HOSTING HOTLINE

This year promises to be tough for Web hosting companies seeking new clients, as falling prices and increasing competition are making hosting firms work harder to land customers.HOSTING HOTLINE

This year promises to be tough for Web hosting companies seeking new clients, as falling prices and increasing competition are making hosting firms work harder to land customers. Not only are there more adult Web hosting companies entering the market these days, but a number of firms that previously focused on hosting non-adult material have recently come to realize the value of technically-savvy adult Web hosting clients, and have thrown their hat into the ring.

For adult webmasters, the prototypical adult hosting consumer, this increase in competition is nothing but good news. An increase in companies means an increase in competition, which will ultimately result in better offers, service and value for end users. As more hosting firms enter the market, companies will need to slash their prices in order to stay competitive, which means cheaper bandwidth and hosting packages.

Even some of the fees hosting companies are forced to pay have been slashed, and will continue to be in 2002, as prices for equipment and bandwidth become cheaper than ever thanks to the telecom downturn.

Connectivity is getting cheaper, and many firms on Hosts4Porn.com now charge two dollars or less per gig, which wasn’t a common occurrence even two years ago; purchasing connectivity is much easier and cheaper today than it has even been previously. This is because as the telecommunications market sags, prices are dragged down with it; there simply isn’t the demand for capacity and equipment that there was during the so-called “dot-com gold rush.”

Buyers and brokers will even do the shopping for telecom services on your behalf, allowing you to focus on core competencies and shop discreetly, instead of having to approach major telecommunications firms to price bandwidth for an adult site. A shopping service like this was recently introduced on Hosts4Porn.

It will also be interesting to see if recent events regarding the allegedly questionable accounting practices of numerous telecoms will affect prices, or even service. Many firms that specialize in providing connectivity and networks are coming under fire from investors, analysts, the press and even regulators regarding how much capacity has actually been sold.

This could potentially force companies to slash access prices even further in an effort to make up for revenues that might have only been declared because of some “creative accounting.” Whether most of these allegations prove to be true, however, remains to be seen.

And although many webmasters are concerned about sagging conversion rates perhaps leading to the demise of free adult hosting, current market conditions seem to dictate that at least a few companies will continue to offer free services throughout 2002 (some services, like PornCity for example, have been going strong since the idea was pretty much introduced in the first place). Some of these companies might have to devise alternative revenue streams if click-through rates continue to slide, however.

While a glut of competition means cheaper fees for webmasters, there’s a chance it won’t last. If the mainstream Web hosting market is any indication, it might not take long before this competition turns to consolidation, which could lead to an increase in prices.

Many mainstream hosting firms are beginning to join forces via mergers and acquisitions in order to survive the ups and downs of the market. The mainstream hosting industry is beginning to resemble the automotive business or network television, with fewer, albeit much bigger, players. In some cases, hosting companies are only purchasing the accounts of other firms in an effort to boost their customer base quickly. In other cases, companies are purchasing both accounts and assets outright.

Fortunately for adult webmasters, it doesn’t look like this consolidation will happen to adult hosting in 2002; in fact, it may never happen. This is because many of the Internet’s top adult hosting firms are operated by smaller, private companies born out of already-successful adult Web ventures; therefore, a lot of these companies are already profitable, and don’t need to band together in order to stay alive. Let’s hope for the sake of cheap prices and good service that they don’t.