At your convenience

At your convenience

The credit card and the internet changed the way people access adult entertainment.

Business, says the strapline, is a lot like sex; getting in is easy, pulling out is harder. And when that business is internet porn, trouble can easily spiral out of control.

"When two men invented a way to sell adult entertainment over the internet, they had absolutely no idea of what they'd started," says veteran Hollywood director George Gallo. "They began in 1996 - and look, just 13 years later, at what a massive industry selling, buying and viewing pornography over the internet is now."

Indeed, annual spending on internet porn is now more than US$97 billion, according to research by Stanford University, and is thought to easily dwarf any other single source of revenue on the net.

With an annual reported growth rate of 40 per cent, apart from last year as a result of the global financial crisis, porn is still far and away the No.1 subject of internet searches.

More than 40 million US adults regularly visit internet porn sites, new adult videos are being created in the US every 39 minutes, and the pornography industry's revenue is larger than that of all the top technology companies combined, including Microsoft, Google, Amazon, eBay, Yahoo!, Apple, Netflix and EarthLink.

Australia's hardly the image of moral sobriety, either. Today, Australians are ranked fifth in the countries accessing internet porn - behind China, South Korea, Japan and the US - spending $US97.80 per person annually.

"It is quite incredible," says Chris Mallick, who had a role in helping invent a way to sell adult entertainment over the internet and whose life story has just been made into a movie, Middle Men, that he also produced. "That first software program to let people use a credit card online changed the world in a moment."

While that invention finally allowed people to make money through the net and created a multibillion-dollar online sex industry, it also opened the door for other companies to flourish.

Exact figures and sector shares of the market are impossible to gauge since none is collected and many adult sites are controlled by holding companies that deliberately make it hard to track them. As well, so much traffic flies under the radar, although there are always glimpses of the potential riches.

A recent US court battle over the domain name, for instance, revealed that a cybersquatter made $US40 million in profit from the site over a five-year period. The judge said it was worth $US65 million.

But after sex, the next biggest earners are widely believed to be in roughly the order of popularity of Google searches. Health and medical lead the field, travel comes a close second, individual shopping has grown exponentially over the past 10 years, followed by news and media, entertainment and business and finance.

Yet, in many ways, it's easier to make money from porn over the internet than any other business because of the privacy and discretion of the services, says cyber pornography expert Frederick Lane. Customers are more tolerant of being led on to other sites, and seeing pop-up ads, while porn site ads are only kept up if they make money immediately by users clicking on them. Porn sites usually co-operate with rivals, sharing traffic between different specialisms, rather than directly competing.

On the downside, piracy is now eating into profits, there's a lot more free, user-generated porn online and many more e-commerce sites are being set up each day, creating a much fiercer competitive environment. The difficulties led the industry veteran, American sex magazine publisher and video producer Larry Flynt, to approach the US government for a $US5 million bail-out - but only in jest.

"But it has now become an extremely sophisticated operation," Mallick says. "Before you were able to use credit cards online, no one could work out how you could make money from porn on the internet. You could show a photo, but how are you going to get revenue from that? You could sell videos and have people post cheques but that was too hard.

"But then allowing credit cards to buy over the internet began a complete revolution in the way business - any and all business - could be done remotely."

The comedy-drama movie Middle Men, which previewed to the market at this year's Cannes Film Festival, tells the true story of those wild beginnings of online-paid-for porn.

Starring Luke Wilson, Giovanni Ribisi, Kevin Pollak, James Caan and Kelsey Grammer, it's the tale of two losers, sacked from their IT jobs, who decide there must be a way of getting people to pay for porn on the internet. When the money starts flooding in, they hire a suburban accountant - Mallick, played by Wilson - to help manage their burgeoning finances.

"It becomes completely crazy," Pollak says. "They're making money hand-over-fist in those early days, and it's a wild, wild ride. It makes for a great drama. They get entangled with porn stars, the FBI, the Russian mob and nothing's ever the same again.

"The director, George Gallo, and I have worked together once before, and have been friends for a long time. When I saw the script, I thought I'd never before seen anything written so entertaining and powerful. It reminded me of how I felt when I first read my script for The Usual Suspects. It felt like lightning in a bottle. With this film, as with the subject matter, it felt as though we were standing on a precipice.

"Gallo, best known for classics Midnight Run, Wise Guys and Bad Boys, was similarly enthusiastic. "I just loved the subject matter and felt it was an important film, looking at the beginning of what was to become a huge industry," he says. "But it also has so much drama and conflict, sex, drugs and corruption. What more could you ask for?"

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