A small man with blonde curly hair and glasses, and a chubby young man with a brown scruffy beard. Both were not exactly conventionally attractive.
If I were to express it, perhaps they had a vibe similar to Western otakus.
The two young men who crossed the Pacific in search of investors greeted us as they looked our way.
"Nice to meet you. I'm Tobey Strong."
"Glad to meet you, too. I'm Gerard Bacon."
Hyunjoo Noona and Ellie stood up and shook hands with them.
"Nice to meet you. I am Jessica Oh from Golden Gate."
"I am Ellie Kim. Thank you for coming all the way here."
Then Hyunjoo Noona introduced us, and the conversation naturally took place in English.
I looked at the two men. It was hard to gauge their ages as foreigners, but since they recently graduated from Stanford, both must be in their twenties.
Not only them, but most entrepreneurs are in their twenties and thirties. They may lack experience, but they confidently challenge the new industries with passion and drive.
While young people in other countries start businesses, Korean youths gather in study villages preparing for civil service exams.
This is not because the Korean youth lack a spirit of challenge, but rather the fear of failure and disgrace that comes with it.
Well, even I aimed to secure a stable job in the financial sector.
After the introductions, we took our seats. The discussion on business began.
Tobey cleared his throat nervously and took a few sips of water.
A successful company should be able to summarize the essence of its business in just one line.
For example, Face Note spans various fields like SNS services, games, advertising, messaging, and VR, but its core business can be simplified as 'connecting the world as one.'
If one cannot summarize the core essence and goes on and on, even the stakeholders would not know what to do.
Luckily, Tobey succinctly stated the core of the business.
"The goal of FaceIt is to be the Netplay in the pornography industry."
"Phew!"
Ellie coughed as if she had heard it right.
Taekgyu was also surprised. He seemed to understand the word 'pornography'. Luckily, Hyunjoo Noona showed no change in expression as if she hadn't read the proposal.
Unlike the confident twosome, I hung my head low.
Why is embarrassment always my share?
"…?"
It's probably because I'm the one who decided to invest in this company. Even if Hyunjoo Noona is fine with it, I wonder what the woman (Shuri) I met a few hours ago thinks of this situation.
Thinking so, I glanced to the side. Ellie promptly stopped coughing like a pro and focused on the conversation.
Toby began the explanation in earnest.
To understand the business of FaceIt, one must first know about Netflix.
Netflix is an American company that produces and streams videos. Initially, DVD rentals were its main business focus. Then, in 2006, they expanded into streaming services.
From then on, Netflix began to grow rapidly.
People binge-watched the movies or dramas they wanted to see and then wondered what to watch next.
So, Netflix started recommending the content consumers wanted. Initially, it was a simple method: if you liked romance, it recommended romance, if you liked comedy, it recommended comedy.
However, as the number of subscribers increased and data accumulated, the system became more sophisticated. The content consumers watched became data stored on servers, analyzing various preferences such as favorite actors, directors, and genres, and recommending other content tailored to their tastes.
Consumers were highly satisfied with this system.
Eventually, Netflix had a thought. Instead of only recommending content, why not create it themselves?
Thus, Netflix reached into original production. Using the data they had accumulated, they selected genres, actors, and directors that many consumers liked, and the content they produced became a huge hit.
Currently, Netflix has 80 million subscribers and a market capitalization of over $50 billion.
"The current size of the global pornography industry is estimated to be $15 billion in the United States and possibly several hundred billion dollars worldwide, including illegal files. In other words, pornography is a massive market."
The word 'porn' that kept coming up piqued Taekgyu's interest immensely.
"What are you talking about?"
I briefly interpreted only the essential parts for him.
Toby confidently continued his explanation.
"In the past, the porn industry led technological advancements and grew. But today's porn companies are just following past practices and falling behind in adapting to changes. Just like how Netflix dominated the OTT market with advanced digitalization, AI, and machine learning, the porn industry now needs to innovate in distribution and production."
Hyunjoo and Ellie looked impressed. They seemed unsure if it was a serious discussion or a joke.
Ellie asked me, "Is this true?"
"Well, it is true to some extent."
It's not just a joke to be brushed off.
Pornography indeed has close ties to technological advancements. Particularly, porn played a significant role in the proliferation of home videos.
Back then, VHS and Sony's Betamax competed in the videotape format market. Betamax was superior to VHS in terms of size and picture quality.
However, when Sony opposed adult content on Betamax, the porn industry flooded the market with VHS porn videos, leading to Betamax's market exit and integration with VHS.
Porn also had a significant impact with the widespread availability of high-speed internet and increased hard drive capacities.
The internet sped up for downloading porn, and hard drives increased in capacity for storing it.
It is not an overstatement to say that humans develop technology to be used in the sex industry, and they innovate in technology to be used in the sex industry.
Taekgyu, who had been quietly listening, made a comment.
"That reminds me of a famous quote from the CEO of Seagate."
Seagate is a prominent hard drive manufacturer.
Ellie asked, "What did he say?"
Toby hesitated as he heard the words "CEO of Seagate," then exclaimed, "Let's face it, We're not changing the world. We're building a product that helps people buy more crap and watch porn!"
Taek-gyu nodded in agreement. "You must have made that statement."
Roughly translated, it means 'Let's be honest, we're not changing the world. We're just making items that help people buy more useless software and watch more porn.'
It's somewhat surprising that a CEO would say such a thing directly, but it's so true. Even if you've used all the operating systems and essential software out there, it wouldn't add up to a hundred gigabytes. So why would hard drive capacity need to reach several terabytes? (Some might even find that insufficient and regularly clean up their hard drives)
Toby remarked, "Impressed by those words, we named the company 'Faceit.'"
Upon hearing the translation, Taek-gyu nodded, "Oh! I didn't realize there was such a profound meaning behind the company name."
Now, Jared stepped in. It seems Toby handles the business side while Jared is in charge of the technical aspects.
Jared explained, "On our current website, users can input their age, preferences, favorite actors, etc., and it automatically recommends recent works and links to purchase sites."
The site is currently free to use with about 800,000 subscribers. While the growth in subscribers was steep, it is now approaching a plateau. However, once people sign up, they tend to continue visiting the site. Over 10% visit daily, and over 40% revisit within a week.
This indicated that the recommendation system is working to some extent.
"We aim to recommend content tailored to consumers like Netflix does, and our primary goal is to provide streaming and download services in line with consumers' tastes."
Well, there's quite a variety of startups out there, even if they seem absurd at first glance.
Regardless of how strange it may sound, business is business.
Noona Hyun-joo asked Jared with a serious expression and a professional tone, "Will a porn recommendation service be a sufficient incentive? They plan to switch to a paid model. How many consumers do you think will pay for that service?"
Gerald responded as if he had been waiting, "As you know, most of the pornographic content is being consumed illegally. However, out of the illegally downloaded content, only a small amount is actually viewed. Most of it just takes up hard drive space because it's so difficult to find what you want to watch amidst the overwhelming amount of content available. Consumers are more afraid of wasting time-consuming useless content rather than paying for it."
Therefore, people willingly pay a monthly subscription to join Netflix. As more people subscribe, Netflix can lower content supply prices and collect more data. This becomes an incentive to attract more subscribers.
Hyunjoo asked again, "Netflix offers various content like movies, dramas, documentaries, and entertainment. But FaceIt only has one genre, porn. What do you think about that issue?"
"Porn is content that can be produced by individuals. The amount of porn produced worldwide in a day would be insufficient to watch in a lifetime. Besides, there are several genres within porn. There's a variety of content for subscribers to enjoy."
Hyunjoo and Ellie looked at me. "Is that a convincing argument? How much do people actually watch porn? Can't they just find and watch it whenever they want it?"
"Um…"
Women would be surprised if they knew how much time men waste searching for adult content. But I couldn't say it out loud at that moment.
Unlike me, Taekgyu confidently said, "What's the big deal? It's so hard to find something worth watching in the flood of adult content every day. It's an essential service."
"Are you kidding?"
"What kidding? If it works out as I said, there wouldn't be a need to fill hard drives with adult content. You could enjoy adult content on your smartphone or tablet anytime, anywhere."
Hyunjoo seemed puzzled, "People can't be watching that much…"
Taekgyu, feeling frustrated, said, "What do you know about adult content?"
"…"
Hyunjoo couldn't put up a counterargument. It's because she actually doesn't know anything about adult content.
It's the first time seeing Hyunjoo in such a flustered state. She probably never imagined the day would come when she'd be ignored for not knowing by her younger brother.
Not even concerned that there are women present, Gerard confidently stated, "Adult content that everyone can enjoy anytime, anywhere! That's the future that FaceIt envisions."
Alright, enough of that, Western Otakus!
TL/n -
As you guys are saying that the pace of the story is slow so I've decided to update a chapter for every review.
***
As of the second quarter of 2024, Netflix has around 277.65 million paid subscribers worldwide. As of September 2024, Netflix has a market capitalization of approximately $180 billion.
***
Betamax vs VHS
The battle between these two formats in the late 1970s and 1980s is often referred to as the "videotape format war."
Betamax, developed by Sony, indeed had superior picture quality and a more compact size compared to VHS (Video Home System), developed by JVC. However, several factors contributed to VHS eventually dominating the market:
Recording Time: VHS tapes could record for longer periods (initially two hours, later extended to four and six hours), which was more appealing to consumers who wanted to record entire movies or TV shows.
Cost and Compatibility: VHS machines were generally cheaper and more compatible with other brands, making them more accessible to a broader audience.
Marketing and Licensing: JVC's strategy of licensing VHS technology to other manufacturers allowed for a wider range of VHS products, which helped increase its market penetration.
Content Availability: As mentioned, the availability of adult content on VHS played a significant role. The adult film industry adopted VHS, which helped drive its popularity.
Sony's decision to restrict adult content on Betamax did indeed contribute to its decline, but it was the combination of these factors that ultimately led to VHS becoming the dominant format.
***
Bill Watkins, the former CEO of Seagate, once made a rather candid remark during a corporate dinner. He said:
"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn."