XBIZ Mentioned in Wall Street Journal online -
The Lifeblood of Online Porn:
Why is there so much porn on the Internet?
CAPS Internet Inc. offers a clue. CAPS, a small business housed in a Toronto office building, doesn't create or sell any adult content. But it serves up millions of pornographic photos and video clips each day on its dozens of Web sites, which have names like HardHut.com and GalleryHeaven.com and are often stumbled upon by Web surfers prowling for free porn.
After visitors click on the free images, they're directed to sites that charge for porn. If they become paying customers, CAPS receives a commission, often $40 per subscriber. The seven-employee company took in about $1.4 million in revenue last year, and is on track to top $1.8 million this year, according to Matthew Gamble, a senior executive.
So-called affiliates like CAPS are the lifeblood of the online-porn industry. Indeed, affiliates account for the overwhelming majority of adult sites on the Internet. A single site that sells porn often has thousands of free, affiliate sites pushing traffic its way, using sample images provided by the pay site.
"The entire industry revolves around this relationship," said Alec Helmy, publisher of XBiz.com, an information portal for the adult industry.
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Affiliates have been so successful at driving traffic to porn sites that purveyors spend a good deal of time and money keeping them happy. Affiliates drive about 60% of the 100,000 unique daily visitors to Vivid.com, the online unit of major adult-film producer Vivid Entertainment Group, said Michael Cardone, general manager of the company's affiliate program. The Los Angeles company regularly pays commissions to as many as 1,000 affiliates each month.
Last week, Mr. Cardone attended an adult industry conference in Las Vegas, where he schmoozed with affiliates at the Hard Rock Hotel and Casino's swimming pool. The company treated affiliates to drinks and took a group out to the chic Japanese restaurant Nobu for dinner, he said. "We spend a lot of money getting new ones and keeping existing ones as well," Mr. Cardone said.
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