Canada is the world’s second-largest country by total area, extending from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean. In recent years, the country has dipped into the proverbial honey pot of the online adult industry and is fostering a slew of successful adult companies.
Many of these companies have been content to sit quietly in the background, all the while adding revenue and innovation to the online adult landscape. Some Canucks say the decision to set up shop was more about geography than anything else: They were born and raised in Canada, and they like living there. Others say the country’s open-minded atmosphere provides incentive for operating an adult business. Still others argue the higher taxes businesses pay are a hindrance to the growth of the industry. Whatever their reasons, major adult powerhouses are expanding beyond the country’s borders. Whether building brand names through affiliate programs such as Gamma Entertainment and Braincash, or fighting and winning obscenity cases like Sweet Entertainment (see sidebar), something is happening.
AVN Online hosted a virtual roundtable for several of Canada’s noteworthy company heads, directors, marketing and public relations gurus, and prominent personalities to find out some of the pros and cons of running an adult online business in their country. Whether it’s French-influenced Montreal, cosmopolitan Toronto, or tranquil Vancouver, what we discovered is Canada has its own Porn Valley.
Liberalism versus the U.S. government
“Canada is one of the more progressive countries in the world when it comes to adult content production and distribution. We find it a very comfortable business and regulatory environment from which to operate,” says Eric Johnson, president of Sureflix Digital Distribution, owner and operator of the Maleflixxx global network.
“Laws favor our industry, we have the room to grow our businesses and we’re not surrounded by Bible-thumping bigots trying to shut us down,” says Allen Ingram, chief operating officer of M Squared Productions, which operates MaskTV.com and its affiliate program Banking Bucks. “The U.S. government is doing our industry no favors right now, and that’s been the way of it for the past few years under this administration. Legally, it’s easier to operate here and probably more secure in the long term.”
“Over the past eight years, producing adult content is generally more accepted now than it [used to be]; models are more open, fun, and less reserved and uptight about working for companies like mine,” says Brian H. Gillis, president of Northern Exposed/Men of Steel Inc., a company specializing in gay male content and model management. “When I first began, it was a constant battle of legitimacy, as the models didn’t really accept the Internet as a legitimate place to work.”
“As [Canadians], we’re not as stressed about U.S. regulations like 2257,” says Gamma Entertainment President Karl Bernard, whose nearly decade-old company manages adult websites and maintains marketing for several affiliate programs. “Still, we work hard to follow them for our U.S. partners.”
“Depending on what country you compare Canada to, I would say that—legally—we have advantages, especially in Quebec,” says Karl Hamilton, chief executive officer for affiliate program LiveBucks.com. “I wouldn’t say it’s the best country to get started in, but we’ve made it so far without being pestered too much by the government.”
“In general, within Canada—although content is produced here—there are many restrictions compared to European countries that have more lax laws,” says Ben Soares, director of public relations for gay content provider MANCheck.com. “We do, however, have laws that protect our Canadian content, and many Canadian-based and -represented companies find that, to stay on top, they have to at one point or another produce their own content—and a major percentage has to be Canadian.”
“I think the growth of the adult industry in Canada over the past few years has been like an iceberg: Most of it has been below the surface,” says WebcamCash CEO Barry Fruitman. In 2000, he and his wife and company co-owner, Hazel, launched their first adult site; WebcamCash.com followed two years later. “Since the expansion of 2257 regulations, many American companies have been quietly outsourcing their operations to Canadian companies, where they feel safer. This [is a] trend that will only continue as the U.S. government tries harder and harder to regulate—or eliminate—online adult content in America. The all-Canadian companies that are experiencing the most growth right now are the innovators; the ones that are expanding beyond the traditional monthly membership business model.”
“I think with the French culture in Montreal and our European background, we are a little more open minded toward nudity and sexual content,” says Johnny Lombardi, co-founder of Gioram Media Inc., which operates TastyDollars, SubmitPasses, and NicheSpots.
“Our industry is probably more accepted in general here than in the [States]. We’ve got some [U.S.] affiliates that can’t even admit what type of businesses they’re in to their communities, since it would not be accepted,” says Fred Valiquette, president of Braincash. “You see a lot of companies migrating out of the U.S., and Canada is catching some of that business because it’s the perfect place to work over the U.S. market.”
“Laws are a lot more slack here—we don’t have Bush,” says Vid Vicious, creative director and director of photography for Montreal Studio Multimedia (MSM).
“Montreal and Vancouver are both extremely liberal in terms of sexual attitudes. And, with deepening dangers in the U.S. in terms of obscenity and 2257 issues, the Canadian marketplace is already starting to explode,” says Max Sweet, director of operations for “extreme content” specialist Sweet Entertainment. “Hosting companies, talent agencies, and producers are all seeing a nice jump in business due to the current climate in the U.S., and I only see this increasing.”
“One of the benefits to being located in Canada is the more liberal laws. However, Canada does have some higher taxes, and that could be considered a disadvantage,” says Mark Hurson, president of Gallery Traffic Service and P2P Ads. “I would definitely recommend someone start a company here, but make sure you do some pre-planning when it comes to tax strategies.”
Gillis adds, “The federal government decided years ago to stay out of the bedroom. People are more liberal and willing to participate. Here, people tend to take the sex industry in stride and not make such a big deal.”
“The most obvious thing on everyone’s mind these days is the mounting antagonism from the U.S. government toward the industry,” says Dready, owner of content provider Adult Image Brokers. “Those of us who have established our businesses outside the U.S., I am sure, are very grateful. Despite that, many of us realize the continued strength of the industry in the U.S. is important to everyone. For that reason, I make donations to organizations like the Free Speech Coalition.”
Geography (according to the experts)
According to Soares, “We are built from a very tight-knit, multicultural mosaic that affords us inspiration from not only a diverse cultural makeup, but a reality and understanding of many different people.”
“It’s a great place to live,” says Hamilton. “Cost of living is reasonable, and we have access to great entertainment and awesome food.”
Says Fruitman, “Toronto is an excellent city to do business in, and a great place to hire all kinds of talented people.”
“Canada is in the enviable position of being one of the world’s best business environments and having one of the world’s highest standards of living,” adds Johnson. “Canada is also a very progressive country in terms of gay rights. This makes operating a gay adult business and attracting top-notch employees a lot easier.”
“I’m sure there are safer countries in which to work, but the political climate here is still fairly relaxed,” says Dready.
Ingram adds, “Canada is a beautiful country, and Vancouver has been voted the best city to live in on Earth three years in a row.”
Girls, Girls, Girls
“I’ve worked with Canadian talent coast to coast and find them friendly, fun, [and] open-minded, and most I can call my friends,” says Robert Assum, director of marketing for NichePartners.com. “A few of my friends ‘down south’ work with models all the time, and they describe it as an ‘assembly line’ motoring talent through shoots like a machine. I can comfortably say that Montreal is Canada’s version of L.A. The ladies are liberal, down to business, [and absolutely gorgeous].”
“Montreal does seem to be a magnet for the best talent in Canada, and the European atmosphere seems to make the local girls more open-minded,” says Fruitman.
“Ethnic diversity [in Canada is without limits],” says Vicious. “Canada was built on immigration, and there are so many exotically beautiful women here.”
Ingram adds, “Professionally, we have broadband, super-fast connectivity, and some of the hottest girls in the world for talent. Also, because it’s cold in the winter months, we have no shortage of bored, horny people who want to buy our products.”
On the other hand, “you do find some great talent like Malezia and Lanny Barby, but the talent pool is becoming quite thin,” says JoinRightNow.com/CutiesCash co-owner Slim.
“Women in Montreal are gorgeous,” says Mark Prince, president and founder of 2Much.net, which boasts 900 performers on its flagship site, LiveCamNetwork.com.
Hurson says, “First of all, Montreal’s hockey team absolutely blows! However, Montreal has some of the best strippers and poutine [a Canadian delicacy consisting of french fries covered in cheese curds and gravy] around.”
“Montreal and Vancouver are the hotbeds of Canadian content production,” agrees Mantas M. of review site Rabbits Reviews.
The future of the Canadian market
“We’re pretty full in some industry niches now, so competition is getting tougher,” says Ingram. “I see that as a good thing. It drives up quality, and only the best survive.”
“I’d like to see Canada step up—one notable area being the processing sector,” offers Assum. “Our banks should stand up and accept us as equals and not disallow us merchant accounts due to the nature of the transactions. Legalities evolve over time, and that will take its natural order. We will see a flourishing amount of new talent, professionals like myself, and more people coming from ‘up here.’ There is already exponential growth in Vancouver and Montreal, and this will continue.”
“Canada’s not the answer—it’s the alternative,” says Bernard.
“There is a group of well-known, established companies—especially affiliate programs—based in Canada,” says Dready. “However, I think there will always be room for new ideas and talented people to get ahead in this arena. Canada has a very high saturation of Internet use, high incomes, a strong IT sector, and a liberal perspective.”
Hamilton posits, “I think the one thing missing now is a Canadian billing company. Banks seem to be moving in the right direction and opening up slowly to higher-risk accounts. The banking system here is very different than in the U.S.; we have only a handful of large bank chains across the nation rather than the thousands of smaller ones in the states, making it much harder to get in.”
L.A., Miami…Canada?
The question of whether Canada ever will be adult’s third coast is open to speculation, but Canada’s movers and shakers seem to have found an encouraging climate for success. An open-minded pool of exotic and lovely talent, breathing room in an increasingly porn-hostile world, and freedom for business owners to operate in the open are among the aspects North Country adult entertainment entrepreneurs say they appreciate the most. Perhaps it’s time for the rest of the industry to ruminate about whether the next big porn economy is north of the U.S. border.
