INDUSTRY NEWS

Editor’s note: This is the first in a series of articles summarizing the seminars and experiences at the Internext convention, held in Las Vegas, June 27-29.INDUSTRY NEWS

Editor’s note: This is the first in a series of articles summarizing the seminars and experiences at the Internext convention, held in Las Vegas, June 27-29. This week and next week, YNOT News will be devoted to Internext coverage. We are proud to be the only webmaster news service to offer exhaustive Internext coverage…

Less exhibitors. Smaller booths. Fewer giveaways. Less foot traffic. Fewer new webmasters. Less parties. Fewer hospitality suites. Less extravagance and decadence. Less media coverage. Was the Internext convention (held in Las Vegas from June 27-29) a clear indication that the adult Internet is in decline? Au contraire: Things have never been better. The adult Internet industry is finally coming of age.

Before you jump to the conclusion that I’m either still hung over or sleep deprived, let me explain. In my opinion, this latest tradeshow clearly evidences the fact that our industry is for the first time exhibiting widespread fiscal responsibility and professionalism.

What a difference six months makes. Gone are the days of gargantuan booths, discarded after one use, with non-stop strip shows, marathon wrestling matches, and live sex acts. Internext has gone from an all-sensory spectacle to, dare I say it, an actual venue for conducting business. Sure, there have always been companies that treated the tradeshows seriously. My point is that many more companies have recently crossed the line from being free-spending, damn the bottom line, “who has the biggest bank account” contestants to responsible business people.

Companies that provide products or services to webmasters are finally taking a look at their balance sheets, as they should be. Yes, some companies have been doing this all along, but most haven’t been until recently. After all, you don’t have to closely scrutinize the bottom line when you’re making money hand over fist and your profit margin is astronomical. But with the increased competition within our industry, the heightened scrutiny by government and law enforcement, and the impact of third parties such as the credit card companies, for better or worse, we as an industry are growing up and treating this more as a business than a non-stop party.

Many companies that typically exhibited at the shows, or just began exhibiting at the convention last January, did not have a booth at this tradeshow – and some didn’t even show up. The absence of certain companies was extremely conspicuous. I am certain that some of those who did not exhibit did so because of financial difficulties.

In my opinion, however, the decline in the number of booths, the reduction in size of certain booths, and the reduction in number and size of the parties is more of a sign of fiscal responsibility than fiscal turmoil. I spoke to a few people who customarily exhibited at the tradeshows but chose not to this time. They universally indicated that they simply found that exhibiting was not cost effective for their businesses. They have chosen to ignore the temptation to “keep up with the Joneses” by having a booth despite the fact that the expense exceeded the benefits. After all, having a booth at the shows can be quite costly – you have to buy or build a booth, ship it to the convention hall, deal with the local union in getting your booth to the allocated location, get your electricity and Internet hookups, pay for the transportation and accommodations for the staff members (and in some cases “the talent”) who will man the booth, pay for whatever you’re giving away, etc. A significant amount of business must be transacted at the tradeshow just to break even, and companies are finally realizing that their marketing budget is better spent elsewhere.

Further, quite a few ex-exhibitors indicated to me that they conducted much MORE business by not having a booth. By not being “chained” to a booth, these people were free to roam the tradeshow floor and conduct business, whether at another company’s booth or in a private meeting taken off the tradeshow floor. In my opinion, the biggest deals in this industry are not done between company and webmaster (B to C), but company to company (B to B). The lack of tradeshow booths allows company representatives to spend more face-to-face time with each other, outside of parties, where significant business can be conducted.

In think this is the wave of the future. At the Internext shows, there will be less exhibitors and smaller booths. Meanwhile, the “local” webmaster gatherings, such as the one put on by Sweet Entertainment Group in Vancouver, and the gathering hosted by CCBill in Phoenix, will gain in popularity and frequency. These gatherings do not include exhibit halls with tradeshow booths, and thus, they encourage networking, relationship building and deal making that doesn’t occur as frequently when company representatives are chained to tradeshow booths. There are too many distractions in a tradeshow exhibit hall, while these smaller local gatherings more readily permit you to spend some quiet time with executives from other companies. Further, the cost to attend these webmaster gatherings is significantly less than attending Internext.

In addition, as it becomes harder and harder to make money in this business, there will be less people entering our industry. Less new blood means less foot traffic at the conventions, which diminishes the necessity for having a tradeshow booth. So I see a continuing decline in the number of exhibitors at the InterNext shows, and again, growing popularity in the local, “B to B” webmaster gatherings.

There is no question that our industry is facing obstacles and challenges that it did not have to face before. These adversities certainly have affected the cash flow of many companies. But, in my opinion, this is a good thing for our industry as a whole. The unethical, the unprofessional, and the incompetent are being weeded, bought or forced out of our industry. That’s good for us as well as the general public. Companies are compelled to become more efficient. Again, that’s good. And those companies that are already streamlined, efficient and professional will gain greater market share as time goes on.

Less booths, less foot traffic, less parties, and less giveaways does not mean that the adult Internet is going away. In my opinion, it will always be here. Our industry is simply maturing. And as we mature and become better businesspeople, the strong will survive and the weak and stagnant will fall.
Those who are disciplined and innovative will continue to be extremely successful. Granted, it won’t be as much fun as the care-free, anything goes non-stop party days, but our long-term prospects as an industry improve exponentially as we continue to evolve.

See ya at the next local webmaster gathering.