XBIZ RESEARCH

REPORT
HOW WILL VIRTUAL REALITY
IMPACT ADULT ENTERTAINMENT?
RESEARCH

Winter 2016

RESEARCH

Winter 2016

HOW WILL VIRTUAL REALITY

IMPACT ADULT ENTERTAINMENT?

xcitement has been building in the the past few years

for a magical technology that could change the way
consumers view and embrace adult entertainment.
That technology is virtual reality.
Advancements such as low latency and smarter graphics, coupled with the corresponding growth in interest from major players such as Google, Facebook and Samsung, mean that VR is
now poised to finally take off.
In 2016, the roll out of new VR headsets and related apps are

expected to fuel interest in the immersive experience.

Juniper Research recently revealed that wearable VR headset
shipments will approach 30 million units globally by 2020 from
a projected 3 million in 2016. Another research firm, Piper Jaffray, meanwhile, pegged that VR will exceed $1 billion in revenue by 2020.
Over the course of the past year, adult industry social network
XBIZ.net polled executives and stakeholders to gauge their positions on VR platform and whether they believe it will impact
business.
XBIZ Research posed three questions:
n Will virtual reality headsets like the Oculus Rift revolutionize adult entertainment?
n What will drive VR headset adoption among consumers?
n What will be the biggest segment of virtual reality adult
entertainment?
As the leading authority in adult industry news and market
research, XBIZ is pleased to offer this report. We hope and expect this report will provide insight into what is expected to be
a watershed year for VR. a
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WINTER 2016

XBIZ SURVEY
METHODOLOGY
BIZ Research polls are
conducted online over a
two-month period. All voters were members of XBIZ.net,
the adult industrys leading online
social network.
XBIZ.net membership includes
more than 10,000 active and qualified industry members. Qualification for membership includes
disclosure of company/organization affiliation and type of business or service provided.
Members include operators of
leading adult websites, traffic
vendors and ad networks, content
producers and licensers, distributors and wholesalers, models and
performers, retailers, payment
processors, software and IT
providers, mobile-solution
providers, industry media and associations, providers of legal,
marketing and consulting services and providers of other industry-related products and
services.
Members casted their votes
through XBIZ.net, and no member could vote more than once in
any poll. Votes were tallied
anonymously; no member could
determine how another voted.
Real-time poll results were made
available on XBIZ.com and
XBIZ.net. a

XBIZ RESEARCH

WILL VIRTUAL REALITY

HEADSETS LIKE THE
OCULUS RIFT REVOLUTIONIZE
ADULT ENTERTAINMENT?
YES ... 53%
NO 47%

WHAT WILL DRIVE VR HEADSET

ADOPTION AMONG CONSUMERS?
ADULT ENTERTAINMENT ... 38%
VIDEO GAMES ... 53%
HOLLYWOOD MOVIES ... 4%
GAMBLING/GAMING ... 5%

WHAT WILL BE THE BIGGEST

SEGMENT OF VIRTUAL REALITY
ADULT ENTERTAINMENT?
LIVE CAMS ... 43%
3D-RENDERED VIRTUAL WORLDS ... 29%
RECORDED VIDEO CONTENT ... 28%

Juniper Research calls 2016 the watershed year for VR, noting
that recent findings reveal that wearable VR head-mounted display
headset shipments will approach 30 million globally by 2020.

W I N T E R 2 01 6

TAKING A LOOK AT
VIRTUAL REALITY
HIGH POINTS
ne of 2015s hottest topics for operators in the adult
entertainment industry was the imminent release of
virtual reality technology to the consumer market,
and how such a technological innovation could or would impact the industrys long-stagnant revenues.
While much was made about the efforts of early adopters
armed with the Oculus Rift Development Kit, the real-world
applications of VR content can leave much to be desired
with nausea and vertigo inducing video that often provides
only a partial sensation of immersion through 180-degree
coverage of the action, hampering the user experience.
The lack of high-quality headset integrated audio that
would provide spatial cues has also limited the impact of initial offers, but these limitations may be expected from such a
complex technology that is still in its early infancy functional limitations that are actively being overcome.

STUDIOS SHOOTING VR CONTENT

A number of adult companies have already entered the

fray, including Utherverse, the pioneering adult virtual community that operates Red Light Center and recently launched
HoloFilm Productions; BaDoink, which offers free smartphone-compatible cardboard goggles with all U.S. memberships; and VRTube.xxx, which offers VRLive cam shows in
addition to pre-recorded fare, along with Dominic Ford,
Huccio, Kink, Marc Dorcel, Naughty America.
Websites such as MetaverseXXX.com, ViRP.io,
VirtualRealPorn.com and VRSexperience.com also started
showcasing this new form of content.
Other VR highlights from 2015 include the integration of VR
with haptic devices and teledildonics, plus live cams, bringing
sex toys into the digital age or perhaps that should now be
the virtual age.
Leading the pack is Kiiroo, with its Fleshlight-fitted
Onyx male masturbator, which integrates with Red Light
Centers VR realm as well as Flirt4Frees advanced live cam
platform.
An example of the latter occurred when popular star Lisa
Ann performed a live cam show for Flirt4Free, using her Kiiroo Pearl vibrator to remotely control the viewers Onyx
including those equipped with Fleshlights custom
molded Lisa Ann sleeve, for a truly immersive experience.
Other players include Lovense, with its remote-synced
Max and Nora devices, targeting male and female users
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CONTINUED FROM PAGE 3

FANS OF ADULT
ENTERTAINMENT
WEIGH IN ON VR
AVAILABILITY
survey of adult entertainment fans on the subject of
virtual reality reveals that the availability of adult
movies would influence more than 60 percent of
them to adopt the new technology.
The survey, conducted by Vivid Entertainment among
readers of consumer site XCritic.com, indicated that VR
is still in its infancy among fans of adult movies, with just
10.3 percent of respondents saying they currently own a
headset.
Of those who have headsets, the most popular brands
are Oculus Rift, Google Glass and Playstation VR.
Among those planning to buy a headset, 30.5 percent
said they plan to get a Playstation VR while 13.4 percent
lean toward the Microsoft Holo Lens.
Asked how much the availability of VR adult content
will influence whether they get a VR headset, 44.1 percent said it will have some influence while 18.3 percent
said its the main reason Id get one.
Availability of adult entertainment, however, would
have no influence among 18.3 percent of the respondents
and 19.4 percent said they have no plans to get a VR
headset.
Among respondents who plan to consume VR, 34 percent said they are definitely planning to purchase adult
entertainment content, while 46.8 percent said they are
not sure they will buy the content and 19.1 percent said
they definitely will not buy it. Movies with a story line
would be preferable among 41.3 percent of the respondents.
Among those planning to buy VR adult entertainment,
58.2 percent said they would be willing to pay $20 for an
adult VR movie, 24.2 percent said they would pay $30,
4.4 percent would pay $24, while 3.3 percent would pay
$50 and 9.9 percent would pay as much as $60. a

Vivid Entertainment and XCritic.com teamed to deliver

a survey to find out how adult entertainment fans are
responding to virtual reality platforms.

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XBIZ RESEARCH

WINTER 2016

respectively, with app-enabled video chat and Skype compatibility.

Add in a dose of VR, and the future of remote sexual stimulation,
especially via live cams, becomes even more intriguing.
The industry seems to agree with a 2015 poll conducted by
XBIZ revealing that 42 percent of industry professionals believe
that live cams will dominate VR, while 29 percent believe that 3Drendered virtual worlds such as Red Light Center, will be the
largest segment, with 28 percent
opining that recorded video content will make up the lions
share of the VR market.
From harlots to housewives,
many are concerned about the
impact on relationships and real
world sex caused by advancements in the masturbatory sciences, with one example
coming from legal Nevadabased brothel Sheris Ranch,
which was closely monitoring
the 2016 Consumer Electronics
Show (CES) in Las Vegas, not
only to gauge the threat to its
business model, but to seek opportunities for expanding it as
technology unfolds.
But offering VR is one thing,
having a market willing to purchase it is another. The first hurdle that must be overcome is
putting VR devices into the
hands of consumers.

The adult
entertainment
industry is
placing high
hopes on the
future of VR,
but at this
point, it is still
a technology
whose time is
yet to come.

CONSUMER CHOICES

Oculus finally nailed down

the price for the Oculus Rift virtual reality headset in early January
2016.
The Rift headset will be priced at $599, and also will include a
sensor, Oculus remote, cables and Xbox One Controller.
The VR headset works with a PC with at least 8GB of RAM, an
Nvidia GTX 970-equivalent graphics card and an Intel i5 processor to power the Rift.
But there are other choices, too. For example, a visit to BestBuy.com revealed that the big-box retailer offers a selection of VR
devices, including the Samsung Gear VR for the companys
Galaxy Note5, S6, S6 edge and S6 edge+ smartphones, at a price
of $99.99 perhaps the most polished of current devices.
BestBuy also offers the 360fly FlyView Mobile VR Viewer for
$39.99. This headset is compatible with select Apple and Android
smartphones and utilizes Google Cardboard version 2.0 technology, with dual adjustable lenses, and is designed for use with
footage from the $399.99 360fly camera. Another offer is the Agptek Universal Virtual Reality 3D Video Glasses, which are compatible with 4- to 7-inch smartphones and also use Google
Cardboard technology. At a current price of $21.49 (a two-thirds
drop from its regular price of $65.99), one must infer that lackluster sales have contributed to its deeply discounted pricing.

XBIZ RESEARCH

W I N T E R 2 01 6

The $599 Oculus Rift comes with a remote along with an Xbox One controller to guide VR experiences.
Currently out of stock and now backordered, the $120 Zeiss VR
One is compatible with the Samsung Galaxy S5 and S6 smartphones, as well as Apples iPhone 6 and 6s, and appears to be a
popular product that is banking on its sleek design and the quality
of its optics as a competitive advantage.
Perhaps most intriguing (and a throwback to the earliest days of
consumer 3D media viewing), is the sub-$30 Mattel View-Master,
which many may recall for its image discs that provided realistic
depth to the selected images. This newest generation of ViewMaster (suitable for users seven years old and up) also provides interactive mini-games, and is compatible with Apples iPhone 5 and
up with iOS 8 or later, as well as select Android smartphones from
HTC, LG, Motorola, Nexus and Samsung, opening the door to VR
for even the youngest of users training tomorrows viewers to
expect VR content as normal.
Conspicuously absent from Best Buys lineup is Oculus Rift and
the Sony Morpheus, further illustrating the immaturity of the marketplace as we enter 2016. Best Buy is not the only source for the
latest technology, with a quick trip to Amazon.com revealing
dozens of other choices most of which are similar inexpensive
variations on the Google Cardboard-compatible theme.

HIGH HOPES ON FUTURE OF VR

The adult entertainment industry is placing high hopes on the future of VR, but at this point, it is still a technology whose time is
yet to come.
With many observers opining that 2016 will be the year of VR
and the expected widespread availability of the highly anticipated
Oculus Rift and other new devices set to fuel this growth, the future looks bright and can only improve from here.
With rumors of new VR productions underway, its only a matter of time before the mainstream is ignited by a frenzy of media
attention and tantalizing new options, and whether its in 2016 or
not until 2020, its a sure bet that VR is coming to a headset near
you (in a big way). a

Many observers say that 2016 will be the year virtual reality
becomes a sought-after technology among consumers.
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XBIZ RESEARCH VIEWPOINTS

HOW WILL VIRTUAL REALITY IMPACT

THE ADULT ENTERTAINMENT BUSINESS?
TODD GLIDER, BADOINK

Right now adult entertainment is the

killer VR app. There's no debating
that. Every genius at Google, every
Facebook executive knows it. That said,
in the short term, its effect on adult entertainment as a whole will be minimal.
Is it an exciting technology that could
disrupt how we produce and consume
live and recorded motion picture content? Absolutely. The potential is there.
The will is there. The investment is
TODD GLIDER
there. The patent filings are relentless.
But the segment is comparatively infinitesimal.
Ask me, "What will adult entertainment do for VR?" I can
answer that. But the inverse? It's all speculation. For one
thing, the hardware has a ways to go. Magic Leap may be developing contact lenses with VR boosters and that is huge
but here, now, and for the foreseeable future our job is to
enthusiastically indoctrinate the masses ... with marketing
muscle and lots of Google Cardboard.

STEVEN GROOBY, GROOBY PRODUCTIONS

The growth in VR scenes and live virtual cams we've seen in the last few
months are barely scratching the surface.
The potential and opportunities are
immeasurable at this point, but I can
see a time when watching 2D non-VR
adult films would become mostly extinct
in favor for the immersive experience.
When the consumer can create a custom avatar and interact through the VR
STEVEN GROOBY
headset and auxiliary devices with
other consumers in a virtual world of
their choice, then not only are we
changing the adult industry but we will change the world and
people's place within it.

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WINTER 2016

COLIN ROWNTREE, WASTELAND

Recorded content presents far fewer

challenges as folks starting to produce
that Wasteland.com and Sssh.com
among them have a controlled studio
environment with just one set of cameras to film the 360-degree footage.
The considerable workload with this
is the sheer volume of data and storage
needs in the editing process, but I'm
looking forward to the next generation
of 360 cams coming out soon that the
footage is shot on a single camera, versus 16 GoPros cobbled together on a
rubber rig which, sadly, is the current
way of doing it.

ELA DARLING, VRTUBE.XXX

COLIN ROWNTREE

I think virtual reality will impact the

way we produce content in a way similar to that of the advent of the TV. I
think people realize fairly quickly once
they dive into VR that the approaches
they've taken to shooting in the past
don't work the same in VR.
This new medium has such a lush,
rich experience to offer users that we
must take advantage of the increased
immersion and intimacy users can exELA DARLING
perience in the virtual world.
I for one am placing my bets on my
company's live VR webcam platform,
VRTube Live, which transports the user to the performer's actual bedroom with them.

XBIZ RESEARCH

TOON TIMMERMANS, KIIROO

Virtual reality is going to dramatically change the adult entertainment industry by creating a huge demand for
new content and products.
Adult entertainment producers will
benefit for the revenue generated from
the release of new VR content. Toy and
tech companies will continue to innovate and create new products that are
compatible with VR and improve user
experience, such as Kiiroo which adds
TOON IIMMERMANS
the element of touch.
This will all be beneficial for customers who will have the opportunity to
buy new products which will continue to get cheaper and easier to use, all while exploring their wildest fantasies in the
realest and more immersive context.

GREG PICCIONELLI, PICCIONELLI & SARNO

Every now and then the entertainment business is disrupted by a new

technological development. The invention and mass adoption of radio, TV,
the VCR, the iPod, the Internet and the
iPhone were all examples of tremendously disruptive forces that redefined
the meaning of entertainment.
Virtual reality, I think, is poised to be
the next major entertainment business
disruptor.
GREG PICCIONELLI
And like previous eras of disruptive
media innovation, VR will likely provide
a large number of foreseeable and surprising opportunities across a broad spectrum of entertainment.

FABIAN GREY, ALICEX

I think VR will have a big impact on the entertainment landscape, since it is a completely new medium, that allows a
much more immersive feeling for the consumer. I would even
compare it to the advance of photos to film.
The perception of a consumer/viewer that watches a movie
instead of looking at photos is on such a qualitative different

W I N T E R 2 01 6

level, that it is a huge step in terms of the emotions and of immersion, that a consumer can feel. The same goes for VR.
Especially once the screens get more crisp (8K, 12K, 16K)
and the processing power of the devices that enable VR get
higher. Then content that will be created, can mimic the real
world so closely, that it might become almost indistinguishable from reality, that we truly might be entering a reality that
resembles part of the Matrix. But this is probably another
10-20 years away.

PETER ACWORTH, KINK.COM

VR will become a necessary format
to shoot recorded content in.
The VR format lends itself to POVstyle shooting, and VR POV will become a much more prevalent form of
erotic entertainment.

ADAM GRAYSON,
EVIL ANGEL

PETER ACWORTH

I think the inevitability is [3D-rendered virtual worlds] since that's the

literal meaning of virtual reality. The
other ones and frankly, most of what
is being billed as VR now is really
just augmented or enhanced reality.
But I get it VR is a buzzword so
everyone wants to capitalize, he said.
ADAM GRAYSON

ALEC HELMY, XBIZ

The question isnt, will virtual

reality revolutionize adult entertainment. The question is when.
Regardless of its impact in the
coming years, it is safe to say that adult
will once again drive tech adoption
among consumers.

ALEC HELMY

WINTER 2016

XBIZ RESEARCH

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NOTES

ABOUT XBIZ
THE INDUSTRY SOURCE

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XBIZ RESEARCH

XBIZ is the adult industry's leading publisher of business news and information, providing up-to-the-minute coverage of the industry at XBIZ.com
and in three trade publications XBIZ World for the digital media market,
XBIZ Premiere for the retail market and XBIZ Sensuals for the intimate
products market. In addition, XBIZ hosts five annual trade events including
the adult industrys biggest night, the XBIZ Awards. XBIZ is frequently cited
in the media for coverage of the industry and has been published in CNN,
Fox News, Newsweek, MSNBC, Forbes, The Wall Street Journal, Wired,
CNET, ABC, USA Today and Los Angeles Times among others.

WINTER 2016

Members of the media

seeking additional
data, attributable
quotations and expert
referrals are invited to
contact XBIZ by calling
(310) 820-0228, or
via email at
research@xbiz.com.