Back in January, during those first few weeks of stumbling around as managing editor of AVN Online, it dawned on me that perhaps the August issue would best be devoted to the industry as a whole rather than a specialty theme like digital convergence, billing solutions, or the legal landscape. While those are all important topics that we've either covered or will cover this year, the August edition is the de facto magazine at summer Internext- so why not give the adult Internet industry some poolside reading material packed with what it really cares about? Itself.
Where it's been. Where it is. Where it's going.
How it got here. How it feels. How it'll survive.
In these turbulent times it seemed only fitting to capture a snapshot of the adult Internet in flux.
And better yet, why not let the industry do it in its own words?
So we did.
Now, we know there are some who will suggest it's the very essence of conceit for an observer of any industry to tell that industry about itself, but who knows more about the heart and soul of an enterprise than those who are actually in the trenches? They are the ones with their fingers on the pulse of where that industry has been, where it's going, and what challenges lie ahead. They are the ones through whose hands pass the fumbles and innovations by which an industry clings to life or succumbs to wretched death. Their eyes see the minute details that make up the big picture.
So why not let the industry talk about itself; tell its own sordid tale in its own uncensored words?
The task was harder than it looks. The entire staff - but Kathee Brewer in particular - put out a Herculean effort to bring this feature to fruition. We sent out questionnaires to more than 100 of the industry's best and brightest. We received a wide range of opinions from almost 50 movers and shakers. Adult entrepreneurs large and small; grizzled old veterans; brash, young upstarts; straight, gay, bondage-oriented and everything in between- they all have something to say.
Their answers range from the hopeful to the positively bleak; from the global to the intensely personal. Some applaud their brethren as fellow soldiers in the battle for individual liberties, and they encourage the more meek to embrace solidarity. Others decry the immaturity and vainglorious displays they say are the industry's worst enemy. While most are outspoken about their involvement with adult entertainment, a few remain in the closet. Here are fond remembrances of the past, and tentative speculations about what's just beyond the horizon. Here are egos, hearts, and minds. Here is a brief history of an industry still in its infancy, yet wise beyond its years.
There's a peculiar pleasure to eavesdropping on a conversation about a topic that's near and dear to your heart; it's a lot like voyeurism. In that regard, we hope you get an earful.
- TL
That Was Then...
Arthur Chang:
I am a huge fan of pornography. I entered the business because I needed a job and thought that it would be fun to work in porn. I realized pretty quickly that there [was] tons of money to be made in this business.
Rainey Stricklin:
This industry offers a lot of creative freedom and innovation, too. Though I've worked for mainstream companies, the adult industry has offered me the salary, growth opportunities, and creativity that I need to be satisfied.
Jack Shamama:
I'm surprised how readily the public adapted to new technologies we've presented them with. With the data I was presented with, I was skeptical that DRM technology would take off as fast as it did. I'm confident that adult will be leading the way on similar technologies and that more mainstream media outlets will be following what we do very closely.
Kathleen Morford:
The edges between mainstream and adult have blurred so greatly. There's a definite crossover, and it seems like every large mainstream site has their hand in it. We're not a small community of perverts anymore; we're a big city filled with smart and talented pros.
Tom Barrington:
On the Net, it all happens so fast, who can keep up with new innovations? Besides, as traffic is king on the Net and new innovations sometimes take a long time to grow to a perpetual state, being too close to the leading edge of cutting technology can sometimes not be a good thing when users are not used to it, browsers don't support it, and sometimes search engines ignore it.
Fred Valiquette:
That's what I like about the porn industry, though: It's constantly changing. What is true now can be totally the opposite in six months.
Tera Lord Masters:
There are so many layers to this industry; it's like an intricate web. I have learned so much and there is still so much out there to learn. You can always get into different areas and switch up what you do, so it never gets boring.
Colin Rowntree:
In the early days, it was very much a "Wild West" show. No one really knew what they were doing and a certain camaraderie existed between webmasters, helping each other along. The industry has gotten much more competitive, at times cutthroat. This has transformed our "good old boys" club into pretty much what every other bus-iness owner faces to stay in business: extreme competition. The money is still there, but a lot of the fun has gone out of it.
Rainey Stricklin:
Back in the early days, you had to work pretty hard not to make money off of anything adult. We were technologically ahead of mainstream companies, governments, and consumers. There was less competition, less government involvement, and less awareness. Today, your average porn consumer has more knowledge about what's out there, what they should pay, and how to get out of a charge on their card. The government inches closer and closer to the edge of free speech/obscenity and pays much more attention to what we do. I would say the industry is still a crazy business where a lot of money is being made, but the freedom will
decrease the longer we're around.
John Desjardins:
I think adult webmasters work much harder and make less money then they did five years ago. It costs a lot more money to run a successful program now because of the constant need to update with fresh, original content as well as higher affiliate payouts and hosted galleries. The playing field is much different now, and the odds can be heavily stacked against the webmaster, but if you work hard and find your niche, you can be very
successful in this business.
Harlan Yaffe:
I agree. An adult webmaster at one time was anyone who could slap up some pictures, sign up with an AVS, and wait for the check to come. It grew out of a hobby and grew into a business. An adult webmaster today is more than someone who has basic HTML skills. They have to be a businessperson with a solid game plan on financial, legal, and product fronts and maintain a focus on quality, talent, content, and the market. We're selling widgets: Our widget is an X-rated one, and selling it isn't as easy as it used to be.
Greg Moss:
Yeah, but this last decade has been riddled with economic uncertainty, and the porn industry has still sustained all pitfalls. When looking for employment or starting a new business, you always want to consider the financial health of the industry. If it were 30 years ago it would have been alternative energy sources; 20 years ago electronics and telecommunications. Today it's banking, biomedical technology, pharmaceuticals, and porn.
Jake Cruise:
I'm first and foremost a businessman.
I don't just run a website. I have a total of six full-time employees and a quickly growing business. I have to decide on marketing, finding actors, new sites to develop, running servers, etc. Oh, and I'm also the tech support guy for my business!
(Yes, I'm a nerd.)
Joe Holm:
Just five or six years ago one could set up a very simple links directory stuffed with ads and links to your favorite sponsor, get a Yahoo listing for $200, sit back, and make $15,000 a month guaranteed. That's how I started. The world has changed since then, and today's adult webmasters have to be a lot more educated. It takes much more hard work to be successful. The number of sites and sponsors has grown beyond all predictions, and surfers are more educated and very careful where they spend their money. On the upside, there are new marketing tools, virtually unlimited
free content to build a site, and last but not least, community boards where help is at your fingertips.
Kathleen Morford:
It's like the 49ers in the California Gold Rush. In the early days, lone miners could get lucky and find a rich vein of gold. But after a while the easy gold was gone, and the big mining companies were the only ones with the resources to find the gold. The pioneer days of the adult Internet are gone. Our companies arrived early and had the smarts not just to find gold right from the start, but to build a big-time mining operation.
Amelia G.:
Exploring the commercial potential of cutting edge media has always been risky, but it can also be extremely rewarding for the pioneers.
Punker Barbie:
You know, it's kind of sad, but the industry will never return to the days of mid-to-late 1990s. Those days are long gone, but the Internet has evolved and so have the websites. The good old times of just buying a dot-com URL and selling it to the highest bidder are over. With competition always comes lower prices, and the ease of just owning one website and making millions isn't there anymore.
Todd spaits:
No, not on the World Wide Web anyway. I think the Internet really came out of left field businesswise, and those halcyon days were due mostly to timing. The Internet will never be new again, but electronic adult entertainment will have many other explosions as technologies converge and innovation continues.
Dave Levine:
It probably will never be the case that such a high percentage of companies make money with ease. But there will always be opportunities where some adult companies are able to grow and profit by finding new niches or developing new technologies or by opening new markets.
Fred Lane:
The single most exciting innovation that I've seen during my time studying the online adult industry is the development and refinement of streaming video. More than any other single invention, streaming video has cracked the mold of media delivery. Although the connection is not necessarily direct, I believe that the concept of streaming video – the content I want, when I want it – helped lay the foundation for a wide variety of other innovations, from TiVo to the downloading of individual music tracks.
Richard Excoffier:
When we started in '98, video was the size of a thumb. Now you get full-screen, DVD quality on every site.
Joe Holm:
That wouldn't have been possible without broadband. Broadband Internet was one of the milestones for the adult Internet. It was by far the most needed and useful innovation, putting us in the position of delivering media-rich websites to our customers, giving them more value for their buck with entirely new products like live chats, streaming video, and full movie downloads.
Harlan Yaffe:
That's true. Broadband and the ability to bring real-time video have enabled computers to go from a place to see pictures to a full-scale buffet of erotic entertainment. While the migration of consumers from "free TV" to today where some type of pay cable or satellite dish service is now the norm rather then the exception, I think the online exodus to some sort of high-speed access becoming the norm will be much faster and take place in one decade as opposed to television's migration over several. The next step, where the computer and the TV become an integrated technology – home control, communication portal, and entertainment gateway for both the family hour and adult entertainment – is a revolution just around the corner.
Eric J. White:
The adult industry has always been quick to adopt new technologies. In the early days of the Internet, it was easy to keep up with the technology, but today, I find myself left far behind in some of the discussions on the boards where the webmasters discuss new tracking and analysis techniques. I keep thinking these were the same guys that didn't want to pay attention in math class.
Amelia G.:
Over the course of my tenure in adult, I would still have to say the most valuable innovation has been third-party billing for online membership sites. I started out as a magazine publisher many moons ago, and people who started online may not realize just how much easier companies like CCBill and Epoch have made everything.
Colin Rowntree:
Well, this will certainly date me (10 years in now). The most exciting innovation (and profitable one) was certainly the ability to do recurring billing. Prior to 1997, all sales were one-time purchases, and it took a great deal of work to build a large membership. The advent of recurring billing caused revenues to skyrocket.
Unfortunately, the unscrupulous actions of a few webmasters a few years later "poisoned the well" with Amex, Visa, and MasterCard—a legacy we live with to this day.
Chandie Foster:
You know, that brings up a good point. I entered the industry with a lot of naiveté about what the porn industry was all about. I assumed (incorrectly, I might add) that it would be filled with creepy, poorly dressed, potbellied men riding to fortune on the backs of under-appreciated porn stars. What I came to find is that I am instead, particularly in the Internet arena, surrounded by articulate, creative visionaries and some of the biggest personalities I've ever had the pleasure of knowing. The speed at which ideas are born and then brought to fruition is remarkably fast, and new trends shape our industry literally on a daily basis. It keeps things exciting and interesting and affords us opportunity after opportunity to create successful businesses.
Jack Shamama:
I agree. Porn has appealed to me for a long time, but it took me awhile to realize—or maybe to admit to myself. It appeals to me because I enjoy it; any preconceived notions I might have had about people in this industry being shifty or sleazy have proved, for the most part, to be false.
Derek Meklir:
To me, at first it seemed like an "adult webmaster" was a person making porn, making tons of dough, and doing very little to make that happen. Now I understand it to be some seriously hard-working and smart people who do lots of work and make good amounts of money. The amazing thing to me is how everyone in the industry is really looking to learn more and keep on top of trends.
Greg Moss:
You need innovation to have continued growth in any market segment, and the porn business has no lack of innovation.
John Desjardins:
I think in 10 years the adult industry will be very different, though. Affiliate programs could even be a thing of the past.
Dravyk:
In five years, the online adult industry will be much like the adult publication industry of the '80s when there were Playboy, Penthouse, and Hustler dominating, and nearly everyone else had a scrap here, a scrap there. The adult Internet will likewise be overwhelmed by a dozen top companies, and whatever else is out there will be crumbs and ancillary support companies. The industry is going to implode. Instead of 100 webmaster boards, there will be a handful, because there won't be very many free-site webmas-ters or affiliates out there like there are today.
Mark Kernes:
Without trying to be precise as to the time period involved, I foresee two possibilities for the future: Either the mass of fans of adult material, who number in the millions, will stand up and be counted and take political action to oppose the censors in our society … or else we're looking at a nationwide (and possibly worldwide) suppression of adult material such as we cannot even imagine, driving the industry underground.[This would lay] the foundation for a civil war between the "sex-positives" and the religio-conservatives, where everyone will be forced to pick a side. I'm guessing just in time for the presidential election of 2012.
Punker Barbie:
The industry will continue to grow and thrive as long as there are horny guys out there, and I don't see that going away any time soon.
Andy Alvarez:
In 10 years the adult industry is sure to develop into something none of us can truly envision! Since it's such a volatile business environment, anything can happen at any time … but one thing we can count on for certain, the industry will never die.
Dick Hunter:
The Net has only been part of most people's lives for a decade or less. If we were talking about television, then we'd still be watching live broadcasts on small back and white sets. With new technologies comes an endless number of new implementations, most of which I'm sure have yet to be thought of.
Not that long ago, Shawn Fanning took two technologies that had been around for a long time – file sharing and search/indexing – and turned them into Napster. We all know how big a deal that was, and what a profound effect it has had on things, reaching far beyond the Internet. It was actually a really simple idea, and I'm sure I wasn't the only one thinking, "Gee, I wish I had thought of that!"
This is Now...
Amelia G.:
Get me in the right extroverted mood, and I will rattle off URLs in the supermarket during casual conversation. I don't do anything I would be ashamed of.
Eric J. White:
I always use my real name, and I'm never ashamed to talk about what I do. But I have to tell you, I have never received a negative attitude from someone, which I find amazing. Most of the time, what I receive is mild amusement, and then you see the gears spinning in the men's minds.
Kathleen Morford:
When I first started, I told my family that I was working for an Internet billing company. That seems to be the standard line for those who don't want to be judged. Not completely false, mind you, but I omitted the part about that company's Japanese pay-site network. Personally, I wanted to wait and see if it was a strategic career move or just a stopgap between mainstream jobs. After a few months, I knew that it was the industry I wanted to stay in, and I told my parents. They were more shocked at me working in adult than when I came out as a lesbian! Still, I'm really proud of the work that I do.
Larry Walters:
To do this job effectively, you cannot sugarcoat your positions or hide what you do. You must believe in free speech so strongly that people won't dare confront you on it. You need to be able to look judges, jurors, and prosecutors in the eye and be astounded that they would ever consider approving any form of government censorship. You can't do that if you're living a lie with your friends or family.
Asher Hardt:
There is a bunch of people in this industry with a whole bunch of mixed personalities. Some are looking out for each other, and others are looking out for only themselves. You need to pick and choose your friends in this industry, very wisely, but when you find the good people, you won't find any better anywhere else.
Dravyk:
The A-No. 1 problem and weakness of the adult online industry is the inability for any kind of unification: no trade union, no association, no one voice, no lobbyists, no PAC contributions to get elected who we want, nothing. We can't even fight our own battles. They have been fought by others: COPA via the ACLU, 2257 via the FSC, Acacia by a dozen companies.
We cannot work together, and if we actually wanted to, then we could not agree. It's not for lack of trying by some folks, but overall there is either a complete apathy towards creating anything unifying or a disdain by many individual companies who want to guard their own back and say, "Screw everyone else."
Chandie Foster:
Although I understand the need for competitive advantage, shared information and resources are essential to the survival of our industry. Board personalities, competitors, and even so-called "friends" often relish the downfall of successful companies in our business. One day we'll sing the praises of a company, and the next we'll revel in its dismantling. How often have I seen board posts that amount to nothing but spam in the wake of a company's problems? I believe we need to look at why these businesses end up in dire straits and learn instead of laugh when they go.
Todd spaits:
The public displays of juvenile behavior are this industry's biggest downfall. I am all for boards, and I believe they serve a vital role in an online business environment where face-to-face communication is difficult if not impossible. However, I can't help but think how the lawyers and CEOs of organizations such as Acacia and the DOJ must revel in our sometimes childish outbursts.
Fred Lane:
For too long, adult webmasters have acted like the fundamental rules of the universe (the U.S. criminal and tax codes, Murphy's Law, the Heisenberg Uncertainty principle, even gravity) do not apply to the Web, but of course they do. And by acting in an immature and sometimes illegal manner, adult webmasters give aid, comfort, and motivation to people who want to do harm to the First Amendment. Nobody should be forced into being a crusader for free speech, but if one's entire business plan is predicated on the fact that the First Amendment exists, then more care should be taken to support and uphold it. To a large extent, that means conducting business in a way that does not cause people to question the wisdom of having free speech.
Rainey Stricklin:
I think the adult industry as a whole has an ethics problem. As a fledging industry, there aren't many guidelines for us to use that are applicable, so we've just been making it up as we go along, without many standards. The industry also attracts such a diverse group of people from all over the world, I think it would be very hard to set standards and business practices that everyone would agree on. Despite regulations, governmental or otherwise, there are people who will do whatever they can to make a buck, will take their business matters to open forums, and will rip people off.
Joe Holm:
It's the results of our industry's own actions (or lack thereof) that constitute the biggest problems we are facing today. Visa didn't come up with its tight regulations just for the fun of it, and the same applies to U.S. and international government regulations like the latest 2257 or the universal ban of dialers in Germany. Although it may be tempting, we need to be more careful not to get carried away with the endless opportunities the Internet presents us with. Just because spam is a cheap and more-or-less effective way to reach customers doesn't mean it is right, just like auto-dialers and other bad practices that were just too common in the past weren't right. If we all ran our industry with more professionalism, implemented more effective strategies for fair business, and blocked minors from accessing adult content once and for all, the authorities would have very little reason to even notice us.
Eric J. White:
Am I the only one bothered by the glacial pace people seem to have about change? People get tunnel vision about what they do. Take the disconnect between the adult "movie/magazine industry" and the adult "online industry," for example. It constantly amazes me. They are two very distinct groups that still view things quite differently, especially licensing. The online industry should count its lucky marbles that the offline industry is not motivated strongly to get into the online world. If the online people think the value of their content is too low now, they should see what would happen when the movie industry dumps its catalog on the Web!
Sam Sugar:
The adult industry needs to avoid falling into the same traps as the mainstream movie and record industries: getting hung up on trying to stop unauthorized copying. We can make more money than ever by delivering the best customer experience ever if we use the new tools we have correctly. If we don't, we will get left behind.
Fred Valiquette:
I do believe that mobile will be a huge market. 3G networks, live TV, and video conferencing are already in place in Europe and Asia. It's opening a whole new market of customers.
Allen Ingram:
I am a little biased, given that we were the first company to add a mobile component to our affiliate program. I see more growth in this market and tons of new methods of delivering content at ever-increasing speeds and quality.
Jake Cruise:
Are people really going to watch porn on their tiny cell phone screens while riding the subway? That kind of creeps me out, personally.
Asher Hardt:
But I mean come on, who doesn't want to have pictures of the hottest girls around just chillin' on your phone? I have been saying for the past year that the adult mobile industry is going to take off. It's only a matter of time. Of course, there are going to be strict regulations that go along with this. Just like I believe that PDAs are going to make cell phones obsolete, I think that within the next five to 10 years everything you need to do – Internet, word processing, surfing, TV, etc. – will be accessible through your PDA, and along with all of those things, you will find porn, right in the thick of it.
Dave Levine:
Eventually wireless Internet will be available everywhere like cell phones. When this happens, there will be tons of Internet applications that will be much easier and less expensive to deploy than the current need of going through the cell phone providers. This will open up huge opportunities.
Derek Meklir:
In my mind [mobile phone and also virtual reality/interactive porn] is going to be huge. The mobile phone is basically going to run our lives, so why shouldn't it run our porn as well? The idea of interactive porn with Bluetooth gadgets that do what I saw at Internext just seems like the next step in the experience.
Eric J. White:
Immersive environments and virtual reality are going to be huge. People have quickly adopted online gaming and online worlds; sex chat is the most popular use of chat. Being able to interact with other people in a virtual Matrix-like world is the next obvious step of combining the two. There have already been attempts at this, but they have been too much, too early. One thing I've learned is that although the technology can leap forward, the public can only digest it so fast.
Marc Womack:
I think there are going to be some very interesting possibilities when the next-gen video game consoles come out. Microsoft's whole plan for the new Xbox 360 is to have an appliance in your home that handles "all your media." But what about porn? I doubt Microsoft will have a porno option on the system, but I also am equally sure someone out there is going to figure out how to do it.
I know what can be done when you've got an all-in-one appliance where all your entertainment can be run from the living room. Once mainstream America gets used to the idea of downloading and viewing pictures and movies in their living rooms, they're going to start wanting to download and watch their porn in the living room as well.
Dick Hunter:
VoD is getting big, too, and with the recent introduction of software such as Prodinix, stands to get a lot bigger in the coming years. Five years ago I realized that most people are looking for something very specific, and when they find it, they're willing to pay for it—whether it's an entire niche, or just the look of a certain model. I imagined that, eventually, this would lead to a more pay-per-view-based market that would allow customers to purchase as little, or as much, of the specific content as they want.
Marc Womack:
Definitely porn on your TV from the Internet instead of from DVDs. Who would whack off in front of their computer if they could do it in front of their TV?
Jack Shamama:
I really can't imagine anything but a purely digital delivery for everything. Sooner than anyone thinks, DVDs will go the way of the VHS tape.
Joe Holm:
The Internet is just another way of delivering adult content, the best and most profitable so far, but it too is changing as new technology evolves. The demand for instantly accessible and easy-to-consume porn is here to stay; the means of delivering it will constantly change, though. We need to be ready for and fast with implementing new distribution methods, because consumers don't stop buying porn—they just change the way of doing so.
Dravyk:
The state of the adult industry is overall downhill. Is that pessimistic or realistic? Time will tell. 2257 is written so broadly that one of the zillion interpretations is that it could even affect what's on ad banners. When you get to that point, the bulk of adult webmasters are affected, and many are leaving the industry in record numbers. The industry has been beset by increased chargeback threshold rules by Visa and the banks, by patent vultures like Acacia, and once again by the U.S. government doing the work of the "Moral Minority." And this is only going to continue. The adult online industry will get only smaller and smaller.
Arthur Chang:
New companies are popping up every day, on the video side as well as the Internet side of the business. This is an indication of two things: one, there's tons of demand, which is great, and two, expect tons of cookie-cutter wannabes creating mediocre products.
Greg Moss:
I think the adult industry is currently in a state of extreme change. The growth is still consistent and I believe poised for substantial growth. There continue to be new technologies that will help reduce and control costs for companies, as well as new billing and payment solutions like SMS and prepaid cards that will attract an untapped market and grow the overall market over the next 24 to 36 months.
Tera Lord Masters:
Business is booming, and there is still plenty of money moving around. Nothing is ever permanent for everybody. The best thing to do is to play the game right, be smart, protect yourself, and be comfortable with your business practices.
Richard Excoffier:
I spent 10 years in the video game industry before doing this. I can see a lot of parallels with this industry. Smaller companies will be acquired by bigger ones; entrée tickets will grow, preventing smaller players from getting in; people and companies will become more professional, and sooner than you think it'll all be salespeople in suits at the shows. It's just an environment to evolve in, no more.
Michael Sprouse:
We need to provide new platforms over which customers receive our products and be both proactive and reactive to demand. And we need to think globally. There is lots of potential for electronic distribution of adult entertainment and frankly, some countries are much farther along in providing those options to consumers than we are.
Fred Lane:
The honeymoon may be over, but it's still possible to have great ... sales. There's still room for some growth, as the wired segment
