Preface

In 1998, I wrote two articles for a Silicon Valley magazine, TechWeek,

dealing with the influence of sex on the Internet. The articles provoked

an avalanche of reader mail split about 1 to 4 between those who wrote

“How dare you cast the evils of sex and pornography in a favorable

light!” and the vast majority who said, “You’ve just scratched the surface.”

I responded to the first group that I had no intention of being porn’s

spin merchant or of trying to cast the sex industry in a good light.

Neither had I set out to deliberately cast them in the worst possible

light.

But as a writer, business journalist and technology entrepreneur,

online porn seemed to be a substantial part of the content and profits

on the Web and for that reason it deserved to be looked at with a cold,

hard eye that moved past the cleavage and sweaty bodies and gave it the

same sort of analysis that was devoted to other sectors of the growing

Internet economy.

After doing more research for several months, I decided that there

was some substance here: the online sex industry was more important

than its critics would admit and less important than its promoters

touted. Indeed, it seemed that perhaps the online sex industry’s innovations

may be influential far beyond its gross revenues (its critics say

that all its revenues are gross). Indeed, porn has affected the lives of

everyone who uses the Internet whether they’ve ever gazed at a salacious

photo or not.

With this in mind, I began my research for the book just about the

time the “Great DotCom Meltdown of 2000” began. But as the “tech

recession” continued and pulled down with it the entire American

economy, I noticed that the Internet sex economy continued to flourish.

Hundreds of millions in profits financed ever more elaborate websites

and technology. Despite the DotCom economy leaving more

streaks in the night sky than the Russian Mir space station, sites selling

sex succeeded sensationally.

The continued success and profitability of the sex industry drew a

starker and starker contrast with every passing week until it was apparent

that virtually all of the profits being made in the New Economy to

this point were derived from sex.

Despite all these obvious successes, this book was very hard to write

thanks to the adult industry’s culture of anonymity along with its

extreme reluctance to talk about what it does.

“People in this industry are reluctant to talk to the mainstream

media because it seems that whatever we say only gets distorted,” said

“Otto,” the Net alias for one of the top managers of YNOT.com, an

adult webmasters’ message board and resources site. “The mainstream

media knocks on our door every now and then for some Geraldo-type

sensationalism. They need some titillating sex to spice up their ratings

but they always twist things and we come off looking like perverts in

raincoats because that’s what their prejudice says we should look like,”

Otto explained.

These libertines in our Puritanical world camouflage their lives

behind aliases, blandness, evasion and euphemism in order to avoid

social and sometimes legal retribution. Almost NO one uses his or her

own name. People who report for the industry’s main trade publication,

Adult Video News, use pseudonyms, as do adult film directors,

producers, actors and actresses.

“Look, there’s the PTA, for example,” one adult Internet executive

explained to me. “If they know what I do, my kid suffers. I know kids

who were kicked out of private schools when they found out what the

parents did.” Luke Ford, who for years served as the Matt Drudge of

porn, covering the industry with a melange of gossip and reporting,

was kicked out of his synagogue when his rabbi found out that he was

a journalist covering the industry. Ford eventually gave up reporting on

the industry so he could follow his religious path.

Ford’s big mistake was failing to adopt a “handle” and live within

the plain brown wrapper culture. Others in the industry told me that

they have no problems with church and synagogue because they leave

their adult pseudonym behind. “Yes, I think a few people in my congregation

know what I do,” one film producer told me, “but as long as

I’m not in their face with it, I don’t have a problem.”

Pseudonyms and anonymity allow people in the sex business to conduct

the mundane parts of their lives without hassle.

Carrying two lives around in one head comes at a price. Most in the

industry carry great loads of anger at having to live their lives in plain

brown wrappers. “The same people who take our money and can’t get

enough of people having sex on their computer screens are the first

ones who raise a stink about what we do as people,” one adult site

operator told me.

But the wrappers conceal more than the people. Drive the streets

through the “Silicone Valley” northwest of Los Angeles—which contains

the largest concentration of adult businesses in the world—and

you’ll never find the real name of the company on the building. They

all sit in boring concrete tilt-up buildings along forgettable commercial

and industrial streets with no hint of the activities inside. VCA, for

example, is one of the largest producers of sex videos and yet its office

building signage says, “Trac Tech.” Most frequently, there is no signage

at all, just a street number. Receptionists are equally circumspect,

answering the phone sometimes with the street number, “Hello, this is

8060; how can I help you,” or often with just a bland “reception” or

“corporate offices.”

Adult Internet sites rarely list an address, e-mail address or a phone

number. There are none of those “Who We Are” or “Our Team” links

on the site. I solved much of this by attending several adult industry

trade shows and cornering the big cheeses in their booths. Most of

Preface xi

these trade shows are fogged dense with cigarette smoke, the booths

filled with barely dressed women and the air heavy with techno-rock

vibes turned up so loud they can almost make your ear drums bleed.

Interviews in this environment were tough and the people tougher.

They were mostly distracted, disingenuous, dishonest or disinterested

and always paranoid and suspicious: was I an undercover IRS agent

trying to trace the millions they had sent on a tax-free vacation to the

Caymans or Vanuatu? Perhaps I was a prosecutor gathering data for an

obscenity trial? Or just another clueless reporter? I ran smack into this

same stone façade from person to person to person. Some lectured me

on how wrong the mainstream media was about them, as if I had written

all the distorted stories they had ever read.

Fortunately, some of them opened up in follow-up conversations

after the show as I gradually gained their confidence. Some told me

their confidence was boosted by the previous magazine articles I had

written which rang true to them. Others were more convinced by the

fact that one of my oldest friends in California is a former Mormon

missionary with a masters degree in film from Brigham Young

University who is now a well-known producer of adult films for one of

the large studios in Silicone Valley.

The great wall of silence eventually cracked open for me. Those

face-to-face trade show meetings turned into extensive phone and email

exchanges with some of the key people in the industry. Equally

important, I had met face-to-face and however briefly the flesh-andblood

people behind the handles on the Internet message boards,

allowing me to know that the handles I was e-mailing and conversing

with were real people who were what and who they said they were.

Women in the industry and webmasters of smaller sites were the

biggest exception to the wall of silence. Early on and often, they sent

me unsolicited e-mails and reams of anonymous documents. They told

me where to look, what to ask. And even though they each had only a

limited view, when put together, their combined information provided

a surprising and broad perspective.

I was fortunate also to find the owner of the industry’s largest single

operation, Cybererotica, the sole exception to the ringing silence at the

top. The “Fantasyman” (whose real name appears only once in the

book, at his request and as a condition of being interviewed) was

remarkably candid and accessible. The rest of the big players were inaccessible.

They may complain loudly on the message boards that they

weren’t quoted here, but they were given many opportunities to tell

their side.

Note that Fantasyman, who is the biggest player in the adult

Internet and its acknowledged innovator, prefers to be referred to by

his handle rather than his real name. At trade shows and even in private

conversations, people frequently refer to others using their handles

rather than their given names. While that may seem odd to many people,

it is absolutely the rule rather than the exception in the plain

brown wrapper culture.

When I set out to write this book, I was determined to enforce a

judgment-neutral tone that focused not on the content or the people

involved, but purely on their influence over and development of technology

and business models and how those impacted the lives of even

the most rabid anti-porn Internet user. The people and the content of

porn are subjects for other authors and have been well covered. If you

are looking for further reading, I recommend: Obscene Profits: The

Entrepreneurs of Pornography in the Cyber Age, by Frederick S. Lane,

(January 2000) Routledge; A History of X: 100 Years of Sex in Film, by

Luke Ford, (September 1999), Prometheus Books; Porn: Myths for the

Twentieth Century, by Robert J. Stoller, (August 1993), Yale University

Press. These along with a more complete list of books on the subject

(sorry, none with centerfolds) can be found at the EroticaBiz Website,

www.eroticabiz.com.

When I began outlining this book, I did not intend to have extensive

chapters on scams and flim-flams. But those chapters are here now,

partly because they chronicle unique dodges that would not have existed

without the profitability of online sex and because the voluminous and

Preface xiii

detailed facts as presented in the court documents provide a credible reality

check against the industry’s bragging and hyperbole.

A few ground rules. First of all, as you will read, the volume and

pervasiveness of sex on the Internet means that sex has become mainstream.

Thus, I use “non-adult” to designate non-sex websites instead

of “mainstream.”

I have also tried to stick pretty close to the main theme of “How sex

shaped the Internet.” You’ll find an emphasis on technology, revenue

models and other things that are unique to both sex and the online

world. For that reason, the book does not deal with personality profiles

or profiles of specific companies beyond what’s necessary to describe

their innovations and contributions to the industry. There are no discussions

of porn performers, of AIDS, and no lengthy discussion of

obscenity except for how the Internet and other technology are changing

the definition of community standards in judging whether something

is legally obscene and thus illegal.

The issue of changing community standards of obscenity is only one

example of how the technology that sex has shaped is, itself, shaping

sex and culture in the physical world. All in all, this has been the

strangest literary journey I have had since piecing together shredded

documents in Washington, D.C., when I helped expose the Koreagate

scandal and fueled a Congressional investigation back in the mid-

1970s.

As you read farther, please keep the following in mind: whether you

love or loathe the online porn industry, everything it has done in the

past eight years, every success, each failure and even the scams some

have created have a very important lasting effect on your non-porn life.

Web sex provided the only income stream to the nascent World Wide

Web, revenues that developed the technology, the market and funded

innovation out of real profits. E-porn has also sustained many nonadult

Internet companies during the Millennium Meltdown when so

many DotComs went DotGone in 2000 and 2001.

Because of this, there are important lessons to be gleaned from the

people in the online sex industry. We gain valuable context from their

different ways of seeing the world. We learn valuable insights about ebusiness

in general when we look at how they have approached the

process of building Web businesses and developing technology that

focus first on the user and usability. Valuable lessons of creativity and

resourcefulness are even woven throughout the court records of those

nailed for fraud. The lessons are here. Some I have discovered and

highlighted for you and others remain to be discovered hiding among

the details.

Lewis Perdue, Sonoma, California

August 2002