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Is HotMovies Moving Away from Affiliate Marketing?

Posted On 02 Apr 2014
By : admin

PHILADELPHIA – Adult online video-on-demand provider HotMovies has launched a new consumer-facing website offering more than one million downloadable scenes from the full-length adult films in the HotMovies catalog.

According to a spokesman, VideoClips.com contains “thousands of niche categories by the leading straight and gay studios.”

“We wanted to create a refined adult shopping platform that not only delivers the largest and highest-quality selections, but [also] provides a safe, fun and luxurious buying experience for today’s adult connoisseur,” project director Josh Z. said. “Our 10-plus years of research and industry experience have proven there is large segment of serious adult shoppers who want to buy and own content via means of direct download or cloud-saving technology from a trusted site. Underrepresented in the online market, we know the genteel adult buyer wants the convenience of a tube site without the interruptions. VideoClips.com is your answer.”

Movement away from downloads and streaming of full-length adult films in favor of by-the-scene pricing has become increasingly popular among adult websites in recent years as consumers become ever more impatient and distracted. Many consumers resent having to purchase an entire movie or a website membership in order to see the one or two scenes that interest them. Many studios that have experimented with micropayments and scene-by-scene purchases have found the experience financially rewarding.

The catch? Sites that favor by-the-scene pricing seldom offer affiliate programs — and affiliate revenues provide the lifeblood of a majority of the online adult entertainment industry.

Unlike the rest of the sites in HotMovies’ portfolio, VideoClips.com is not part of the Movie Dollars affiliate program. HotMovies spokespeople did not respond to YNOT’s questions about whether a) an unpublicized affiliate program relationship exists or b) HotMovies may make VideoClips.com promotable in the future.

An answer may lie in the company’s press release about the site’s launch, though: “By abandoning all of the marketing techniques that would give sophisticated buyers pause at competing sites….” (Emphasis added.)

HotMovies has been scaling back relationships with affiliate webmasters since 2012. In February of that year, the company pulled the plug on about 90 percent of the white-labeled VOD theaters it operated for affiliates and business partners. The company clamped down even further by instituting a new policy that the remaining white-labeled theaters would be allowed on custom domains only if the owners of the domains transferred ownership to HotMovies.

At the time, HotMovies parent company, National A-1 Advertising Inc., said the white-label shutdown was a reaction to increased credit card scrutiny of the industry as a whole, but other factors were in play, as well. In November 2011, the National A-1 had pleaded guilty to federal charges of money laundering in connection with some of its online operations. As part of the plea deal, federal authorities reserved the right to file additional charges.

In June 2012, on the hook for about $6.5 million in fines and forfeitures as a result of the guilty plea, National A-1 sold a partnership in its HotMovies division to UK-based Suncoast Productions Ltd., owner-operator of Clips4Sale.com and related properties. Suncoast provides a platform allowing amateurs and professional adult performers to market short videos and other personal items directly to fans.

In early July 2012, HotMovies Director of Business Development James Cybert called the National A-1-Suncoast deal “a very exciting move” that offered “a number of ways [HotMovies could] grow our sites in the months and years ahead.”

It is worth noting that Suncoast does not operate an affiliate program.

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