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How American Businesses Can Profit from the Euro

How American Businesses Can Profit from the Euro

November 27, 2008
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" adult entrepreneurs who hope to start billing in euros really need to do their research thoroughly "

For many years, the U.S. dollar reigned supreme. But in the President George W. Bush era, the U.S. dollar has become depressingly weak against major European currencies — including the British pound and the euro, which is now the official currency in 15 different countries. But there is a saying that when life gives you lemons, make lemonade — and in the adult entertainment industry, resourceful American entrepreneurs have been looking into ways to prosper from the almighty euro.

Raphael A. Berkien, business development manager for the payment solutions provider 2000Charge Inc. (which has offices in Los Angeles and Munich, Germany), has found that more and more U.S.-based adult Internet companies have been billing European customers in euros. "When the dollar was tanking versus the euro, a lot of our merchants in the United States — especially in the adult business — got really smart and said, 'Well, if I charge €19.95 in euros for the sale instead of charging $19.95 in U.S. dollars for the sale, I'll end up making $27. So it might be a good idea for me to try to increase my traffic and my sales in Europe,'" explained Berkien, who now lives in L.A. but is originally from Holland.

One of the American adult companies that has been profiting handsomely from the euro is the Denver-based Brickhouse Mobile, which specializes in cell-phone erotica. "Currently, Europe is our biggest market for mobile content sales," said Brickhouse President L.R. Clinton Fayling. "This is partially attributable to the strength of the euro and the pound versus the dollar. The unfavorable exchange rate does create a favorable financial environment for U.S. companies to sell products into Europe. The trick is to expend as little local resources as possible to complete the sales supply chain. We pay great attention to local staffing and fulfillment costs. With the digital nature of mobile content, it is possible to deliver a good amount of product into Europe at a relatively low cost and receive better than normal revenue."

Jeff Booth, president of the Los Angeles-based EroticUniversity.com, told XBIZ that he has had his share of conversations with American adult entrepreneurs who have been seeking new customers in European Union countries and billing them in euros for transactions. Booth said that although EroticUniversity.com isn't presently set up to bill in euros, that may very well change in 2009. Booth estimated that about 20 percent of EroticUniversity.com's customers live outside the U.S., adding that much of that 20 percent is in Europe — and for that reason, it makes perfect sense for the company to look into euro billing opportunities.

The strength of the euro against the U.S. dollar is not the only thing that makes European porn fans potentially lucrative for U.S.-based adult companies; the fact that EU countries like Holland, France, Spain and Italy generally have more liberal sexual attitudes than the U.S. is certainly a plus. "Every time we had something new to promote and had our publicist do a big push, it seemed to me that it was almost easier to hit those European markets," Booth recalled. "We did tons of interviews in Europe. Even though we were dealing with countries where English wasn't the primary language, we got a ton of publicity; we got a lot of attention in Germany, for example. Those mainstream European media channels are open to you if you have something sexually oriented to promote — probably more so than the media channels here in the United States."

Booth added, however, that U.S.-based webmasters who are catering to European tastes need to keep in mind that because of their presence in the U.S., they are subject to American obscenity laws — and something that Dutch or Spanish law enforcement could care less about might result in an obscenity prosecution in the Bible Belt. "Some of the biggest markets for porn are countries that accept the euro," Booth said, "but since the standards of what you can produce in Europe are different from what you can produce in the United States, how is that going to impact your content creation? We know that people have been prosecuted in this country for producing content that was acceptable by European standards."

But if U.S.-based adult entrepreneurs can appeal to European tastes without violating American obscenity laws, they stand to profit from billing EU customers in euros. Booth said that unfortunately, some American businesspeople will allow Americentric attitudes to limit their possibilities for growth. "There is a mindset in America that we are the center of the universe — that this is the only market that is important," Booth lamented. "Anyone who hasn't traveled outside of the United States is going to have that insular view of the world. And I think that type of thinking is hurting a lot of American companies; they just don't see the global picture. The future is global, and the Internet is global. There are countries on the euro that have a better economy than the U.S. economy, and it's silly not to go where the money is. American companies need to understand that there is a big world out there and that America isn't the be-all/end-all anymore, if it ever was."

Berkien stressed that while the euro can be quite lucrative for U.S.-based companies, adult entrepreneurs who hope to start billing in euros really need to do their research thoroughly. "One of the most important things about profiting from the euro is education; you need to understand the European markets and understand what their habits are over there, and then make sure you have the right tools to attract those people to your website. That includes everything from content to marketing to traffic to localized customer service to localized payment solutions," Berkien said.

One of the most important things to keep in mind, Berkien pointed out, is that many European Internet users aren't paying for erotica with credit cards. Debiting bank accounts, he noted, is a very common way to pay for Internet erotica in many EU countries. "If a guy from Greece doesn't have a credit card or doesn't want to use a credit card on the Internet, that doesn't make him a bad customer," Berkien said. "The guy in Greece has money in the bank and can pay with that bank account — and you have to target that guy because if you don't, somebody else will. Why would you want to turn that person away? Why would you want to show that guy in Greece or Italy the door because you only accept credit cards? That doesn't make sense to me. You have to target every European market with the billing solutions that they can use and are familiar with."

In the future, the number of countries on the euro will likely continue to increase — and American adult businesses, Berkien said, will need to know what those countries are. "The euro, the way it is sitting today, definitely has an advantage versus the dollar," Berkien explained. "And if you are an adult webmaster in the United States, you can take advantage of that."


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