RCI's Favoritely.com Social Media Site Successful in First Phase of Beta Rollout

Rhea-AI Summary

RCI Hospitality Holdings (Nasdaq: RICK) announced successful completion of the first beta phase for Favoritely.com, a social media platform designed for adult nightclub entertainers and their fans. The platform was initially tested in five Texas clubs across the Houston-San Antonio area.

The platform enables entertainers to direct message fans, sell photos and videos, and uniquely arrange meet-ups at licensed clubs. Users must be 18+ to sign up, and the mobile-friendly site is free to join. Entertainers retain 80% of their sales and receive bonuses for referrals. Current monthly subscriptions average $4-5.

According to CEO Eric Langan, the service received positive feedback and addresses a market gap by allowing fans to follow entertainers between visits and arrange future meetings. The platform is being expanded to additional clubs and operates as a joint venture with an existing adult entertainment internet technology company.

Positive

• New revenue stream through Favoritely.com platform
• 80% revenue share model for entertainers incentivizes adoption
• Successful beta test in five locations
• Low-cost entry point with $4-5 monthly subscriptions

Negative

• initial rollout to only five locations
• Competitive market with existing fan platforms

Insights

Digital Technology Analyst

The beta launch of Favoritely.com represents a strategic move into the digital content monetization space, directly competing with established platforms like OnlyFans but with a unique differentiator - the licensed club meeting feature. The 80% revenue share model for entertainers is competitive with industry standards, while the $4-5 monthly subscription price point is deliberately set low to encourage mass adoption.

The platform's integration with physical locations addresses key safety concerns in the adult entertainment industry while creating a potential network effect: as more clubs join, the platform becomes more valuable to both entertainers and customers. The credit card payment processing capability indicates proper financial infrastructure, though this typically comes with higher processing fees in the adult industry sector.

The partnership with an existing adult entertainment technology company suggests reduced development costs and faster time-to-market, leveraging proven technology rather than building from scratch. However, the revenue impact will likely be minimal in the short term, representing less than 1% of RCI's current revenue streams until significant scale is achieved.

Business Strategy Analyst

This platform launch demonstrates RCI's evolution from a traditional venue operator to a digital-physical hybrid business model. The strategy addresses several key business challenges:

• Customer retention and engagement between venue visits
• Creation of recurring revenue streams through subscriptions
• Digital lead generation for physical locations
• Entertainer retention through additional income opportunities

The initial five-club beta test in Texas provides a controlled environment to validate the concept before wider deployment. The entertainer referral bonus structure cleverly leverages word-of-mouth marketing within the industry, potentially reducing customer acquisition costs. However, the real test will be scaling while maintaining quality control and managing potential regulatory challenges across different jurisdictions.

HOUSTON, Jan. 16, 2025 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) announced a successful first phase beta rollout of the Favoritely.com social media site for adult nightclub entertainers and their fans. The site is now being introduced to more clubs.

Favoritely.com enables entertainers to direct message their fans, sell them photos and videos, and—unique to other fan platforms—arrange to meet them in the safety of licensed clubs.

During the initial beta phase, Favoritely.com was rolled out to entertainers and fans at five clubs in the Houston-San Antonio area in Texas—Chicas Locas Houston, Club Onyx Houston, Heartbreaker's Club in Dickinson, Scarlett's Cabaret San Antonio, and Temptations Cabaret Beaumont.

"Everybody loved it," said RCI President and CEO Eric Langan. "The service worked well. We received positive feedback. Favoritely.com fills a void in the adult club industry. Fans can follow their favorite entertainers between visits and arrange to see them when and where they will be appearing next. We look forward to rolling it out to more clubs, entertainers and fans, and continuing to make it better."

The mobile friendly site is free to sign-up. Users have to be at least 18 years old. They can then follow and subscribe to as many entertainers as they like. Entertainers charge what they want. Monthly subscriptions are currently running about $4-5. All major credit cards are accepted.

The platform is also free to all professional entertainers in the adult club industry. Entertainers keep 80% of their sales and receive bonuses for signing up new entertainers.

The site is a joint venture with an existing adult entertainment internet technology company.

Media Note: High resolution logos are available here

About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (X: @RCIHHinc)

With more than 60 locations, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country's leading company in adult nightclubs and sports bars-restaurants. See all of our brands at www.rcihospitality.com.

Forward-Looking Statements

This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the company's actual results to differ materially from those indicated, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult entertainment or restaurant business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the company's businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) the impact of the COVID-19 pandemic, and (vii) numerous other factors such as laws governing the operation of adult entertainment or restaurant businesses, competition and dependence on key personnel. For more detailed discussion of such factors and certain risks and uncertainties, see RCI's annual report on Form 10-K for the year ended September 30, 2024, as well as its other filings with the U.S. Securities and Exchange Commission. The company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.

Media & Investor Contacts: Gary Fishman and Steven Anreder at 212-532-3232 or gary.fishman@anreder.com and steven.anreder@anreder.com

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SOURCE RCI Hospitality Holdings, Inc.

FAQ

What is the revenue sharing model for entertainers on RCI's Favoritely.com platform?

Entertainers on Favoritely.com keep 80% of their sales and receive additional bonuses for referring new entertainers to the platform.

How much do monthly subscriptions cost on RICK's Favoritely.com?

Monthly subscriptions on Favoritely.com currently range from $4 to $5.

Which locations were included in RICK's Favoritely.com beta test?

The beta test included five Texas clubs: Chicas Locas Houston, Club Onyx Houston, Heartbreaker's Club in Dickinson, Scarlett's Cabaret San Antonio, and Temptations Cabaret Beaumont.

What unique feature does RICK's Favoritely.com offer compared to other fan platforms?

Favoritely.com uniquely allows fans to arrange meetings with entertainers specifically within the safety of licensed clubs, a feature not available on other fan platforms.

What are the requirements to use RCI's Favoritely.com platform?

Users must be at least 18 years old to sign up, and the platform is free to join for both users and professional entertainers in the adult club industry.