X-rated And On The A-List

It's not uncommon for business principles to clash with social mores. The solutions usually sprout from compromise on both sides: Anheuser-Busch Cos. Inc. may continue to sell beer, but must comply with regulations on distribution and sales; Ford Motor Co. may continue to make cars, but must develop methods of reducing emissions. When it comes, however, to the sex industry, which has been around since at least Biblical times, no one is ever happy with the solution. The battle over regulating adult entertainment plays out repeatedly in city council meetings as well as Congressional hearings. And as it has done with so many other things, the World Wide Web is dramatically changing the dynamics of this debate. What it might mean for manufacturers and other business people is a future that includes adult entertainment suppliers as legitimate customers, business partners, golfing mates, or even chamber of commerce committee members. There are signs that the Web is transforming the pornography industry from a maligned black sheep in the business world into a major player in the hottest new marketplace -- e-commerce. "The Internet has given us more legitimacy than print or video because we're there in the same place with everyone else," says Linda Jacobs, a former flesh-magazine editor who now teaches a continuing education class in New York on how to set up an online adult entertainment business. "On the Internet you can get straight [non-adult entertainment] and adult sites. It's like getting kosher and nonkosher at the market." Consider:

• The pornography industry made money on the Internet immediately and pioneered much of the technology now commonly used, such as Web video and audio. Even though they might not want to admit it, mainstream companies are already supplying this budding industry with the cutting-edge equipment and services it constantly demands. Estimates have put the number of adult sites at 28,000 with revenues somewhere between $150 million and $1 billion. There's much debate about the size of the online porn industry, but few dispute that it is profitable.
• High profit margins and ease of start-up are luring business people who previously haven't been associated with the business. Time magazine recently profiled Internet Video Group, a company that supplies such services as the live video Web site DoMeLive.com. The company was started by Scott Hirsch, who formerly worked in the contact-lens business. Hirsch is making loads of money, according to the article, and there is no shame on his face in a photograph of him -- white shirt, dark tie, Al Gore haircut -- surrounded by the scantily clad women he employs. In fact, he proudly points out that he supplies a "much healthier lifestyle" for the former exotic dancers.
• The Web removes many of the negatives associated with the business. Owning a strip club or adult book store means dealing with zoning issues, complaining neighbors, alcohol liabilities, etc. But all one needs for a virtual strip club is a room, some equipment, and someone willing to strip in front of a camera.
• The "look" of online adult entertainment is spreading on the Web. Recently, the company X-10 ran an ad campaign for a home-automation package that centered around the story of someone being on a date and not having to worry about home electronic maintenance. The banner ad, which appeared on straight news sites, included a head-and-shoulders photo of a pouty blonde with the printed message, "She's in the mood." Similarly, a recent banner ad for the movie The Mask of Zorro carried not a photo of well-known star Antonio Banderas, but of newcomer Catherine Zeta-Jones -- again, a head-and-shoulders shot cut off just above the breasts.

"They're copy-catting our graphics because our graphics are exciting," Jacobs says. "You might see the same type of graphic used for an adult site and then for something like diet pills." Ironically, technology's bounty to the pornography industry could also be a foil. Opening up new markets for legal adult entertainment also opens up opportunities for child pornography and other exploitation. Dutch authorities, still grappling with a string of child murders linked to a ring of pedophiles, have given up trying to track down all of the child pornography posted by a notorious pedophile who died recently. The Web sites with the pictures are based in the U.S., they say, and therefore out of their jurisdiction. Kirk Davidson, chair of the business department at Mount St. Mary's College of Maryland and author of Selling Sin: The Marketing of Socially Unacceptable Products (Quorum, 1996) says pornography's association with abuse makes it more unpalatable than other "sin" products such as alcohol. "Even those folks who are accepting of adult book stores and X-rated movies start getting upset when you start talking about children," he says. For this reason, Davidson believes online pornography will be "the hottest of the hot buttons" that will ultimately lead to online regulation. That regulation, however, probably won't eradicate online pornography or perhaps even harm its profits. Past court decisions have protected adult entertainment suppliers' right to do business. And this perhaps is the thing that may, more than anything else, make online pornography acceptable -- the technology-enabled potential to make more money than ever before. Davidson is more cautious. "Gambling, without any question, has gained legitimacy as casinos and state lotteries have spread," Davidson says. "Companies with squeaky-clean images have associated themselves with gambling. . . . But I have a hard time envisioning pornography gaining the same legitimacy. The social and religious objections run too deep. Whether the Internet alone is going to transform pornography into a socially acceptable industry, I don't know." Davidson agrees, though, that there are too many unknowns with the Web to be sure of anything, and that society's definition of what's acceptable has been altered in the past by technology, such as television. In one generation we went from watching Fred and Wilma Flintstone sleep in separate cartoon beds to seeing bare buttocks on NYPD Blue. "Inch by inch, body part by body part, what seems like pornography today may become mainstream tomorrow," he says. "And if that happens, technology will be a major factor."