable as what you can bring to the table. A small paysite with a few members, for example, is for the most part a quantifiable property. It’s worth a little bit of cash, probably not enough to retire for more than a few months, but hey, a little cash spends as well as a lot of cash (just for a shorter amount of time – heh!) Value in yourself, your company, or your properties is generated by the long-term prospects of continued revenue generation, company growth, or (on the web) key technology which provides its owner with some advantage that trumps the normal, “I see your hand and raise you $5” type business transaction.

Judd (YNOT News Editor) used an interesting word when he was describing the big/little guy spread. He called the little guys ‘indies.’ And he asked me, will the mega-sites reach down and scoop them up? Makes me think of the major record labels who, traditionally, operate exactly in that manner. Via talent scouts, they identify the talent and make them an offer to get them on-board. Works a lot like that in online adult too, except we’re all scouting all of the time, and we all scout each other for opportunities. And they certainly do exist! By no means am I critical of this practice. But the difference here is that an “Indy” talent really has to have something worthwhile to get a promotion. Not just a great idea, but something tangible…something unquestionably good, i.e. traffic. A common quote regarding the flailing mainstream Internet is, “They don’t want fancy graphics or marketing slogans anymore; they want performance and results.”

That about sums it up. Will there be consolidation? Yes, there will continue to be consolidation. Who will consolidate, and why? Companies who want to maximize value. How will the “Indies” be involved? They’ll bring something valuable to the table… something quantifiable… that brings performance and results. It’s kick-in-the-ass time in this industry. Either get motivated or get booted! It’s an exciting industry of opportunities for the hard-working Indy with his eye on what the big guys really want.