Mon, Mar 25, 2002 page19

• Broadband in Britain getting a lift from porn

  Development of video-on-demand services is being helped by porn, which commands higher rates compared to regular movies

  • THE GUARDIAN
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  When the British government laid out its vision of "broadband Britain," it was unlikely to have been counting on pornography as the crucial ingredient to turn the dream into reality.

  But given past experience of what it takes to get consumers to buy new technologies, it might have known this would be the killer application to justify the billions of pounds it has accumulated so far in television license fees. Broadband technology, it seems, is paving the way for an explosion of porn on British TV.

  Playboy Enterprises, for one, is a firm supporter of broadband, and has been busily preparing for action by the end of the year.

  Driving its enthusiasm is the discovery that buy rates double when consumers have access to porn on broadband video-on-demand (VOD) services. This gives them the convenience of being able to access at any time a huge variety of adult TV material instantly and anonymously.

  Playboy gleaned this information in trials with North American cable companies, including Cox Communications, which have built VOD technology, backed by huge computer file servers, into their broadband networks. Trialists are able to bypass embarrassing conversations at their local video store. The convenience of accessing a pool of porn and other content with a click or two on their remote controls is creating an impulse purchase dream.

  "Adult entertainment is generally viewed as an impulse purchase and it's frequently abandoned if a program is halfway through," says Jeremy Yates, the deputy managing director of Playboy TV in the UK.

  VOD systems store vast archives of material and, for a price, viewers with broadband lines can download any program at any time.

  Broadband lines provide enough network capacity to facilitate a two-way relationship between each subscriber and the digital program archives on their networks. This creates the imperative of immediacy which has so far evaded those pay TV networks attempting to sell goods and services from retailers and banks through interactive TV.

  For Playboy and other companies that sell adult entertainment, VOD and 3G mobile phones are a dream come true. Playboy has already parcelled up packages of programming to suit consumers' individual tastes in each region of the world, based on experience from selling porn on pay-per-view services. British consumers like girl/boy next door porn, unlike Americans, who prefer soft glamour. Continental Europeans usually opt for "first time" sex, according to Playboy, while Asians apparently like a whole raft of material from what Playboy's checklist describes as "naughty" fetishistic to "unattainable models."

  The attractions of VOD to network operators are many: storage capacity on the powerful computer servers that drive VOD systems means that network operators can offer far bigger choice than has been available on either pay TV or in hotel pay-per-view systems; they can charge more for porn than for other paid-for programs in the UK -- US$7.10 compared with around US$4.26 for a non-porn film; and Playboy says it will keep less than 50 percent of the income while Hollywood studios normally take around 80 percent.

  Some believe broadband porn won't be significant in Britain as long as censorship laws make it one of the tamest markets in the world for porn content. Demand in other countries where laws are considerably more relaxed, such as Germany, France and Sweden, is much higher, says Andy Birchall, head of On Demand Group, which manages a pay-per-view service for cable companies NTL and Telewest.

  Others argue wryly that the market for porn -- at least the soft variety -- is minimized by the amount of sex on mainstream TV in Britain. "The content we supply to the UK is different," says Yates. "Sales would rocket if porn laws were loosened in the UK."

  Interestingly, the UK-based independent television commission's most recent survey on attitudes to porn shows a dramatic drop in concern about the availability of sex on TV. Britain is, ironically, the most competitive market for pay TV porn in the world with around 20 adult channel brands, including Playboy TV's Spice and The Adult Channel, Northern & Shell's TVX, BSkyB's 18+, and Red Hot's Private Girls and Private Blue.

  Yates believes these services will seem inaccessible once broadband VOD services kick off. "Sky is doing a good job with 18+, but until you've actually seen video-on-demand, seeing something that starts programs every 10 minutes maybe seems nearly as good."

  Companies that have already set up VOD services in Britain have complained about the prohibitively high charges British Telecom (BT) imposes for use of its broadband infrastructure. Video Networks, for one, which markets its service under the Homechoice brand, buckled under the weight of subsidising each of its subscribers to the tune of US$710 last year and stopped marketing its service. But recently BT's rates have dropped to the point where it is possible to run a viable business, says Yates.

  Although broadband mobile services, where phones come equipped with bigger LCD displays, are further off than fixed cable services, the salient pioneer in the field, NTT DoCoMo in Japan, has accumulated useful data. Of the 25 percent of the Japanese population that subscribes to its iMode mobile internet service, half pay to see content on their mobile phones. Most of it is porn-related video clips and games.

  Takeshi Natsuno, the managing director of iMode strategy at NTT DoCoMo says, "iMode is successful because of the content and because we charge content providers only a 9 percent commission to carry it."

  To be successful, European mobile companies must change their policy of charging content providers around 90 percent commission.

  Other mobile operators, which have paid large sums for licences for 3G mobile phones, are following DoCoMo's example and are turning to porn among other material to recoup their investments. Hutchison has already signed a deal with Playboy and Virgin Mobile is also in talks with the company.

  It seems there is a price to pay for the British government's broadband dream and the US$31.24 billion it pocketed from auctioning 3G licences: The prospect of an explosion in pornography on TV.
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