IN THE BIZ

A review of the State of the Industry Seminar at the Phoenix Forum

The seminar opened with a presentation on the current legal aspects of the industry.IN THE BIZ

A review of the State of the Industry Seminar at the Phoenix Forum

The seminar opened with a presentation on the current legal aspects of the industry. Attorney Lawrence G. Walters, Esq. of FreeSpeechLaw.com began by describing the industry in relation to the government as “complex” and “changing”. The days of easy money and no regulation are over, according to Walters. With three major court cases (Alameda Books, COPA and CPPA1) currently under consideration by the U.S. Supreme Court – the outcome of each could change the face of the industry drastically.

From a legal standpoint, the industry is not responding appropriately. Webmasters continue to take more risks in terms of content, affiliates, etc. These risks are taking the attention away from concerns such as budgets for legal advice. Higher risks increase liability, and thus legal advice should be a major concern.

Industry “red flags” in the government’s eyes include: extreme fetish material, teen content (younger-looking models), public-posting forums, newsgroups, live shows, free galleries, promotions (i.e. spam), and celebrity content (fake and real). This is not suggesting that only these groups are at risk – targets can be hit or miss. Extreme content is the easiest to target, but everyone is at risk as complaints can be filed by anyone, including a concerned individual or parent.

As in many “state of the industry” seminars, legal issues dominated the discussion. The presentation painted a rather bleak or intimidating picture of the future of the industry, in that we are a part of a highly-regulated industry that is about to get more regulated. It was not suggested that we run for the hills, but to be aware and pay attention to specific warnings – namely the outcome of the three aforementioned court cases, which should be announced very soon.

The panel discussion proved that this viewpoint is not necessarily universal. After a serious warning about the industry’s future from a legal standpoint, the discussion moved onto the webmaster’s perspective, those who work in the industry daily, earning a living and walking the lines, defined (or soon to be defined) by our government. This perspective was far more optimistic and less concerned about the threat of regulation.

Ron Cadwell of CCBill suggested that the outlook is not quite as gloomy as suggested by Larry Walters. With a general belief that the industry is currently more self-regulated and is actually becoming less “schemey”, Ron’s perspective suggested that the industry is reacting appropriately to any changes that it may face in the future.

Morgan Sommer of Cybersocket continued the discussion with the attitude that the industry is capable of responding to future change through self-regulation. However, it was mentioned that with the industry being interdependent, it is imperative to regulate ourselves before the government has the opportunity to step in. Contrary to Ron’s view that the industry is less “schemey”, Morgan mentioned that there continues to be a lot of fraud – which must be stopped internally.

Diamond Jim of JLM Media offered a light-hearted opinion that the state of the industry is what it has been all along – “one day it’s great, the next it sucks”, essentially, continually changing. The feeling that the industry was finally cleaning itself up offered a brighter outlook, regardless of the outcome of the three court cases mentioned.

Directly following the panel’s presentation of viewpoints, opinions and discussion, the floor was opened for questions for panel members. Questions ranged from budgeting for legal services to specific issues such as 2257 compliance. Considerable time was offered to a discussion of the outcome of the Adam Glasser (Seymore Butts) case as to whether or not the final ruling was a benefit or detriment to the industry as a whole – siding more in favor of a benefit since the charges of obscenity were dropped and a minimal fine was charged.

Walters drew an interesting comparison between the adult video industry and the adult Internet, explaining that the adult Internet is unaware of the risks it faces, in that we have a false sense of security and the adult video industry is far more regulated than the adult Internet. It was mentioned that the adult Internet has not adopted the same regulation or legal protection model that the adult video industry has applied. It was estimated that 10-30% of profit in the adult video industry goes to legal fees, which is far greater than the adult Internet.

During open discussion issues of child porn were briefly discussed, stressing that the industry needs to stand up for itself by publicly separating the adult Internet from the reputation of its being a breeding ground for child porn.

At one point the discussion digressed slightly off-topic when the representative of PayPal was directly questioned regarding the issue of providing processing for bestiality.com, which opened the discussion of unity within the industry as a whole. Being that PayPal is relatively new to the industry, the line of questioning was somewhat invasive. However, the situation was handled professionally, intelligently and appropriately. Questions were raised as to whether or not processors, webmasters, etc. should offer “blacklist” information as to who is working with who – with a universal opinion that this would not work for the adult Internet.

Although there were moments of light-hearted comments, the subject of the future of the industry of which we all are a part kept the tone serious. Clearly, the government’s threat of involvement is not to be overlooked or taken lightly. The message was that we are responsible for our own fates and mistakes may not be overlooked in the future.

The general opinion of the seminar and the state of the industry was that we, as an industry must seriously think about every move or decision we make. More specifically, promotion, advertising and semantics… yes semantics. Choice of words greatly impacts legal vulnerability. For example, affiliates/sponsors should no longer consider calling themselves in “partnerships” with webmasters. This could potentially increase affiliate programs’ accountability for their webmasters’ actions. We as an industry must regulate ourselves or allow the government to step in and take over. If the industry gives the government reason to believe the adult Internet needs to be controlled, they won’t hesitate. We are dealing with a different climate and need to fight for our rights.

1 Information on these court cases can be found here:
Alameda Books
COPA
CPPA

Liz works in marketing for SexTracker MoneyTree and can be reached at lizr@mtree.com

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