In 1996, Karl Bernard was a shy 18-year-old guy with a porn habit and some programming skills. From within his parents’ basement, he built a two-photo-per-week site and helped to pioneer the teen niche.
Today, Bernard is the president and driving force behind Montreal-based Gamma Entertainment, a largely self-sufficient operation that houses the GammaCash and FameDollars programs.
He’s been through just about everything this industry can throw at an individual—theft, loss, and the failure of the company’s processor. Through it all, he’s persevered, maybe for no other reason than he loves what he does for a living.
How did you get into surfing for porn?
My dad’s friend asked me if I knew anything about the Internet, because he had a business and wanted to build a website. I had no idea what it was, so I started looking into it. I discovered I could get free Internet access with America Online for a month. When I was 18, I was very shy and didn’t have a girlfriend. I guess porn came naturally when I started looking for things on the Net.
You’ve gotten over your shyness since then?
[Laughs] I guess. You could ask my girlfriend.
How did you build your first sites?
Back in those days, not many people were worried about copyrights. I basically was collecting pictures I liked and putting them on my website. It wasn’t until ’96 or ’97 when all the members of the YNOT Network decided that in order to be a member of the network, you had to own all the copyrights for your content. I think we probably started the teen niche, and back then there wasn’t much content. We started working with photographers who were sending us Polaroids of girls and asking if we wanted them to shoot the girls. We had about 10 photographers recruiting young models for us. Before that, it was a free-for-all: Any content was content you could use.
When did you start shooting?
We never directly produced any content; it never was something we wanted to do. We wanted to focus more on the marketing and technology. On our website we had a message soliciting photographers, and that’s how people started working for us. We were paying $25 to $50 per image—an image you could purchase non-exclusively for a dollar or two, today.
Your first revenue came from member donations. Were you surprised?
I was running a site on my personal ISP and was worried they would charge me for all the bandwidth I was using. I was offering two free pictures per week, and I posted a notice on the site. If people liked what I did or wanted to encourage me, they could send money. A few people did, and I had $2,000 in a few weeks. That’s when I realized I could make a business out of the website.
That first website was stolen from you by a business partner. What did you learn from that?
I learned that not everyone is trustworthy, and you need to choose your business partners very carefully. I tried to seek legal recourse, but after spending $20,000, I found that the legal system could get really expensive and it wasn’t worth it. By that time, I had a new site and was almost back to the level I was with my first site.
Were you discouraged at all?
No, I was really into it. It wasn’t really a business at the time; it was more like a hobby, so I dove back in. There never was a question whether or not I should start over.
The business has changed quite a bit from those days. What’s the biggest difference?
People today really need to take this business seriously. It costs money to start a site and do it the right way. Back then, when it was only a matter of exchanging small pictures, you could get away with not paying for content, not paying much for hosting. Today, you have huge bandwidth bills. You’re not offering small pictures, but huge movies.
Why did you drop out of college?
The business was taking a lot of my and my partners’ time. I really believed it could be a long-term business. They stayed in college, and I stopped to focus 100 percent on the business. I thought by giving it 100 percent of my time, it would grow faster.
How did Gamma form?
We started with the teen site, WebYoung.com, and then built a second site and a third. It was working well. We were getting free traffic from the search engines, newsgroups, and link exchanges. Still, we realized in order to grow even faster, we would need to buy advertising from other sites. Back then, we saw a few programs that paid per click, made some calculations, and thought it could work for us. I programmed an affiliate program that paid affiliates 5 cents per click, and that’s how GammaCash started.
You were working from your parents’ basement back then.
That’s right. I moved from home in ’98, and it’s only been since 2000 that we’ve had an office. At the end of ’99, we were using DMR for credit card processing. They lost the ability to process, and it was a huge loss for us. We lost $500,000 in credit-card revenue, but we made the decision to pay our affiliates regardless. We also decided we wanted to have control over every possible aspect of the business, so we opened an office and started hiring and doing almost everything in house.
What did your family think about your job in porn?
My grandma is really proud. My parents have no problem with it. Montreal is a really open-minded city, and my family always has been really open-minded.
In 2000, you moved into a 5,000-square-foot office with four people. What was that like?
We figured we had better do everything right, so we rented this office, furnished it, and bought computers for every station. During the first few months, there were four people working in that huge office, and it didn’t make it easy to hire people—seeing four young guys in their 20s working in that huge empty space.
You’ve made your operation almost self-reliant, with your own personnel, servers, software, etc. Does that have anything to do with having your first site stolen?
Not really. I’ve always been really hands-on. When I was in college, I was studying computer engineering. I programmed the first version of the affiliate program myself. I always liked technology and always felt we should build it ourselves. I realized how vulnerable we can be to external factors when we lost the ability to process credit cards and lost all our membership records. We would have been out of business if we hadn’t saved money from the previous year’s profits.
If you hadn’t paid those affiliates when DMR went down, do you think your business would be drastically different today?
Maybe it wouldn’t be, but I wouldn’t feel right if we hadn’t paid them. I’ve always been proud that we’ve paid every affiliate on time for 10 years now.
How do you adapt to what’s happening legally in the U.S., or do you even bother?
Most of our business partners and affiliates are based in the U.S., so we have to worry about regulation. We may not be as worried as they are, but we try to comply with any regulations, because it wouldn’t be acceptable for our partners to be exposed through us. However, we do feel being in Canada adds a layer of protection.
In addition to Gamma, you also own two videogame stores. Are you a gamer?
No, I’m not. My partner in that business knows the industry really well. I thought it was important to open a brick-and-mortar store, and the videogame industry is one that makes more money than Hollywood, so I thought it would be a good one to be in.
Why did you feel it was important to open a brick-and-mortar store?
It’s something in which I wanted to gain experience. I found that it’s a very different business. It’s hard to make money. You need to build your brand and make your plans for 10 years from now—not just one or two years.
You also distribute skincare products from France, a co-venture with your mother. What’s up with that?
I wanted her to be able to work for herself, and she was interested in the cosmetic industry.
So, you don’t have any expertise in French skincare products?
No, I don’t. I thought it would be a cool way to meet nice-looking chicks, but I was wrong. [Laughs]
You’re recently engaged. How did you meet your fiancée?
We knew each other, but we became closer at Internext two years ago. She was working for another company in Montreal, and we basically hooked up there—the magic of Vegas. She had a boyfriend and I had a girlfriend and…the hell with that.
What’s next for Karl Bernard?
My focus is to keep growing my company. We started with four people, and now we have more than 60. We’ve been in adult for 10 years, and we think we’re really strong in this industry. Most of our focus is in adult, but I’d also like to grow my hosting company, as well as some mainstream ventures.
You’re not looking for an exit strategy anytime soon?
No, I love this industry.
If you were ever on the cover of Forbes, what would the headline read?
What’s Forbes? [Laughs] Just kidding. I would rather be on the cover of AVN Online.
