Executive Suite: Scott Coffman

When Scott Coffman founded AEBN in 1999, broadband delivery of high-quality video was still a dream, but for Coffman it was already a reality. He knew it was going to be big and he wanted to get there first.

When Scott Coffman founded AEBN in 1999, broadband delivery of high-quality video was still a dream, but for Coffman it was already a reality. He knew it was going to be big and he wanted to get there first. In the intervening years, AEBN has continued to push the envelope, and today distinguishes itself as a leading technology company that continues to break new ground, mostly due to Coffman’s relentless pursuit of new dreams to turn into realities. AVN recently spoke with the CEO of AEBN about the past, present and future.

How and why did you get into adult? If it hadn’t gone well for you, what would you be doing now instead of running an adult empire?

I got into adult because I had very little money and wanted to do something on the internet where I could make money without having to start with a lot of money. I started just selling VHS tapes online and developed a good business, but I was looking for a way to decrease my inventory carrying costs and shipping costs. That problem led me to create our pay-per-minute VOD model.

If I were not in adult, then I would be doing some type of inventions or product development. Leaning toward products that would be sold in infomercial style.

What are the biggest changes you’re seen in adult over the years, for better or worse?

The early years, everyone was recruiting people to come into the business; they would show them how to make money so they could become affiliates. I never understood the strategy of wanting more people in your industry. Companies were making easy money, and infrastructure, best business practices and cost controls were not as important as growth at any cost.

Now companies have diversified and gotten lean. The industry has matured, and now shows are more about business. The industry has always been competitive and that has not changed.

The consumer is much more informed now. Combine that with all the free content, and it’s much harder to convert users.

What are your greatest strengths as a manager of people, as a company owner and as a predictor of industry trends? Where do you need some work?

I have a very strong work ethic, and I believe that we have shown ourselves to be a very innovative company. My strength is in marketing, and I have never thought of myself as a great manager. I have learned that it’s better to hire smart people and let them make decision instead of trying to control everything about the business myself.

Do you make important decisions from your gut or through a process of analysis and due diligence, or is it a little of both?

In the past most of my decisions were made from my gut. Now the decisions go through analysis and due diligence. I still have gut feelings about direction, but now they have to be backed up with analysis.

What do you think about the Pink Visual tube site lawsuit? Will it have any appreciable impact on the industry? Do you see a general positive evolution in the tube-site model, or entrenchment by the stubborn few?

I hope they win their lawsuit. And if they win and get a very large settlement, then it will have an impact on the industry. Hopefully many other companies will sue the unlawful tube sites and it will hurt this model of distribution.

What is the future of adult content distribution? For instance, in a few years will most people access porn through a mobile-wireless tablet-like device? How will AEBN ensure that it remains at the front of the distribution pack?

I believe in the future people will access content through mobile-wireless tablets, TV and any other device that will allow them to access it. It is our job to make sure that our content can be viewed on all these devices.

What are the trends or technologies that you see grabbing the public’s attention with respect to adult content? Virtual worlds? Micro-payments so people can watch what they want, when they want? Social networking or gaming?

I think the biggest trend will be interaction. That would include virtual worlds, 3D, interactive devices. Social networking would play a role especially in the dating and hooking-up world, but the video and cam models are going to be about interaction.

How important is RealTouch to AEBN’s business model going forward? It gets a lot of mainstream attention, but will enough people buy (and use) it in the next few years for it to significantly impact AEBN’s bottom line? Or are you counting on the device to evolve into something that becomes the universally used haptic device for sexual stimulation?

It’s very important to our future because I believe interactivity is going to be important to our industry. We understand it will take time to build the market, but it allows us to enter two markets we are currently not in. The first being the toy market and the second being the cam market. We will still continue to focus on expanding and improving our VOD product.

What really excites you about the business these days? What changes in adult would you like to see?

I would like to see the adult industry come together and act as one industry with common goals. This will help in fighting the government, companies who want to extort money from us like Acacia, and companies who steal content.

This article originally appeared in the Online supplement of the April 2010 AVN.

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