It’s no secret that adult entertainment on the Internet has given rise to some pretty impressive fortunes. While a good number of them have arisen from content that is decidedly hardcore and involves real people in its production, not every adult success story was built around flesh, blood, and bone. As anyone who enjoys good sex will attest, the mind is the body’s most powerful erogenous zone. Sometimes it’s the fantasy, not the reality, that’s most erotic.

Although a human fascination with voyeurism will never disappear, more and more companies and individuals are discovering that abandoning the basic trappings of reality in favor of flights of fancy can be a profitable undertaking. Here, three companies that have constructed their own rest stops along the yellow brick road reveal the secrets of their success.

Exclusive Content

Exclusive Content Inc. (www.exclusivecontent.com), founded in early 1999, eschews real sex for the artistic world of cartoons. Specializing primarily in Japanese erotica, the company grew out of founder Bestat’s nagging dissatisfaction with what she perceived as an online realm in which there were few choices for niche connoisseurs.

When Bestat started in the adult Internet industry in 1998, her goal was to make a little extra income outside of her regular day job. Initially, she developed a few free sites by following tried-and-true formulas: images of beautiful, naked women posing suggestively or engaging in various indulgent acts. She says it didn’t take her long to discover the work didn’t appeal to her.

“I liked the money, but I didn’t like working with the content,” Bestat says. “Being female, looking at naked females all day just didn’t do it for me. Besides, everything looked pretty much the same: different girl; same position.”

Bestat says she’s always enjoyed comics, and she thinks that’s why ToonErotica.com caught her eye as she surfed the Web to see what else was out there in the adult sphere. At the time, ToonErotica.com was an oddity: one of a handful of places surfers and Webmasters could find cartoon content with an erotic twist. Bestat struck up an acquaintance with Amber, the Website’s owner. Sometime during their conversations, Bestat began to realize that by combining one of her own interests – the Japanese comics art form known as anime – with her desire to make money from the rapidly growing population of surfers looking for adult content that was out of the ordinary, she could trade drudgery for something in which she took a personal interest.

“I enjoy anime quite a bit myself, and I suspected an adult market existed,” she says. “The problem was, there just wasn’t any content available in late ’98. Good anime, in particular, wasn’t available at all in the U.S., but there was some being traded in the newsgroups.”

Bestat embarked on a mission, trolling newsgroups to find artists who had or would create high quality adult toon content that could be hers exclusively. Her first “finds” were American art. By January 1999, when she attended the adult Webmaster convention Internext (www.internext-expo.com) for the first time, she had 75 images that were available nowhere else.

“Both ARS (adult.adrevservice.com) and MaxCash (www.maxcash.com) were planning toon sites in January ’99,” Bestat says. “The first company I approached was ARS, and they bought all 75 of the original images. It was my first big licensing deal.”

From there things just got better, says Bestat, who unabashedly admits her first two years as a content provider were “extremely profitable.” They were also extremely busy. “In the beginning, I spent eight to ten hours a day finding artists,” she says. “I also spent a lot of time going to shows to educate people about the niche. Wherever there were Webmasters gathering, I was there.

The investment paid off. Last year, anime sales reached an astonishing $80 billion globally, much of it in North America and Western Europe. Bestat got her fair share: Today, she makes what she calls “a respectable living” off what started as a spare-time endeavor. She spends about 10 hours a week rounding up new talent, and finds much of it in the unsolicited email she receives from artists seeking work. Although she admits she may hire only one out of every 50 artists who contact her, she can’t help viewing the volume of email she receives as validation that Exclusive is doing something right.

More than that, Bestat revels in the change she’s seen in the industry. Almost every sponsor program incorporates an anime or toon site now, Bestat says, and Exclusive Content supplies many of them with their content from the more than 6,000 proprietary images in its collection. The assortment spans the spectrum from softcore anime to black-and-white manga (a sort of illustrated novel), hardcore hentai, and the rare and desirable erotic bishojo. The company has diversified into gay toons, adult comics, and adult Flash comics, as well as mainstream anime games, movies, T-shirts, and erotic art.

“We also own pay sites and affiliate programs [www.exclusivemediagroup.com] that are doing well, but our main business is licensing content,” Bestat says. “Quite a bit of competition has come and gone, but we’re still doing extremely well.”

That’s not to say Exclusive’s rise to the ranks of the elite hasn’t been challenging. The biggest hurdles have been financial ones. “Our imagery doesn’t come cheaply,” Bestat says. “You’ve got a lot to prove when economics insist that you charge $1.50 or $2 an image in a market that’s accustomed to paying less than 50 cents per image for real sex.” Fortunately, “Ours is still a relatively small niche in the grand scheme of things, but it consists of a dedicated bunch of surfers. Retention with our content is as good as conversion – and that counts in a big way.”

Bestat attributes Exclusive’s longevity not only to the quality of the material itself, but also to her own love of the genre. She knows what she likes, and as luck would have it, thousands of surfers’ tastes mirror her own. Her best advice to newbies is, “You need to know the terms of your niche and the specific wants of your surfers. You have to know your market, and market your wares correctly.” Part of that, for her, is offering only hand-drawn content that is created specifically for Exclusive by more than two dozen artists all over the world. To ensure none of the artwork becomes “over exposed” or trite, each set is released as a limited edition that is retired after relatively few are in circulation.

“Surfers appreciate the art form, not necessarily the sex,” Bestat says candidly, adding that treating her content like fine art makes it all the more desirable among connoisseurs. “Surfers who’ve always been into comics can combine that with their interest in sex and satisfy two desires.”

Artistic toon content also gives surfers some “wiggle room” when it comes to admitting – even to themselves – why they’re surfing porn in the first place. That can be an especially important consideration for the distaff fan.

“Erotic comics are an awful lot like romance novels,” Bestat says, noting that the fantastical elements of her content may be its most compelling to women. “Erotic vampires are hugely popular with women.” The fact that much of toon sex is toned down from the ultra-hardcore material that so often attracts men doesn’t hurt its marketability, either – nor does the notion that depictions of sex involving fairies and aliens “is not really porn.”

“People can always say they look at it for the artistic value,” Bestat opines, “and, in fact, it is very artistic and beautiful.”

V1rtual Desires

Loki is an old-timer in the porn biz: He’s been building adult Websites since 1996. He’s also a self-described virtual reality addict. In the late 1990s, he was among the first to do some serious tinkering with Micrsoft’s MSAgent technology, eventually earning some pretty impressive cash by creating animated “screenmates” for mainstream clients. “I was hooked on VR from the start,” he says. “I looked into various types of software and… I wanted to take it to the next level.”

In 2001, he found a way, and it all started almost innocuously.

“I was hired to build an amateur [adult] site for some locals here in town,” Loki says. “One of the guys, Jake, wanted me to try and make some Dungeons & Dragons porn, so I fired up my 3D software and made some girls and put them on the site.”

The VR girls were a hit, but they didn’t last long in their first venue.

“3Dmike, who’s now my partner, was hired as a consultant [by the client company], and when he saw the D&D girls, he demanded that I pull them from the site and make a standalone site for them. That’s the day V1rtual Desires was born. Mike and I talked for hours about the current market. I knew that the toon end was picking up more and more, and it was just a matter of time before this type of content would hit the mainstream big.”

Loki and 3DMike left the company at which they met, and together with Lyno and Tart formed something that quickly got bigger than the four of them. V1rtual Desires (www.v1rtualdesires.com) is a “one-stop, 3D company that does it all, from creating the [realistic, anime, and hentai] content to marketing the actual products to making sites,” Loki says. “There are endless possibilities between the market and our products, like custom virtual models, for example. We have a sponsor program, and we also make plug-in feeds for other companies.”

Loki has trouble expressing exactly how profitable the venture is. He doesn’t want to reveal any exact figures, but when he says “IT SELLS!” one can hear the capital letters. “With just a small – and I do mean small – handful of affiliates, we’re seeing TGP traffic converting at 1:450.”

Particularly enticing, he notes, is the 3D anime content. “In honesty, we could never compete with the real counterparts [when it comes to virtual models],” he says. “If you want teens, you’re not going to settle for cartoon teens. However, with the anime, no one has done what we do – until now. We took the traditional anime content and gave it our 3D twist, so now you have realistic anime content.”

Much like Bestat, Loki feels that the draw of his niche – for the consumer, anyway – is the fantasy aspect. “We all watched cartoons as kids, and most of us in our adult years still sneak off and watch cartoons from time to time. A lot of the stuff nowadays is so close to real that people just have to see it to check ‘is it live or is it Memorex.’ The toon market may not be ‘real porn,’ but with some of our content the only reason you know it’s fake is because we tell you.” To underscore his point, he directs the curious to one of V1rtual Desires’ newest “real-type” models: Kimberly, who can be found at www.vdc-loki.com/new. She’s looks as if she’s ready to jump off the screen and copulate on the desktop.

For content producers and Webmasters, Loki sees a different kind of draw: “I and others in this field are predicting a huge jump [in virtual content] due to the current [18 USC §]2257 legislation. At this time we are not regulated [i.e., required to keep records proving the majority of all models], and I feel more people will start looking to the virtual market until ‘the initial heat’ has died down a bit. Actually, as a joke I have started to make my ‘girls’ hold ID cards. This week, in a staff meeting via IRC, one of my partners said, ‘I’m fucked if the feds ever show up. I’ve got five models here less than five days old!’”

On a more serious note, Loki admits there are “plenty of things we cannot do. Toons cannot show children. Our legal department shuns us for releasing any torture-style content or extreme content. As a general rule, adult cartoons should follow the same guidelines as their real-life counterparts, and we adhere to that like iron. For example, I wanted to do a set of a priest and a demon, but our legal team said no. They also said no to Jesus getting blown on a cross, yet they okayed a set where I had a nun masturbate with a cross.”

Even with the self-imposed prohibitions, “there are still many things we can do,” Loki notes. “We have less paperwork, less overhead, and our models can do almost anything the customer wants – even as far as putting the customer right into the scene with his favorite model. I see this market, if done correctly, being a more personal porn experience for the client. Our biggest seller right now is member requests, where we let the viewer direct his own series. You tell us what you want, and we will create it for you. Real porn can do that, too, but at too high a cost.”

That virtual porn is a big hit is not surprising to Loki. “This is by no means a new thing. [Computer-generated imagery] shows and movies have been around since the late ‘80s,” he says. “Last year Disney took steps to revamp its entire animation staff, and now has gone so far as to say they will no longer do animated films. They will only do CGI movies. Right now there are four CGI shows on network television and cable throughout the week. There was also a full-length porn movie made in the early ‘90s called 2 Funky 4 U, which sucked horrible ass – bad animation, bad script, bad editing, bad, bad, bad.”

Bad virtual porn is one of the things Loki says V1rtual Desires wants to abolish. The company is producing its own full-length porn movie that he says will “spank” the first one. It’s also shopping custom virtual models to some of the biggest names in the porn industry, though Loki declines to name them. What he will say is that the performers “can have a virtual version of themselves that can walk, talk, and perform sexually just like they do, but without the limitations of actual human performers.” He thinks that, when it takes off, will be really big.

There are other plans for the near future, too. “I see the VR porn market evolving with more interactive-type situations,” Loki says. “We have had talks with various sex toy companies about integrating our models into their toys so the user can actually have sex with the girl on his monitor: When he moves, she moves, etc. And this year we will be taking on the SMS world of cell phone content. There are a few companies that have been hounding us to provide them with content for cell phones for the past few months, so during our last meeting we gave the green light for that project to start in September.”

Although Loki admits his company has “weathered many a storm” during its three-year existence, he feels the positives of his niche far outweigh the negatives. He and his partners are doing something about which they are passionate, the money’s good, and their work has been nominated for several awards. Far from wanting to keep the field to himself, he says he welcomes competition. “If you have a keen eye for detail and are handy at the current crop of software available to the VR market, by all means give it a shot,” he says. “This industry is growing by the day. Look at the current companies on the market to get a feel for what is selling and what is not. Try to fill holes in the current market with your content, and promote, promote, promote. The days of getting rich overnight are history. We’ve been at this three years now, and we’re still not ‘rich.’

“In all honesty, today one makes more money by promoting a company than by starting a company,” he adds. “Nowadays it take a lot of time, money, and dedication to succeed in [the adult] industry. Read the message boards, soak up as much knowledge as you can, find a consultant, and have a unique product to offer your customers, and you will succeed. There is a definite strength in numbers, and you can make just about anything happen.”

High Joy Products

High Joy Products LLC (www.highjoy.com) takes a different approach to virtual sex. Real people are involved, but the company’s business model plays to the fantasy aspect nonetheless. With the goal of “increasing the level of interaction in the online world,” High Joy provides consumers with a mechanism and a milieu to facilitate long-distance sexual relationships. By partnering with adult toys company Doc Johnson (www.docjohnson.com), High Joy has developed a line of interactive toys for men and women that can be operated across vast distances because they’re Internet-enabled. To complement the gear, the company operates a “dating” portal for consenting adults that features video, audio chat, and toy control in addition to the more common profile browsing and discrete contact.

“There’s a big potential there [for attracting new business],” says High Joy President Amir Vatan, noting that although others have tried and failed in the Internet-enabled toys space, his company thinks it’s finally gotten the formula right. In beta tests, consumers flocked to the concept for a number of reasons, Vatan says. For one thing, online sex “is as safe as it gets.” For another, even though participants can have multiple sexual partners in one night, they don’t have to give up their virginity – at least technically. Probably the biggest draw, though, is that users can satisfy the fantasy of having sex with strangers without worrying about real-world repercussions.

“It breaks down a lot of barriers,” Vatan says.

High Joy considers itself a “sophisticated technology development company.” Although the consumer end of High Joy’s business is relatively new, the company is doing well at attracting high-profile Internet-based partners. Vivid.com already has inked a deal to High Joy-enable some of its Web properties, and “we’re in discussions with a number of other potential partners, including Net-based and broadcast radio stations,” Vatan says. A Webmaster affiliate program will be unveiled during the fourth quarter of this year. Ultimately, Vatan says, he hopes to “standardize Internet-enabled technology for all of the adult arena [when it comes to long-distance sex toy-enabled interaction]. We want to be the ‘Intel Inside’ of adult novelties.”

Lest anyone get the erroneous impression that High Joy emerged from the ether virtually overnight, Vatan is quick to point out that his company’s commercial presence is new, but its concept and development are not. “Ever since the Net started, everybody’s been looking for increased interaction,” he says. “We think we have the right formula for adult, because consumers are already familiar with the quality of Doc Johnson’s products. We’ve just added a new twist to something consumers already enjoy.”

The High Joy software technology that powers Doc Johnson’s physical products was five years in development, mostly to ensure the product would overcome consumer disappointment with previous attempts to do a similar thing. “If you want to do it right and you’re working with a concept that everybody has tried and failed at, in order to do it correctly and satisfy the entire world, you have to take your time, make sure it works as advertised, and will honestly fill the void,” Vatan says. “We think we’ve done that. From what we’ve seen so far, this type of ‘extra layer’ in the dating process will increase existing revenues for all areas of adult.”