Making Social Networks Work

Making Social Networks Work
By Jett Lynn

from xbiz:
The advent of social networks can be a pain in the financial ass, but there are ways for marketers to use them to their advantage.

MySpace’s audience grew 24 percent between September 2006 and September 2007, according to Nielsen Online. The top contender in the online social-networking niche now enjoys 58.6 million unique visitors monthly.

As impressive as 24 percent growth may be, it doesn’t come close to the 252 percent experienced during the same period by relative newcomer Buzznet or the 183 percent gained by Club Penguin, both of which nearly broke the 4-million-unique-visitors monthly mark in September.

The upward trend in social network popularity shows no signs of slowing. Even AOL, which hasn’t managed to do much right since the early days of the web, maintains some pretty impressive numbers for its Hometown and People Connection networks.

With its reputation for pushing the technology envelope and exploiting social phenomena, it’s no surprise the adult industry latched onto the social-networking movement as quickly as it could. By the fall of 2007, there were several well-known websites attempting to do for porn what YouTube and MySpace did for (or depending on one’s viewpoint, to) the mainstream. Predictably, the sites became almost overnight sensations, with the most popular, YouPorn, growing its reported 15-million-member audience at a rate of 37.5 percent monthly and outranking CNN, About and on Alexa, according to the November issue of Portfolio magazine. On Nov. 1, YouPorn’s rank was 45.

Sadly, the owners of YouPorn are notoriously reclusive and did not return XBIZ’s requests for comment. Perhaps there’s a good reason the owners of sites like YouPorn don’t do a lot of talking to reporters. Attorney Robert Apgood thinks he knows what it is: Social-networking sites of all kinds face mounting criticism and legal action not only from copyright holders whose property is under attack, but also from consumers who’ve experienced identity theft and privacy invasion in which social networks have played a role.

Copyright infringement on sites like YouTube and MySpace is legendary. It is equally problematic for their adult brethren. Although most have learned to respond to Digital Millennium Copyright Act notices and promptly remove offending content, none yet has found a way to discourage users from posting it in the first place. Worse, “fair use” has become an incredibly nebulous phrase in the digital age, when any piece of copyrighted material may be incorporated in whole or in part into another work simply by employing a few quick keystrokes.

“Lawsuits may force the courts to define clear meets and bounds,” Apgood said, “[Fair use] is kind of a moving target right now, but I think [a court-rendered definition] is an inevitability.”

Although identity theft and privacy invasion may not receive as much press as copyright infringement, they actually may be bigger issues, Apgood said. Federal and state laws prohibit identity theft, but typically they are employed only in financial situations. Potentially of more concern to most social-networking site users, however, may be the kind that amounts to little more than a charade: one person knowing enough about another to impersonate him or her online, sometimes with truly awful consequences. In a milieu in which content of all kinds takes on a life of its own as it’s linked to, shared, quoted and repurposed almost endlessly (not to mention cached by well-intentioned search engines and stored by commercial data repositories), even unintentionally incorrect information and regrettable private photos can haunt job applicants, political aspirants, spouses, community leaders, credit seekers and others seemingly forever.

When someone intentionally assumes the identity of another, posts injurious material in that person’s name, and then sits back to watch what happens, the results can be much like the digital equivalent of arson.

“[Social-networking sites] allow anybody to sign up and pretend to be anyone else,” Apgood said, partially because in general terms the less social-networking site owners know about their users, the better.

Malicious impersonation opens the poster to a lawsuit if the injured party can determine the poster’s identity, Apgood said, “but the site owner also could be liable. They’re safer if they do absolutely nothing about content unless they receive a DMCA notice.”

In either case, site owners are on the firmest legal ground if they make no money from their efforts. Apgood pointed out that Google no longer posts advertising on its image-search-results pages, partially as a result of copyright-infringement lawsuits filed against the search giant by Perfect 10 Publisher Norman Zada. The suits were unsuccessful in forcing Google to stop indexing copyrighted images on the web, but the company no longer derives revenue directly from that effort. That, Apgood said, should be a wake-up call for adult social-networking sites, the majority of which support themselves at least in part by selling advertising on their pages. There is a successful legal firestorm lurking in that business model, Apgood said, because the sites essentially are deriving income from stolen content even if they remove it immediately upon request.

Legal headaches aside, social-networking sites can be a boon for marketers who know how to use them. People who see social networking and user-submitted-content sites as nothing more than thieves’ paradises “are clueless,” according to Oprano owner and self-described “consultant at large” Jim “GonZo” McAnally. McAnally, who counts PornoTube and Xpeeps parent company AEBN among his clients, said adult social-networking sites provide a wealth of opportunities to upsell free-content consumers. In the case of PornoTube and Xpeeps, “we created the traffic others were unwilling to sell us, so the true value lies in the upsell to [AEBN’s video-on-demand] theaters,” he said. “VOD is a dependable, recurring revenue stream.

“It pays to look at [posting content to social-networking sites] like the free samples they give out in the mall: If your product is good, people eventually will buy,” he said. “It’s the cost of doing business, but in a different way.”

The PornoTube model is one way of generating revenue from what otherwise could be a money pit: direct users to your own revenue-generating content by teasing them with free snippets. XTube Director of Sales and Marketing Lance Cassidy said there are other ways to earn a living in the social-networking wilds. XTube is Toronto-based Webnovas Technologies Inc.’s only product, so the developers had to come up with some creative ways to make money.

“It was a struggle [to survive and grow] in the beginning, because the website was completely free,” Cassidy said of the product launched in mid-March 2006. However, at press time XTube was operating well in the black with a staff of 13 people and plans to expand to 20 or more by year’s end. Cassidy said XTube has 3.58 million registered members and receives more than 4 million unique visitors daily. That’s not too bad for a site that bought 5,000 clicks at launch and hasn’t spent a dime on direct marketing since.

From the very beginning it sold advertising space, but over time that stream became little more than a drop in the bucket. Within the past year the company has joined a number of affiliate programs from which it makes a decent income. It also added its own branded-merchandise store, and that adds a few more shekels to the coffers. Cassidy said two soon-to-be-released sections of XTube — XTube TV and live, interactive video chat — are expected to be moneymakers as well.

According to Cassidy, the lion’s share of XTube’s income comes from its VOD theaters, where users can pay to watch movies by the minute or the day. However, that income source rapidly is being overtaken by another: selling members’ amateur content and splitting the revenues with the creators.

“VOD movies earn more right now because there are more of them,” Cassidy said. “Amateur videos compose a tiny fraction of the number of VODs — about 1,500 amateur videos to 8,000 VODs — so there’s more revenue from VOD currently. But apples to apples, amateur completely blows away VOD.”

Cassidy also said members of XTube are using the site to promote their own content.

“We enable anyone who is a legal producer or owner of content to use XTube to promote their own products,” he said, adding that many studios and paysite owners post teasers with links back to their revenue generators. There’s a catch for affiliates, though: “The affiliate’s sponsor must approve [of posting copyrighted content on XTube],” he said. Some affiliate programs, like SilverCash, allow their affiliates to post promotional content with embedded affiliate codes. Others, like Traffic Cash Gold, do not.

Of course, user-submitted sites are not the only social networks that can be exploited by smart marketers. In fact, AdultWhosWho — a sort of combination MySpace and LinkedIn for adult — has proven popular and profitable for its developer and its users, according to founder Derek Meklir.

“We have more than 4,000 registered users from the adult industry, with another 6,000 or so constantly perusing the site every month,” Meklir said. “The extremely important aspect of those numbers is that they’re all business professionals in the adult industry.”

Although it’s not a direct revenue generator for its members, AdultWhosWho affects their bottom lines by saving them time: It allows them to connect with one another in a variety of ways, setup meetings at future events, disseminate information about their businesses, and finalize deals, Meklir said.

“AdultWhosWho enables people not only to meet new people in the industry, but also to market themselves to the whole industry. Through blogs on the site and [AdultWhosWho-sponsored] private and public events at shows, anyone can market their company to the whole industry.

“The site also enables people to decide on which shows they are going to attend during the year by seeing who else is going to those shows. After the shows are over, it also allows people to reconnect to associates they met at a show so they can proceed with finalizing deals.”

He cited an example: “At the recent show in Florida, I had a lady come up to me and tell me she had set up 22 meetings for that weekend directly through AdultWhosWho. I have also had people who weren’t able to attend shows for a while tell me the only reason people still remember they’re in the industry is because AdultWhosWho kept them alive.”

In the final analysis, Meklir said he’s a believer in the power of social networking — despite its drawbacks — for a very simple reason: “Social-networking community sites allow a person to connect with like-minded individuals from around the world for work or pleasure, and that would be impossible otherwise.”