The Naked Truth About Voyeurs.

Stiff competition. Deadbeat customers. Backend hell. Welcome to the real world of Internet porn.

By Edward Cone
When his dotcom employer folded last summer, the man who calls himself Adam had a fallback plan: amp up his efforts on his voyeur porn site, Publicflash.com, and turn it into a real business. Adam figured he'd have a blast getting attractive women to do full-frontal flashes outside the local Old Navy, in gas station parking lots, on park benches. Men would line up to pay for the photos, and he'd sit back and count the money.

But as Adam has discovered, running a porn site isn't so easy - or much fun. For starters, the exhibitionism market is crowded with competitors. Then there's the capital outlay required; maintenance and hosting cost hundreds of dollars per month. And there are unforeseen security problems that soak up time and money. "Some users gave out passwords, and they got posted," he says glumly.

Even the part with the nude models turns out to be a drag. "Content acquisition is a pain in the butt," Adam says. "It's constant hand-holding. I have one photographer in New Jersey - I say to set up a shoot, then the model backs out. I send money, harass the guy with email, and get my hundred shots three months later." And don't even ask how Adam's wife feels about it.
Welcome to the real world of Internet porn, a market where the easy money has long since been pocketed - and where even the established players aren't enjoying work the way they once did. In addition to the typical hassles that come with running any operation, this hypercompetitive industry brings its own set of issues: unique legal problems, deadbeat customers, and even the occasional moral qualm.

Which is not to say there's no money in online porn. Although exact figures are hard to come by, this is easily a $1 billion industry, with a complex economy all its own. At the center are a handful of well-established companies, like Cybererotica and Sex.com, generating several million dollars apiece each month. These outfits pay smaller sites for funneling surfers to their higher-quality photos.

If a visitor to, say, College Lesbians or The Gay Gallery connects to a pay site and signs up for content, College Lesbians receives a conversion fee from the larger site. A successful large operation like Cybererotica is really an umbrella company serving many markets with pay sites ranging from Boobtropolis and VoyeurDorm to Hardcrank and Fuck Force 5. Around this core and its affiliates is an ecosystem of ad-supported service sites, such as YNOTmasters.com, a portal for adult webmasters, and Persian Kitty, a hardcore link directory. Breaking in anywhere along this chain is tough.

It's still possible to make a modest income by posting some free pictures and links as part of an affiliate program. "If you have some expertise at getting search engine traffic or using thumbnail galleries," says Ron Levi, one of the principals at Voice Media, owner of Cybererotica, "you can make a couple of hundred bucks per month." But even that's harder than it was. Until last year, most pay sites dished out $50 per conversion. Now $40 is the norm. According to a July 2000 poll taken by YNOT, half of porn sites gross less than $20,000 per year. "The number of adult webmasters who aren't making money is higher than ever," says Oz, president of TheAdultWebmaster.com.

And taking on the big companies is near impossible. PrimeXTC, the most-hyped entrant of recent years, capped a lavish trade show launch with a private concert by David Lee Roth - then quickly disappeared. "The guys in charge didn't have a clue," says former webmaster Charles Kindall. "They wanted to meet chicks, but they failed to build the business."
Not even a legendary brand can guarantee riches. Playboy.com has lost almost $50 million in the past two years and last October laid off more than a third of its employees. "We underestimated the cost of creating inventory for the Web," says Playboy.com CEO Larry Lux. To keep the site alive, it's diversifying into online gambling in Europe and Asia.

Levi pities anyone dreaming about breaking into porn these days. "When we started in late '95, our conversions were about 1 of 20. Now our average is 1 of 200," he says. "If you started now in this business with $5 million and didn't make a single mistake, I still don't know if you'd make it."
For the aspiring Web pornographer, these are the challenges, business and otherwise.

Pimping the Product
People still surf for porn. The Internet represents nothing if not the great democratization of smut - bringing skin to millions of homes, dorm rooms, and offices around the world. According to the Online Computer Library Center, there are about 74,000 adult Web sites. And, except in extreme cases - like war or bioterrorism - sex remains the most-searched word on the Web. So, as in any business, success requires some fairly mundane but critical skills - like the ability to pick a good name, draw traffic, and generate revenue.

The problem is that the site names guaranteed to bring in traffic - sex.com, pussy.com, and just about any twist on fuck, lesbo, and cheerleader - are long since taken. There's not much room for a good branding campaign, so when it comes to marketing, the focus has to be on manipulating the search engines. "Just submitting a site doesn't do much. Even targeting keywords like 'Latin girls' and 'XXX' - if you're down there on the third page, you aren't getting the traffic," says Gary Grigoryan, VP of operations at YNOT. "It's a science, knowing how different search engines qualify sites by different measures."