Adult Entertainment on the Cutting Tech Edge

AGAIN, we are at the cutting edge of the zeitgeist – USA Today notes that the “adult” entertainment industry often leads the way in technology:

Online pornographers have been among the first to exploit new technology for more than a decade – from video-streaming and fee-based subscriptions to pop-up ads and electronic billing. Their bold experimentation has helped make porn one of the most profitable online industries, and their ideas are staples at Fortune 500 companies.

As cyberporn pioneers venture into new fields, such as wireless services, digital-rights management and geo-location software, their peers in other businesses are taking notes again.

Porn’s recent tech tinkering could have sweeping implications for the music and movie industries, which are trying to protect digital content from being stolen and traded. Each day, millions of video clips and photos are filched from for-pay porn sites and traded, forcing the red-light districts of cyberspace to find novel ways to protect digital content.

The adult industry’s use of technology already reshaped how Internet behemoths Yahoo and Microsoft MSN do business. Both rely heavily on fee-based subscriptions and prominently feature video-streaming technology.Amazon.com has effectively used affiliate-marketing campaigns – posting free content on 900,000 smaller sites – to attract millions of consumers to its site. Pop-up ads are seemingly everywhere on the Net.

Technology has paid off handsomely for porn sites in the USA. Led by sites like Danni’s Hard Drive and Cybererotica, they generated $2 billion in revenue last year, up 10% to 15% from 2002, says Adult Video News, a trade magazine. That’s about 10% of the overall domestic porn market. The number of porn sites has vaulted eighteenfold, to 1.3 million, since 1998, says the National Research Council.

It will likely grow as more Americans get high-speed Internet connections. About 35 million people visited porn sites in December – or one in four Internet users in the USA, says Nielsen/NetRatings.

….”Where there’s sex and tech, there are sales,” says Eric White, CEO of Virtual Reality Innovations, a profitable maker of cybersex toys.

Some established companies have quietly dabbled in porn for years. Comcast, the nation’s largest cable company and Disney suitor, is one of the most far-reaching distributors of porn. Like other cable and satellite companies, it pipes adult films into pay-per-view TV services. But, like others, it doesn’t break out revenue from adult programming in its financial reports.

….What non-porn consumers can expect in the next year or two from new technology inspired by porn innovators: sports and music videos sent to cell phones at a low cost. Content and ads delivered to PCs and wireless devices based on where you live and your particular tastes.

Some of the new technology:

-Digital-rights management software. Like the music and film industries, the adult-entertainment industry has grappled with digital piracy.

Playa Solutions, the company started by former movie producer Tucker, has developed software that wraps digital content in a high-tech force field of sorts. When the user presses play on a video clip, for instance, a computer system that controls the content is electronically notified. The system asks for a payment or lets viewers see the clip if they agree to watch ads. The process has tested successfully in the adult industry and has drawn interest from music and movie companies, Tucker says.

-Video-on-demand billing. Vivid Entertainment Group, one of the world’s largest adult-film producers, is conjuring up electronic-billing systems that would let consumers download and record on CDs chunks of content. Consumers would be charged by the minute. If the idea catches on, media companies could offer classic film scenes, music videos and TV shows for a fee online.

-Wireless services. XTCMobile.com transmits porn video-clips of two to four minutes to cell phones. It also supplies “groan” and “moan” ring tones. Provocative content is just another way to personalize cell phones that already come with digital cameras, video games and Web browsers, XTCMobile CEO Jchris Morrison says.

XTCMobile is working with phone carriers to include child-protection features. Several media companies have expressed interest in the technology.”The perfect markets will be sports, music and sex – in that order,” Morrison says.

-Geo-location software. Porn and gambling sites are among the leading users of the software, which helps Web sites identify the city where a person logs on. That lets them target Internet promotions to specific consumers in specific regions.

Let us not besmirch our lustily entrepreneural friends, who work more quickly and are much more willing to take risks than mainstream industry. We tip our … hats, or something.