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The Adull Online Entertainment Industry While far from the only source of sexually explicit materials on the Internet, an important driver of public concerns about the access of chil- dren to pornography on the Internet is the online component of the adult entertainment industry (hereafter the adult online industry). Indeed, many of the canonical examples of exposure to pornography point to commercial sites as prominent purveyors of such material that minors can reach and see, and to a considerable extent, the fact that children can come across such material (with or without a deliberate choice on their part) results from the existence of an industry that caters to adult demand for such material. Material available online from these sources (and other non-commercial sources as well) includes images of heterosexual and homosexual intercourse (including penetration), fellatio, cunnilingus, masturbation, bestiality, sadomasochism, bondage, rape, incest, and so on.1 For this reason, it is helpful to describe certain important character- istics of this industry. 1Legitimate online adult entertainment businesses are not generally providers of child pornography. However, one firm in the adult online industry that provided access to a range of sexually explicit materials was indicted and convicted on child pornography charges. See Lenny Savino, 2001, "Kid Porn Web Sites Lead to 100 Arrests: Investigation Targets Biggest Such Business Found in U.S.," Detroit Free Press, August 9, available online at . In addition, some adult en- tertainment Web sites do cater to viewers wishing to see young women in sexual poses (e.g., through advertising and site copy that promises "hot teens" and "young girls"), and because such content by assumption depicts young women in sexual poses, it is unclear from the images alone whether the young women depicted are in fact over 18 as required by law and merely look like they are younger, or if they are in fact underage. 71

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72 YOUTH, PORNOGRAPHY, AND THE INTERNET 3.1 THE STRUCTURE AND SCALE OF THE ONLINE ADULT ENTERTAINMENT INDUSTRY The adult online industry in the United States generates approximately $1 billion in revenues annually,2 and some in Me industry expect this figure to grow to $5 billion to $7 billion over the next 5 years, barring unforeseen change. As We rest of this chapter discusses, revenues can come from a number of sources: paid subscriptions to We site, advertisements carried on We site, sending traffic to over sites, sale of sex-related products, and providing auxiliary services such as adult content search engines, content for over adult Web site operators, or age verification services. For pur- poses of this report, the term "commercial sources" should be understood to mean sites that charge a fee for access and sites that provide access to content for free but are supported by advertising revenues. According to the best information available to the committee, sub- scription sites with adult content exceed 100,000 in the United States (with each site having multiple Web pages underneath it), and about 400,000 for-pay adult sites globally. The business entities responsible for these U.S. sites include about 1,000 U.S. firms operating as genuine business enterprises, with perhaps another 9,000 or so operating as (usually small- scale) affiliates of other established online adult entertainment firms.3 Compared to the totality of content on the public World Wide Web, adult-oriented sites account for a relatively small fraction (about 1.5 per- cent).4 However, these sites account for a significant amount of Web traffic. According to industry statistics, approximately 70 million differ- ent individuals per week view at least one adult Web site on a global basis 20 million view adult pages that are apparently hosted on sites in 2The total size of the adult entertainment industry is not well known, and estimates range from $4 billion to $10 billion. See Frank Rich, 2001, "Naked Capitalists: There's No Business Like Porn Business," The New York Times Magazine, May 20; Emmanuelle Richard, 2001, "The Perils of Covering Porn," Online Journalism Review, July 10, available online at ; and Dan Ackman, "How Big Is Porn?," Forbes.com, available online at . 3Numbers provided by Bill Johnson, director of marketing, Flying Crocodile Inc., inter- view, January 2001. An "affiliate" can be a separate business entity or can have an em- ployee or consultant relationship to the primary firm. 4The first work in this area known to the committee is that of Steve Lawrence and C. Lee Giles, 1999, "Accessibility and Distribution of Information on the Web," Nature 400~6740~: 107-109, July 8. (In fact, the Lawrence and Giles result of 1.5 percent holds for the number of servers found to be "pornographic" in nature. The statement in the text that adult-oriented sites are 1.5 percent of all sites is based on an assumption that on average, a server supports the same number of sites regardless of its content. This assumption is likely to be wrong in detail, but probably holds on average.) The results for sexually explicit information were substantially reproduced in Daniel Orr and Josephine Ferrigno-Stack, 2001, "Childproofing on the World Wide Web: A Survey of Adult Webservers," Jurimetrics 41~4, Summer): 465475.

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THE ADULT ONLINE ENTERTAINMENT INDUSTRY 73 the United States or Canada. The number of paying subscribers is on the order of several million in the United States, and may be as high as 10 million. The majority of these viewers and subscribers are male,5 though the fraction of female viewers may be growing. On average, a paid sub- scription generates $20 to $40 per month in revenue. The majority of subscribers cancel within a month, but of those who remain after a month, the typical retention time is approximately 3 to 4 months. A profitable adult online business is often difficult to sustain over the long run, despite the high demand. The cost of entry into the business is relatively low, and the availability of a range of services from content pro- vision to free Web site hosting and credit card transaction processing makes it easy to set up an adult Web site. However, because the market is highly saturated (i.e., for a Web site with any given sexual theme, there are likely to be a large number of competitors), and subscription prices more or less capped in price, the business is one with low margins.6 Thus, profitable enterprises depend in large measure on drawing large volumes of traffic (in industry jargon, "eyeballs") in the hope of converting some of this traffic into revenue (i.e., customers paying for subscriptions). (Box 3.1 summa- rizes the primary methods used to increase traffic to one's Web site.) For large firms in the adult online industry, the cost of bandwidth is a major element in their cost structure. Because its products are graphics- intensive, the adult online industry consumes enormous amounts of band- width and the two largest individual buyers of bandwidth in the United States are firms in the adult online industry. However, it is also true that most bandwidth is used by viewers of these sites who do not pay for their use of these sites, because non-paying individuals can see large amounts of sexually explicit material simply by looking at the home pages of these sites, their free "teaser" pages, and their free demos. The structure of the industry involves a relatively small number of large firms and a much larger number of smaller ones. The major firms (numbering 100 to 200) generate revenue from subscriptions and from providing content to other, smaller businesses. To increase traffic flow, these large firms also pay for traffic that is forwarded to them by other, smaller businesses. These other smaller businesses also receive content from these large firms to display on their own sites. The majority of adult Web pages have adult content that draws customers who can then be referred to another site (where they will encounter subscription offers). 5Alvin cooper et aL 1999. '~Sexuality on the Internet: From Sexual Exploration to Patho- logical Expression,,, Professional Psychology: Research and Practice 30~2, Aprily: 154-164. Tome in the adult industry have also argued that credit card fraud has forced many adult merchants to pay much higher credit card processing fees, thereby significantly re- ducing profit margins.

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74 YOUTH, PORNOGRAPHY, AND THE INTERNET 3.2 THE GENERATION OF REVENUE Revenue in the online adult entertainment business, as in other busi- nesses both online and offline, results from the sale of products or ser- vices (including subscriptions) or advertising. The largest amounts of revenue are obtained from the end-user customer, who typically uses a credit card to subscribe to a site. As a subscriber, he obtains unlimited access, though the average subscriber only uses the subscription 1.5 times per month (one viewing session typically involves seeing around 75 to 100 pages). The above models for revenue generation distinguish between adults and children on the basis of the ability to produce a credit card adults, but not children, are presumed to be the legitimate owners of the credit card used. This assumption is not valid under all circumstances, but does not appear to be an unreasonable approach. However, home pages that serve as billboards for the sites' contents and the generation of revenue

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THE ADULT ONLINE ENTERTAINMENT INDUSTRY 75 through the sale of advertising generally make no such attempt to differ- entiate between adults and children. A Web site owner can also obtain revenue from advertisers. Adver- tisers can choose to simply pay for their ad to be displayed or pay each time a person clicks on their ad. When the ad is displayed the typical advertiser might pay the Web site owner (e.g., $3 per 1,000 displays of the ad a CPM (cost per mille [thousand]) model). When the advertiser pays for the volume of referrals that the Web site sends to the advertiser (e.g., $0.05 for every user who clicks on the ad displayed and is then transferred to the advertiser's site), it is a CPC (cost per click) model. When the advertiser pays only if and when it gains a new subscriber as a result of the Web site's referrals to the advertiser (e.g., half of the first month's revenue for every subscription that results), it is a CPA (cost per acquisi- tion) model. By contrast, the revenue model for traditional media adver- tising is most similar to the CPM model, because traditional media cannot track results from advertising to the same degree of precision that is pos- sible on the Web. A related service is providing consumer Internet traffic to another adult Web site in return for a small per-consumer fee. Such "traffic forwarding" is similar to the fees paid through CPC traffic referrals, except that the consumer is forwarded involuntarily (i.e., without an affirmative choice to be forwarded). This practice is known as "mouse/rapping" (or "selling exit traffic" in the industry), and a mousetrapped user who tries to leave a sexually explicit site is automatically forwarded to another such site. This other site may be operated by a different operator, but that fact is irrelevant to the user who just wants to get out.7 (Technically, mousetrapping refers to a process enabled by lavaScript (a scripting language for Internet brows- ers) in which the closing of one window automatically directs the user to another Web page. The second Web page can do the same, so that attempt- ing to exit the second page spawns a third gage and so on.8) 1 by, 7Mousetrapping is a practice that often results in user panic, especially when the user is a child. Because the computer is for practical purposes to a non-expert disabled, the only solution available to the non-expert is often rebooting or pulling the plug, which can result in a loss of work and always costs time. 8Note that the technology underlying mousetrapping can have entirely legitimate pur- poses. For example, when a user leaves an e-shopping site, a questionnaire may appear that asks the user for feedback about his or her shopping experience. But in this instance, the user can leave the questionnaire with a single click. The problem with mousetrapping arises when many sites are mousetrapped in succession, so that the user is caught in a virtually endless sequence of new but undesired and unrequested pages and is forced to view each of them. Moreover, if all of these sites are operated by different parties, any regulatory action taken must be taken against each of the parties directing them to cease such practices simultaneously.

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76 YOUTH, PORNOGRAPHY, AND THE INTERNET All of these payment schedules can be (and usually are) adjusted on the basis of the value of the user to the advertiser. For example, if the traffic sent to the advertiser is highly qualified (i.e., has a higher tendency to subscribe), the payment rate per ad-click might be $0.20 instead of $0.05. If the customer who subscribes to the advertiser's Web site stays more than 2 months, the Web site owner might receive a bonus of an additional 25 percent of the first month's revenue. As a general rule, traffic with a higher proportion of children has less value to the advertiser, because the vast majority of children are unable to pay for subscriptions. So, advertisers have little incentive to attract chil- dren to their sites from the standpoint of obtaining paying customers. However, the incentives are different for the Web site owners who dis- play ads. A Web site owner operating on a CPA model indeed has no particular incentive to send children to its advertisers. But a Web site owner operating on a CPM or CPC model is in a different situation. A display of an ad to a child counts in just the same way as its display to an adult, and the click of a child on an ad that transfers him to the advertiser's site counts in just the same way as an adult's click. Thus, a Web site owner operating on CPM or CPC models (which constitute the large ma- jority of adult Web site owners) has few incentives to refrain from differ- entiating between adults and children.9 This is not to say that this is the only incentive operating. Because the Web site owner must negotiate a contract with the advertiser, who is very aware of the value of the traffic incoming from that site, the Web site owner must realize that the advertiser will offer lower commissions if the traffic being referred has low value. Thus, the Web site owner has incen- tives at the margin to refrain from distinguishing between children and adults, but also significant incentives to refrain from too high an overall percentage of children in the referred traffic. Revenues from selling traffic to advertisers can be significant, espe- cially if one uses some of the questionable means described in Box 3.1. For example, one firm employing some of these means allegedly earned between $800,000 and $1 million annually from selling traffic to advertis- ers whose ads were included on its Web sites.l Subscriber retention is extremely difficult for these pay sites without a constant supply of fresh content that they must produce themselves or 9In principle, sponsors of "affiliate" programs bear the responsibility for policing affili- ates that behave in an over-aggressive manner and promote their affiliate Web sites through the use of spam or other improper methods. In practice, some sponsors take this responsi- bility more seriously than others, and sanctions for improper promotion can range from non-existent to revocation of the affiliate relationship and withholding of payments that would otherwise be received for traffic. 10See .

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THE ADULT ONLINE ENTERTAINMENT INDUSTRY 77 license from providers. Even then, because sites have designs, styles, themes, and tastes that eventually become tiresome to the member, a high percentage of members leave after the first month, and even more leave after the first few months. But these customers don't give up on adult content. Effectively, they simply transfer their membership by canceling with one site and signing up at another until they become bored and move on again. Additionally, given increasing saturation of the market, margins have been shrinking dramatically for adult Internet businesses. For these reasons, the top sites are dependent on new subscribers far more than they are on recurring revenues from short-term existing members. Five other business models based on providing services to the primary providers of adult-oriented sexually explicit material are worth noting: Counters are free services that offer businesses performance statis- tics, click paths and behaviors, browser technology data, and demograph- ics on the visitors to individual sites. In exchange for the service, the site places on its pages an advertisement for the vendor's company, allowing visitors to click and visit the vendor's portal.ll From there, the visitor may visit any site using the service, by selecting a link from the directory. The vendor makes money by selling advertising on the portal, and also by selling a portion of the incoming traffic to other adult companies. Indexing services provide end users with a map or index to the adult Web and receive revenue for forwarding traffic to these sites. For ex- ample, Flying Crocodile Inc. (FCI) provides both counters and indexing services. FCI generates more than 150 million impressions tracked per day by FCI. Approximately 20 percent of the large firms have advertising contracts with FCI at any one time. FCI's gross annual revenues are between $12 million and $15 million, and 60 million unique people per week visit the 70,000 sites (global) that contract with FCI. Third-party billing processors offer their services to adult Internet companies that may or may not have merchant accounts. Third-party billing also avoids potential embarrassment for users who wish to sub- scribe with some degree of privacy (since the name of the billing party rather than the adult Web site operator appears on the credit-card bill). These services manage the secure transaction processes, transfers of funds, debits, charges, telephone billing, and all associated record keeping for a per-transaction fee that is deducted from the revenues credited to the pay site owner. 1lA portal is a "home base" from which a user may access a variety of content and services that the portal provides. Content may include sports scores, financial news, and headlines; services may include search engines, e-mail, and message boards.

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78 YOUTH, PORNOGRAPHY, AND THE INTERNET Adult verification services (AVSs) provide certification to adult Web site operators that an individual is an adult. As Chapter 4 discusses in greater detail, a user can provide a credit card number to an AVS (posses- sion of a credit card is regarded as proof of adulthood). In return, he or she receives a special access code that can prove adulthood to all Web sites that use that particular AVS. Often AVSs are used by "free" adult Web sites, which receive a portion of the revenue generated by the AVS required for entry to those sites. Content provision services provide sexually explicit content to Web site operators that cannot produce their own content. Such content in- cludes still images, videos, live sex chats, interactive videocamera sex shows, and so on. 3.3 PRACTICES RELATED TO MINORS According to Nielsen/NetRatings, nearly 16 percent of the visitors to adult-oriented Web sites in February 2002 were under the age of 18.12 One source in the adult industry asserted that traffic sent to some adult sites is 20 to 30 percent children.l3 These sites are usually sites that are intended to be broadly appealing to a wide variety of tastes (rather than those serving more specialized tastes). Even using current AVSs, adult sites receive traffic that is 5 percent children. That said, advances in AVSs and better screening may enable the industry to achieve traffic that is no more than 2 percent children.l4 In addition, sites offering highly special- ized, niche products tend to have higher rates of traffic that ultimately purchases subscriptions (and hence lower fractions of children). In a survey of adult-oriented commercial sites, the majority of adult- oriented sites (about 74 percent) were found to display adult content on the first page (accessible to anyone who visits the page), often through the display of sexually explicit banner ads to other sites. Nearly two thirds (66 percent) did not include a notice indicating the adult nature of the site, and only 11 percent included such a notice and also did not have adult content on the first page. About 25 percent employed practices that hin- 12Nielsen/NetRatings, February 2002. Nielsen/NetRatings provides Internet audience measurement data and analysis by monitoring actual click-by-click Internet user behavior through a real-time meter installed on the computers of more than 225,000 individuals in 29 countries worldwide. The meter is installed with the permission of the homeowner to record the relevant activities of users and includes an automated login to identify who the user is at specific times. Because the family specifies the ages of household users, the Web sites visited need not determine if the visitor is an adult or a child, a task whose difficulty is addressed in Chapter 2. Bill Johnson, FCI, 2001. Bill Johnson, FCI, 2001.

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THE ADULT ONLINE ENTERTAINMENT INDUSTRY 79 dered the user from leaving the site (e.g., mouse/rapping), and only 3 percent required a credit card or other "adult check" to proceed past the first page of the site (that is, most sites allow the user to take a "free preview" in which some additional content is provided).l5 3.4 WHAT THE FUTURE MAY HOLD 3.4.1 The Structural Evolution of the Industry A commonly occurring development path in many industries is one of innovation, followed by imitation, and then by shakeout.l6 In the innovation phase, one or a few parties find new ways to profit from innovation they provide a previously unavailable product or service for which there is demand at prices that are sufficient to earn a profit. In the imitation phase, a host of other parties copy (perhaps with small variants) the ideas that enabled the first innovators to succeed. Imitation and the creation of "copycat" enterprises continue until the market is saturated and cannot support additional entries into the market. Shakeout is the result, in which a large number of firms (which may be the first innova- tors or the copycats) give up the business and others consolidate, result- ing in a much smaller number of firms each with larger shares of the market. These larger firms are seriously in the business and are likely to adapt to new business circumstances (e.g., markets, regulatory environ- ment) rather than to leave the business. Since perhaps the mid-199Os (when the World Wide Web began to grow at a rapid rate), the proliferation of adult Web sites suggests that the adult online industry has been in an imitation phase. If the industry continues on the trajectory described above, a shakeout in the industry is likely to occur in the future. If so, the remaining firms are likely to dem- onstrate a higher degree of corporate responsibility and that responsi- bility may well include more serious attempts at differentiating children from adults in giving access to their products and services. 3.4.2 Increased Regulation What might a more "responsible" adult online industry involve? The following sketch is derived from conversations with representatives from businesses that are likely to become the more established responsible 15Daniel Orr and Josephine Ferrigno-Stack. 2001. "Childproofing on the World Wide Web: A Survey of Adult Webservers," Jurimetrics 41~4, Summer): 465475. 16See, for example, F.M. Scherer and David Ross, 1990, Industrial Market Structure and Economic Performance, Houghton Mifflin, Boston, Mass.

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80 YOUTH, PORNOGRAPHY, AND THE INTERNET citizens described above. Enterprises in this more responsible regime will not use stolen or illegal content, will refrain from the use of fraudulent and deceptive trade practices, will have effective means for preventing fraudulent use of credit cards, and will promote widespread use of AVS systems that prevent minors from being able to view sexually explicit "teaser" images. Noting that all schemes for protection of minors involve a trade-off between the need to inform a potential consumer of the con- tent that is being offered against the risk of exposing minors to overly explicit material, home pages (i.e., the page accessible to users without going through an adult verification check) could contain textual descrip- tions only or some pictorial content that is obscured in the way that the cover of an adult magazine is obscured when displayed on the news- stand. Such magazine covers may contain suggestive images, but opaque plastic masks essentially everything except the head/face of the cover models. Such obscuration is much more complete than the token blurring that occurs on many adult Web sites covering just the genitals, but never- theless providing a sense of what is inside. Furthermore, while greater regulation may not be desirable from the standpoint of the industry, re- sponsible firms in the adult online industry appear to be willing to shoul- der some regulatory burden as part of the cost of doing business to keep minors away from their services. One potentially important development in the industry occurred in October 2000, when the Federal Trade Commission took action against seven major firms in the industry for unfair and deceptive trade practices (discussed in Chapter 4~. A second occurred in October 2001 in which it took action against a party that used misspellings of common Web sites not oriented to adult entertainment to draw traffic and that engaged in "mouse/rapping" of users.~7 A third occurred in November 2001, in which a number of adult entertainment firms on the Internet paid $30 million in fines in response to FTC charges that they illegally billed thousands of consumers for services that were advertised as "free" and billed other consumers who never visited the Web sites at all. In addition, the settle- ment bars the illegal practices in the future and requires that the defen- dants post a bond before they are allowed to continue to market adult entertainment on the Internet.~8 The long-term meaning of such actions for the industry is as yet unclear, but coupled with a new administration, it may suggest that the adult industry will be feeling increased pressure in the future. Such pressures may also include increased prosecutory efforts under obscenity statutes. resee . resee .

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THE ADULT ONLINE ENTERTAINMENT INDUSTRY 81 There are many paths toward a more responsible industry. One in- volves, of course, law and regulation that prohibit or mandate certain kinds of behavior. However, since explicit regulation is often quite oner- ous, businesses in an industry that is subject to regulation may have strong incentives to self-regulate that is, to adopt codes of behavior to ward off the threat of explicit regulation.~9 Whether self-regulation will character- ize the path of the adult online industry remains to be seen, but it is likely to depend on the occurrence of a shakeout that leads to substantial con- solidation in the industry and trade groups with influence over a suffi- ciently large number of individual firms in the business. 3.4.3 Future Products and Services Today, the vast majority of online adult content consists of still im- ages. The future will bring a greater emphasis on movie content and on streaming, live video content as high-speed Internet connections become generally available to consumers outside the workplace. In 2000, interac- tive content with live "tour guides" (i.e., a live narrator) was a business model that was being investigated in partnership by Live Entertainment Group and Flynt Digital Media. In addition, a greater degree of niche marketing is to be expected (as discussed below in Section 3.5~. And, given the increasing popularity of computer-generated imagery of near- photographic quality, a mix of real and synthetic images may become more common in the future. Content for transmittal to devices other than computers will become more common as well. For example, Playboy will soon begin to offer images for display on personal digital assistants (e.g., Palm Pilots).20 Haptic (touch-sensitive) content is not yet, and may not be, a product pursued by the industry. However, a variety of companies manufacture products that are intended to provide a tactile counterpart to the visual sexual experience. These products are connected to a computer interface that controls the location, relative force, and degree of stimulation. Ac- tions are initiated by a human being at some other location, by the user clicking on certain sections of a Web page, or even a digitally presented movie. The products include devices that are intended to stimulate a user's genitalia, realistic life-size dolls with computer-driven actuators in For a discussion of self-regulation within a broader statutory framework, see Computer Science and Telecommunications Board, National Research Council, 2001, Global Networks and Local Values, National Academy Press, Washington, D.C. 20See .

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82 YOUTH, PORNOGRAPHY, AND THE INTERNET certain locations, and body suits capable of electronically stimulating a user's erogenous zones.21 Whether or not haptic content will become widely available in the near future is unclear, and a number of technological and economic barri- ers stand in the way; these barriers include technological complexity, lag times in haptic interactions, the difficulty of plausible haptic rendering of even simple sensations, and the daunting economics today of producing large numbers of small actuators. 3.5 INDUSTRY STRUCTURE, PRODUCT DIFFERENTIATION, AND AGGRESSIVE PROMOTION According to testimony from representatives of the adult online in- dustry, minors are not a focus of their marketing efforts. Indeed, they reported that because minors for the most part cannot purchase subscrip- tions, targeting minors would make no economic sense for them (and indeed would be a waste of resources). Nevertheless, in a saturated market with many firms, there are strong incentives for firms to be increasingly aggressive in their marketing ef- forts (absent any counter-pressures). Thus, while the adult industry may not go out of its way to target minors, an aggressive marketing campaign on the Internet that seeks to exclude minors will be more expensive than one that is fully inclusive, and hence much of the adult industry does not make any particular effort to exclude minors from receiving or accessing its promotional materials, and exposing some children to its materials is an inevitable byproduct of its business practices. A firm that did make special efforts to exclude minors would place itself at a financial disad- vantage because of the extra expense involved. It would also limit its adult audience to a greater degree than a firm that did not make such efforts, because any attempt to exclude minors would inevitably exclude some adults as well. Such considerations are also likely to play a role in the evolution of the content offered by the industry. For example, the committee heard from well-established firms in the industry that noted that adult Web sites were becoming increasingly specialized to accommodate any imaginable sexual preference or taste (including those that might be regarded as more "ex- treme"), and that predicted that marketing to these various sexual "niches" would be the route to growth in the future. Indeed, it is possible to see intimations of this prediction today. One can find with reasonable ease sites whose sexual content depicts primarily older women, gay and lesbian 21A short survey of such devices can be found online at .

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THE ADULT ONLINE ENTERTAINMENT INDUSTRY 83 sex, women with large breasts, sex with animals, bondage, and anything else one might desire.22 This phenomenon is explained by the incentives in a crowded market to differentiate one's particular Web site from all of the rest. These comments should not be taken to imply that no adult Web site operator takes precautions against exposing minors to its products. On the contrary, there are a variety that do and some of them testified to the commit- tee. But the committee took testimony from and interviewed only individuals who represented well-established firms in the industry, and was unsuccessful in its attempts to hear from smaller "mom and pop" entrepreneurs. Even among these latter firms, there are some Mat do take such precautions. Never- theless, the committee believes that a small-time entrepreneur is more likely than a well-established firm to fail to take such precautions. Note also that the highly fragmented structure of the industry in- creases significantly the difficulty of successful self-regulation. Success- ful self-regulation is commonly associated with the existence of a small number of firms that control a very large fraction of the market and whose behavior can be coordinated in a reasonable manner. This condition does not apply to the adult online industry. Finally, as in defining "inappropriate sexually explicit material," dif- ferent people will have different definitions of actions that should count as "taking precautions." There are two aspects to the home page that a user sees when visiting a Web site. The first is content: some possibilities for site content include uncensored sexually explicit images; sexually ex- plicit images with strategically placed blurrings or black spots; images that are merely suggestive but not sexually explicit; text that describes the content of the rest of the Web site; and/or text that tells the user to leave if he or she is a minor. The second is navigation: some possibilities include links that allow the user to see other pages on the site only with payment, links that allow the user to see some other pages on the site without payment, and/or links to other Web sites. A site whose home page included uncensored sexually explicit im- ages and links allowing the user to see other pages on the site without payment is clearly not taking precautions against minors viewing sexu- ally explicit material and there are many such sites available on the Internet. But there is a range of precautions that can be taken, and no objective standard for "what is enough." Some of these precautions in- clude offering a text-only page describing the contents of the site in gen- eral terms and a warning that one must not be a minor to proceed further. However, nothing prevents a site taking such precautions from also pro- viding free entry to sexually explicit imagery. 22Note that such specialization is not limited to sexual content.