In the first part of this two part series, I told you that I’ve been doing a lot of thinking about the online adult industry – where it’s been, where it is, and where it’s now headed – and an ongoing onslaught of legal perils is not the only hurdle aspiring Net porn mongers face these days as they struggle to find a silver lining in the growing storm clouds…
Got Money for A Lawyer and Accountant?
If you don’t have money for bail (and even if you do), you should at least find the means to put together a proper guidance team – professional businesspeople who can assist you with the planning and ongoing operation of your enterprise. Doing so might eliminate your need for bail money... In the real world, you would more than likely not obtain financing from a bank, nor likely close a store-front or shopping mall lease without such a support team; but in the wacky world of the Internet, even the most inexperienced 15 year old using his daddy’s AOL account and a dubious free host feels qualified to accept credit card payments for the purchase of porn. ‘Get Rich Quick’ – and why not? It beats working at McDonalds or digging ditches for a living!
But I digress, since the point of this particular part of my rant is the absolute need for proper capitalization. While it’s early to claim authoritative results (since the poll went up only yesterday), the answers from this week’s XBiz Webmaster Poll reveal that in response to my asking "Has An Attorney Reviewed Your Site?" seven out of ten of you claim "No - I Can't Afford That!" This response rate seems to be right on – even if it is frightening. While discussing the issue of undercapitalized adult Webmasters (or those oblivious to the very real dangers involved in this business) with renowned first amendment attorney Larry Walters from firstamendment.com a few days ago, he commented that "This is not the business to mess around with if the profits don’t justify the legal expenses." – and he’s absolutely correct!
This makes me wonder if legal expenses were something that you could afford if you had an accountant to help you handle your profits, losses, and tax structure, and a proper business and marketing plan to guide you along the way. But who am I kidding? Most noobs don’t even realize that traffic is the main ‘technical’ issue facing adult Webmasters – they’re too busy wondering "what niche converts best?" and "did you do that effect in Photoshop?" to worry about whether forming an LLC would have benefits over S-corporation status for their particular operation.
Have you ever heard the old saying "It takes money to make money…"? Well, if you’re not making any real money in the porn biz, it’s either because you haven’t invested any real money in to it, or you have not treated it like a real business – or both. If that’s ok to you, then realize that this is your ‘hobby’ and then the question of "is it really worth it?" becomes a simple comparative analysis between leisure time dalliances.
What About Enough for VISA and Acacia, Too?
OK, let’s say that you’ve found the capital to operate your business as a business, have a clear idea of what you want to accomplish, and how to go about doing it. It must be clear sailing ahead, right? Not necessarily! Sure, I’ve already told you about a few of the main expenses and obstacles, but the list of hurdles is nearly endless, and includes a few other challenges, such as your ability to accept credit card transactions, and the ongoing legal challenges in the patent enforcement arena made by companies such as Acacia.
The credit card issue is simple enough to solve: you pay VISA their due, and chalk it up to the cost of doing business. This is getting to be old ground that I’ve been treading on, but the bottom line is that if you can’t afford the fee, then you have no business in the pay site business. Howl all you want about your objections based on principal – all you’ll get from me is a "What principal is violated when a company wishes to charge for the use of its services?" This is capitalism, dude, not communism!
Still, lots of noobs disagree, and waste their energy switching from processor to processor, following the trail of "It won’t happen to us!" claims, and once you get setup and the ball rolling, sure enough, the e-mail arrives telling you that things have changed, VISA needs their fee, and if you leave, you can kiss all of your rebills goodbye! Use that wasted time and energy driving traffic to your site, and pay VISA from your profit.
A few more points for those who still think that VISA is being somehow ‘unfair’ – would YOU be comfortable in handing your credit card number and other personally identifiable information over the Internet to an unknown entity that isn’t healthy enough to be able to pay a reasonable $750 business fee? Now consider that some of these folks operate sponsor programs, and it’s easy to understand why you’re being shaved senseless and perhaps not paid at all. What are ya gonna do about it? Go bitch over at GFY and tell the world that VISA was responsible for putting your sponsor out of business? You need to make better choices than that.
The same type of issue arises with Acacia. Here’s a company that regardless of the yet to be determined legitimacy of their patent claim is vilified as being evil and unfair. Wake up folks, they are but the tip of the iceberg, and over the next year or two, you’ll be able to add other companies to the ‘household names’ list as they begin to enforce their intellectual property rights. Now you might think "Acacia is full of shit!" but unless you have a few million dollars to spend fighting them for a few years in a court room to prove it, then you better be getting your checkbook out to pay them – and everyone else who comes along asking for their fair share of the profits that you’ve made from their technologies. Profits, that without their innovation, you might never have made.
Anyway, the litany of expenses outlined here serves to make a fundamental point: the online adult industry is at a point where in order to profit, you need to treat your business as a business, and accept the fact that there is a never ending, and ever growing, cost of doing business. A constant ‘nickel and diming’ that eats away at profits, deteriorating your bottom line, and fueling the question: "Is Porn Worth It?" There IS an ugly side to this biz, and your ability to handle it is a serious concern that needs careful thought.
Opening Up A Whole Can of Worms
There’s more to consider than the financial issues, however. There are the myriad emotional factors, what I like to call Personal Porn Issues. My lovely wife Dawn has written many articles on these issues, and there’s been lots of discussion about "What do you tell your family" – but the concerns go well beyond that.
Being in this business means unforeseen repercussions; some easy to deal with, others not so. It is easy to imagine the horror of a father or unsuspecting husband when he sees a video of his daughter or new wife sucking three stranger’s cocks while she rams a dildo in her ass, and the emotional pain this can cause is what the anti-porn folks call "The harmful affects of porn on the family." There IS an ugly side to this biz, and your ability to handle it is a serious concern that needs careful thought.
There are other ‘personal’ factors that can rear their ugly heads when you least expect them. For example, just yesterday, I received an email from my ‘ex.’ I hadn’t really heard from her since I ran off with Dawn aka Ayrora in 2001 and started a new life. It seems that she is about to re-launch our old Web site, but there’s a problem… Several years ago, I had been featured in an interview over at YNOT where among other things I discussed the fact that I was a partner in a company doing direct-container jewelry, furniture, and handicraft imports from Indonesia. While that was the case then, it is not the case now – yet searching Google / Yahoo! for her company name delivers my YNOT interview among the results, and that’s NOT the type of exposure that "a good Christian girl" wants for her business! So now I’m expected to have Google and Yahoo! change their listings to drop that reference…
The moral of that story is even if your involvement in the industry is ‘innocent’ enough, you are opening the door for unforeseen complications, even years down the road when you are no longer a part of the biz.
So now we come to the end of my rant. I’m not sure I said what I wanted, or needed to, but I think the message is clear enough: things have changed, and this IS a business that now demands to be taken as such, or you’ll find yourself sitting broke by the wayside – or rotting in prison. So is there no hope? There’s always hope – especially if you don’t worry about having missed the party. Opportunities still abound, but they are not what (or where) you might think they are. If you have a unique idea, product or service, with a distinct competitive advantage in an underserved niche, the capital to bring it to market and sustain its operation, and a clearly defined plan and set of goals then go for it! You will indeed find profits equal to your desires.
But will it really be ‘worth it?’ Only YOU can say! Stay flexible! ~ Stephen
