Has the Web made porn respectable?

The Web professional next door just might be running an adult site. But it's probably not making him rich.

Published September 30, 1998 7:00PM (EDT)

"I call it adult entertainment, not porn, because we're not sleazy guys walking around selling chicks," says Andrew Strauss, owner of WallStreetSex.com -- where "outrageous, gorgeous, luscious SexBrokers await your Margin Calls." He gestures vaguely and continues: "I mean, in one sense we are, but we're not in there watching it go on, we're not watching the girls."

Envision a porn producer and you'll probably come up with Burt Reynolds in "Boogie Nights" -- a shameless, smarmy lech with excessive hair and a bad mustache. Strauss, on the other hand, is a veteran of the South Park multimedia scene: With his button-down shirt and silver accessories, he oozes San Francisco tech hip, down to the goatee and the motorcycle parked out front.

The Web is changing the landscape of the pornography industry -- transforming what once was perceived as a pit of sleaze into something almost respectable and even cool. No longer is the porn world limited to back-room studios in the San Fernando Valley and the red-light districts of metropolitan areas; it's become a do-it-yourself industry that turns up all over the map.

Of course, the adult Web offers sleaze aplenty -- home pages for porn stars, creepy marketing gimmicks and come-ons for underage or "barely legal" smut. But it's also increasingly a place where college-educated Web professionals like Strauss are turning their entrepreneurial talents to "Hot Horny Pix."

These new purveyors of porn are entering the field not out of passion for their "content" but because they dream of making Web-sized fortunes. But the market they're entering is already wildly overcrowded. And it turns out that the people who are best positioned to make big profits from those "hot pix" online are the same ones who have been profiting from them for ages offline.

It's hard to gauge exactly how many nice-boy-next-door newcomers have taken up porn since the advent of the Web, but there are hints that the numbers are growing. Mike Tiarra, whose Tiarra Corp. builds adult Web sites, estimates that at least 70 percent of all Web porn sites are being produced by people who have no experience in the porn industry -- many are one-person operations, he says, run by broke housewives who think they might make some cash by taking their clothes off virtually, but plenty of others are being done by young, college-educated entrepreneurs. A recent survey on a San Francisco developer mailing list with about 400 subscribers turned up 10 Web professionals who are working on adult sites.

The lure, unanimously, is money. Forrester analyst reports have pegged the profits for the online adult industry at $185 million for 1998; other observers put the numbers even higher. Many Web entrepreneurs claim to be pulling in millions a year (although many also inflate their numbers). The Wunderkind of Web porn, 24 year-old CEO Seth Warshavsky of the adult network IEG, projects revenues of $50 million this year. Beth Mansfield, the legendary housewife/accountant behind the adult link emporium Persian Kitty, plans to reel in $800,000 in advertising revenues alone this year.

Porn is almost hip in the Web world: The Net's "dirty little secret" has been the subject of glowing tributes in trade magazines and business magazines alike. Few other industries are making money online, which could explain why Upside and Wired and the Wall Street Journal are devoting so many pages to the wonders of Web porn profits. So it's not surprising that Web professionals who read those awe-struck reports in business journals might want to tap into the heralded riches.

"Everybody knows that the largest profit center on the Web is porn. There was an article about a year ago in Wired, I think, about a German company that claimed that it was making tons and tons of money making porn on the Web," says Russ, a Web developer who recently began producing e-commerce software for porn sites (and who requested that his last name not be used). "The story glorified them -- they were proud of it, and kind of dared you to come after them. But I think that was an early sign that it was going to be cool among some crowds to be involved in porn on the Net."

There has, of course, always been money to be had in the porn industry -- by most reports, porn is an $8 billion industry in America alone -- but the Internet has put that money into a medium that Web workers are comfortable with. You don't have to have connections in the porn industry to get started; all you need is some pictures. You don't have to deal with bodily excretions and shady customers; instead, you deal with sterile pixels and HTML. Web porn entrepreneurialism offers all the revenue of the porn world without having to deal with the physical reality of sex and the human body.

"It's cleaner. You don't have sleazy stores on the street and riffraff hanging out," explains Strauss. "You don't have to deal with the Mafia or Asian gangs -- they can't control the Net when anyone can do it from their bedroom. You don't have the smell and the sound of the girls in front of you with dollar bills in their G-strings."

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The barriers to entry for Web porn are low: Anyone can put together a rudimentary adult site for under $1,000 by purchasing a CD-ROM of pornographic photos and slapping up a Web page. Adult Webmaster resources like the YNOT Network list hundreds of distributors of pictures and video, as well as adult e-commerce and verification services. Other companies, such as Tiarra Corporation, will assemble the whole kit for you: A rudimentary site with pictures and ad banners goes for as low as $3,499; $4,999 will get you a video feed; $34,999 will get you an e-commerce subscription service. CEO Mike Tiarra says he gets about 1,000 requests a month, primarily for the entry-level packages.

But the problem with this kind of a color-by-numbers site is, simply, that there are so many out there already. According to James Mann, producer of the porn database Naughty Linx, there are at least 30,000 adult sites on the Web, over 85 percent of which are commercial, and an overwhelming number of them carry much of the same content. The majority of the pictures, for example, are from the CD-ROMs distributed by ZMaster Productions, which offers the cheapest hot pics at 2 to 4 cents a pop. Even adult sites with live video are often cookie-cutter -- over 1,400 sites, for example, license IEG's streaming video of live men and women in action.

What there's a distinct shortage of is well-designed adult sites with quality material -- and this is where most of the new Web porn entrepreneurs see their chance. After all, building stylish Web sites is what they do for a living.

Arias Hung, for example, has been working in the computer industry for nearly six years, doing network administration and Web production, producing techno music and magazines. Dreadlocked and progressive, he says he has no more interest in pornography "than your average guy." But when he was coming up with ideas for an online business, pornography seemed obvious. Not only was sex where the money was, but most of the sites he looked at were awful; he thinks that his Web experience will enable him to build a site that stands out.

"There are a lot of sites looking at the fast cash -- they are milking the people who are getting online, doing a lot of shady things," says Hung, who plans to launch his series of classy gambling-and-sex sites, called Masterplay, in early 1999. "You're not getting premium product out there, and that's what people are looking for. You have to wade through a hundred million sites to find stuff that is quality."

But creating "premium product" isn't cheap. Hung estimates his first year will require $290,000 in capital, and he's starting out with $50,000 in seed money (unlike other porn entrepreneurs I spoke to, Hung says finding investors hasn't been a problem). The main cost: original content.

Original content is crucial in the adult Web. -- wary porn surfers will quickly recognize that your Busty Babes are the same Busty Babes from the XXX Collection they saw a few pages back. But fresh content is costly. A photo shoot with a porn star or striptease artist can cost up to $500 for one day; a live video feed can cost tens of thousands of dollars in technology, not including the $15-an-hour fees for the performers' time. And it isn't always easy to track down responsible performers who will work well and show up on time.

Andrew Strauss, for example, spent more than $60,000 setting up a live video system; his company paid an array of women -- recruited through ads and friends -- hourly fees and a percentage of the profits to perform live at its warehouse headquarters. But although WallStreetSex was doing reasonably well, with 150 regular members and tens of thousands of visitors, he found that live video was too expensive. He also says that some of the performers were "weird" or had family troubles: "Some were abused, had bad boyfriends, real problems. It was depressing. I couldn't deal with the girls, and didn't want to hang out with them." After three months, he decided to license his video from outside; today, having lost nearly $15,000, he's decided to sell the entire WallStreetSex site and move on.

"We wanted to take on Seth Warshavsky -- he had the market share, but his stuff is crap," says Strauss. "The reality is that we got into this later than we anticipated, and there's a lot of competition. There's only a few sites that can create live content. People think they can make a lot of money in it. They can't."

Industry observers agree that most of the Web pornographers raking in the big bucks are those who already have connections in the industry: 900-number operators with staffs of hot-talking women, video producers who know porn actresses, magazines with portfolios of pictures. Not only can the offline porn industry leverage its X-rated resources, but it can leverage its brand name and revenues. In this saturated market, your average Web worker who tries to launch a site with a small investment is going to have a hard time competing with the porn professionals.

"I think adult content is overly exploited; it's very difficult to make money right now," says Warshavsky, who talks to me on one of his two cell phones as he navigates his BMW through Seattle. Warshavsky owned a successful phone sex company before starting IEG in 1994: "We invested $3 million in setting this up, and we were the first major adult content player in the world. Could I start today and be where we're at? No. Could you start in your basement and make a few thousand dollars? Probably. But adult content is tapped: There are 20,000 or 30,000 sites out there. There isn't a lot of new ground anymore."

In many ways, the rewards of Web porn depend on your ambition. Entrepreneurs like Strauss and Hung, who envision adult empires on the scale of that of IEG, are going to have a tough time competing. But there are also plenty of entrepreneurs like 25-year-old "Ken," a computer consultant who has been producing a modest site of soft-core smut called mystique-xxx since May 1997. This one-man operation is just one of several projects he works on, he says, and he never intended to make it his career. Ken had expected to bring in nearly $20,000 a month, based on estimates he'd read in Interactive Week articles. Instead, he's making $2,500 a month in membership fees. That's not as much as he'd expected, he says, but it's still a nice income that he hopes to use to finance another start-up, or eventually go back to school for a master's degree.

Ken's profits are more typical of Web porn. The average adult webmaster, Mike Tiarra estimates, is making about $2,000 a month -- not an unhealthy living by most standards, but a pittance compared to Warshavsky's millions.

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Pornography has undoubtedly moved more into the mainstream. Would-be Playboy models cavort naked on Howard Stern's TV show; "The People vs. Larry Flynt" and "Boogie Nights" are box-office hits; women's magazines are chockablock with stories about "my life as a phone-sex worker." But does that mean that producing pornography has lost its stigma?

"Pornography has acquired a certain pop-culture cachet, particularly in the last few years and especially with the rise of the Net," says Lisa Palac, the sex-positive author of "From the Edge of the Bed." "The old stereotype of someone who makes pornography as being a trench-coater, a dirty old man or a Larry Flynt, that's really changing. It started in the late '80s and '90s when women began getting involved with porn."

There certainly are plenty of sexually liberated women and academics who are attempting to change mainstream thinking about the porn industry. "I think what's changing that perception is money," says Pauline Albamar, who started the successful site Babes4U after receiving two master's degrees from NYU's Interactive Telecommunications Program. "Money is what defines things, and the fact that the sex business is making money online, the first industry to do so online, has really garnered a lot more attention and shift in attitude. Have people's ethics changed about sex? I think it helps if people like me, relatively young and intelligent women, have no problem making money off pornography -- then it does change people's perceptions."

But despite the ministrations of the young-women pornographers and pro-sex feminists, making pornography is still considered dirty by the vast majority of the population: Just look at the indignant anger that has pushed upcoming legislation restricting adult content online. And while women who produce pornography often portray their career choice as a political act of sexual liberation and are "forgiven," male pornographers still seem more motivated by money than sexual politics. Since male Web porn entrepreneurs rarely perform for their own product, their role often reeks more of exploitation than exploration.

More than half of the male pornographers I interviewed for this story were unwilling to use their real names. As most explained, they don't think pornography is wrong, but they don't want their future reputation to be tainted among those who do think pornography is sleazy. It may not be a shameful business, but they aren't proud of it either.

"I don't want to be remembered as one of those who made his success on Web pornography," says Russ. "I want to be remembered as someone who brought, say, a commercially viable new form of education to intercultural relations. That would make my mom proud."

It isn't easy to straddle the line between "respectable" work and pornography: One graphic designer, for example, who spent a year working for a large live-sex Web site, now finds it difficult to get employment with his portfolio of smut. Other pornographers also have "legitimate" businesses that they don't want associated with their sexual undertakings.

Explains Daniel Wood, a former Geocities employee and computer consultant who is about to launch a site called "Cosmic Pussy," "I do have reservations about getting into the industry, because I have a reputation as a legitimate business owner that I would hate to have trashed. There is that stigma, that he's a smutty guy because he does porn. You lose a bit of respect by associating yourself with such things."

The porn dabbler often doesn't even tell his family or friends, especially if an adult site is just one of several projects that he is working on. Those who do are sometimes surprised by reactions: Strauss, for example, found that while many of his friends cheered him on, there were others who were appalled, and some who even stopped speaking to him. Even in the liberal San Francisco Bay Area, home to Annie
Sprinkle and Good Vibrations, there are still plenty of young people who find pornography exploitative and think that men who hire girls to produce lusty live action are "pimping."

"As long as these guys say, 'Shh, don't tell anyone,' then we haven't elevated the role of the pornographer. They're still ashamed of it. If they're just doing it for money, they're just the latest in a long history of men who do it under a pseudonym and hide what they do from their family," says Palac. "Our perception of porn will change when people start admitting, 'Hey, I'm a writer and a journalist and I also operate an X-rated Web site and I'm proud of it.' When that happens we'll have reached a new level of how society accepts pornography."

For now -- even though online anonymity and accessibility have spurred more men and women both to produce and peep at pornography than ever before -- it seems that the Web's dirty little secret is still considered dirty. The "Boogie Nights" image, like it or not, still pervades.

"People just want to see each other naked doing stuff that's strange, and they'll pay to see it. It's been true for thousands of years, and will stay true for thousands more. And there will always be people who find it repulsive and have no tolerance for it," sighs Russ. He continues: "I wouldn't say my hands are clean, but I don't know anybody whose hands are."

By Janelle Brown

Janelle Brown is a contributing writer for Salon.

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