National A-1, which owns the behemoth video-on-demand service HotMovies.com, is considered by many to be a pioneer of the pay-per-minute micro-billing model. Siebert said pay-per-minute has been central to the company’s success, giving customers the ability to pay for content “as they go.”
“For three years, HotMovies has offered its customers this purchase option,” Siebert said. “It lets them watch what they want, when they want, for only 10 cents a minute. It also gives customers the privacy and discretion they want.”
Siebert said micro-billing options like pay-per-minute have enabled his company to tap into market segments that had previously been either overlooked or ignored by the adult industry.
“Millions of potential customers who will never, ever purchase an adult DVD due to privacy and discretion concerns can now watch adult content online because micro-billing lets this untapped market get in and get out quickly and privately,” he said.
In addition to its ease of use, Siebert said pay-per-minute also works because it hones content down to exactly what the individual customer is looking for.
“Most adult men do not want to watch an entire DVD,” Seibert said. “Over the years, though, they've purchased millions of DVDs because that was their only choice. Now they are discovering that there is an easier and less expensive way to watch adult content.”
Although official membership numbers were not disclosed, Siebert said HotMovies already serves customers “in the millions.” As the technology grows, he predicts micro-billing will eventually take over the DVD market.
“DVD sales and rentals will become a thing of the past,” he said.
Siebert’s prediction, though plausible, likely isn’t in the immediate future, however. With roughly half of the country still without Internet access, VOD services have a lot of catching up to do before they outnumber the DVD market.
“It is true that the micro-billing model for adult content is in its early stages,” Siebert said. “But look, even if only there are only 65 million broadband users in the country, I just need everyone of those who loves porn to give me a dollar. When you look at micro-billing in that way it is really a beautiful thing.”