BizJournals Portfolio

Obscene Losses

Hard Times Hard <em>Times</em>

A battle looms for the board of the New York Times Co. Could a slate of hedge fund directors force changes at the Gray Lady? See All Video & Multimedia

Fraud Scene Investigator Fraud Scene Investigator

People don't normally try to kill you for doing their taxes, but forensic accounting is a whole different ball game. Read More
PREV 4 of 7 NEXT

In other words, there’s something for everyone—and the sites are ridiculously easy to use. You don’t even have to log in to watch videos, much less pay. (You’re simply required to say you’re 18 or older.) And the sites can’t prevent users from uploading proprietary material produced by the major porn studios. All of which is why Hirsch and his counterparts in the Valley are at least as nervous as the Viacom executives who have filed a $1 billion copyright suit against Google, YouTube’s owner.

But for now at least, there’s no significant push to shut down the sites. Although producers in the Valley have largely resigned themselves to the fact that the copyright genie is out of the bottle, they’re putting user-generated sites on notice about former moneymaking features that are now posted for all to enjoy. A few major porn companies say they regularly monitor postings on PornoTube and YouPorn and email requests to take down copyrighted material. In July, Red Light District sent a cease-and-desist letter to YouPorn after a user posted “One Night in Paris,” the “official” full-length version of the Paris Hilton sex tape, which Red Light distributes. YouPorn removed the video.

By their very nature, though, user-generated sites might be vulnerable to other kinds of legal problems. If anonymous users post child pornography, it could be difficult for site owners to verify the ages of the performers. While these sites generally require viewers to confirm that they’re over 18, “my 11-year-old could go on at any point,” says Red Light’s Joseph. Earlier this fall, a German internet provider temporarily blocked access to YouPorn because the site didn’t comply with German age-verification laws. Up to now, U.S. user-generated porn sites have not been prosecuted.

There’s no sign on the door of PornoTube’s headquarters, in Charlotte, North Carolina. The building is concealed in a low-slung office park on the outskirts of the city, next to the railroad tracks and an aluminum factory.

Inside the air-freshened warren of bunkerlike offices, Suzann Knudsen, a PornoTube marketing executive who moonlights as a D.J. for sex-fetish parties, shows me around. She explains that despite PornoTube’s 15 million monthly visitors, the website’s parent company, Adult Entertainment Broadcast Network, views it as a marketing expense, not a profit center. The site was originally conceived as a feature within Xpeeps.com, A.E.B.N.’s X-rated social-networking site, to provide a way for members to trade sex videos. But soon after it launched, in July 2006, PornoTube had dwarfed Xpeeps’ traffic, and A.E.B.N. decided to turn it into a separate site. The company has tried to monetize it by striking profit-sharing deals with two dozen porn studios to create promotional channels that funnel traffic toward the studios’ own sites. A.E.B.N. won’t disclose the value of these agreements or the small amount of advertising revenue generated by the ads placed on page margins, saying only that PornoTube breaks even. It’s worth it, Knudsen says, for the traffic.

But when traffic means tens of millions of people sharing porn, there are some unique business challenges. Daphne Reeder, a customer-service rep for PornoTube, spends her days trolling the site, investigating clips that have been reported as problematic. On the July morning when I visit, she had more than 500 videos to review, most of which had been red-flagged because their descriptions included words such as little boys, force, or rape. She says the community polices itself, with users and porn companies emailing to alert the site about child pornography, copyrights being violated, ex-boyfriends uploading once-private videos, and other issues.

Adult-video producers are legally required to verify that performers are of legal age. The 2257’s, as the verifications are known (after the corresponding section of the federal code), are a costly hassle to the porn studios. Vivid, for example, has an employee whose sole responsibility is 2257 compliance, and Vivid makes only 60 films a year. Reeder is one of 10 people working on compliance at PornoTube, which has about 210,000 videos. Every clip on the site is supposed to contain a link to “2257 info” documenting the age and identity of the performers, but many of the clips (mostly the genuine amateur videos) include no such information. In these cases, PornoTube attempts to perform its own verification. If it can’t, the clip is removed.

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

Connect With Portfolio.com

Come on, like us—you know you want to.

Follow us and if you're an innovative entrepreneur, we'll return the favor.

Today's top stories, conversation starters, and the back nine business bites.

spotlight on

People & Ideas

Whisky To-Go-Go

Now there's a company that let's you taste your knowledge of fine blended Scotches by mixing a whisky of your own. Read More