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2008: The Year Of VOD?

2008: The Year Of VOD?

CHATSWORTH, Calif. – Video-on-demand continues to grow as a major force in the adult industry. Over the past year, we've seen producers moving to VOD-only business models, old-school players in the porn business joining forces with new media companies and adopting the technology to expand their bases, and consumers growing comfortable with the medium.

Recently, Colorado-based New Frontier Media launched PenthouseTV and Penthouse HD VoD after Penthouse signed an exclusive contract with New Frontier in September.

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New Frontier, which currently offers PenthouseTV to 9 million subscribers and Penthouse HD to 2 million, is now the sole organization developing Penthouse content for broadcast through American cable, satellite and IPTV operators. Beginning in February 2008, the launch of these services will be supported with consumer print advertising. "We have successfully deployed this content to a significant footprint in the United States," said New Frontier president Ken Boenish of the deal with Penthouse. "Our distribution of this content in high definition is a first for adult VoD. We expect additional Penthouse VoD launches in both standard definition and high definition television over the coming months."

In Europe, Private Media Group Inc., no doubt sensing a possible VoD explosion, acquired 4 million shares in Horse Creek Entertainment AB in December. Horse Creek Entertainment, a mainstream content aggregator, operates HomeTV, which is the third largest broadband Video-On-Demand (VOD) platform in Scandinavia.

The transactions were carried out through a share swap at an aggregate value of 1 million euros. Through this investment, Private now controls 17.2 percent of the shares outstanding. Following Horse Creek Entertainment’s two successful private offerings, the company's market value is estimated at 7 million euros.

“These two successful offerings guarantee our continued investment in top quality mainstream content, which plays a central role in our expansion of HomeTV in Scandinavia and into additional territories,” said Charles Aperia, chairman of Horse Creek Entertainment. “The stake taken by Private is part of a close collaboration which ensures that both our companies can fully exploit not only the mainstream, but also the adult market by bringing Private’s high quality content to mainstream consumers.”

"The investment in Horse Creek Entertainment is part of a wider strategic plan to increase our strength in the mainstream broadcast market and we are very excited about the future development of HomeTV,” said Berth Milton, CEO, president and chairman of Private Media Group. “Furthermore, we see a great business potential in combining Horse Creek Entertainment’s role as a mainstream content aggregator with our access to 75 percent of Europe’s fast growing IPTV market.”

Also in November, online retailer Gamelink.com partnered with Club Jenna to offer video-on-demand access to all Club Jenna-owned titles.

"We're all very excited about landing the deal with Club Jenna," said GameLink CEO Ilan. "Club Jenna features the hottest big-budget movies starring adult's biggest performers, and we're pleased to be able to offer Club Jenna movies to a huge new online audience."

Club Jenna President Jay Grdina said he is "confident in [Ilan's] business concepts for maximum utilization on the VOD platform."

"I'm certain that by working together, we will give the consumer a great product," he said.

The deal also includes movies from gonzo company Filthy Films.

At the same time, adult DVD-rental service WantedList acquired VoD-distributor XFlix in an effort to expand its presence by entering the video-on-demand market.

"As we progress into digital distribution to complement the physical-goods market, this purchase was a great opportunity for our company," said WantedList co-founder Anh Tran. "XFlix has a long history, with great people behind them. They have a strong domain, and their partnership with Media Conductor brings incredible value. The technology is extremely cutting-edge, and the video player is something that hasn't been seen in the market as of yet."

Over the past year, WantedList has tested the VOD service with its customers. Similar to the company's online DVD rental service, the new VOD service allows users to watch its entire library of over 3,500 DVD quality titles online for one monthly fee. WantedList will also be offering varying types of hybrid rental and video-on-demand plans for its existing user base.

And so it goes. The VoD surge is growing by the week, and 2008 looks like it might shape itself into year VoD comes into its own. The technology is there, so why not utilize it to its fullest?






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Mike Albo

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