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Back to Business: The Porn Industry Begins Its Recovery

Back to Business: The Porn Industry Begins Its Recovery

December 16, 2001
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" The cracker installed a bot called "Eggdrop," a popular bot for protecting private IRC channels. "

After a relatively subdued holiday season, the nation begins a slow recovery. There was relatively little news regarding pornography and sex-related businesses, but that will certainly change as the nation's state legislatures get back to work this month.

In the Courts
Larry Flynt leads the legal news this month, as he has done so often. Frustrated in his efforts to send reporters along with the military to Afghanistan, Larry Flynt sued the Pentagon (Flynt v. Rumsfeld). Although his request for a preliminary injunction was denied by a U.S. District Court in Washington, D.C., Flynt has vowed to continue challenging the government's strict limits on press coverage of the conflict.

On the West Coast, the California Court of Appeals upheld California's anti-spam law in the case of Ferguson v. Friendfinders, Inc. The court concluded that the law does not unconstitutionally interfere with interstate commerce by imposing various regulations on commercial e-mailers. The case is likely to be cited by courts in the other 19 states that currently have anti-spam statutes on the books. The chief challenge for commercial e-mailers will be keeping track of all of the different requirements from one state to the next.

In Iowa, a high-profile murder case has an added twist – prosecutors sought and received permission from the trial court to introduce a bondage video seized from the defendant, Donald Piper. The victim was found with her hands bound by electrical tape, and prosecutors allege that the bondage video is evidence of the defendant's knowledge of bondage techniques.

Another voyeur case hit the wires last month. In Indiana, a night auditor for the Muncie Comfort Inn was charged with violating the state's law against voyeurism after he taped a female guest by hiding a camera in the hotel room's television. A handful of states have either adopted new statutes against electronic voyeurism, or have amended older "Peeping Tom" statutes. It is likely that many other states will be taking a close look at this issue in the months to come.

The Politics of Pornography
Remarkably, the political season is already in full stride, particularly in those states that have gubernatorial elections in the fall. In New York, Andrew Cuomo, the son of popular former governor Mario Cuomo, is seeking the Democratic nomination for the governor's race. Last week, Cuomo sent out an invitation to a fund-raiser that listed Hustler publisher Larry Flynt as vice-chair (which generally requires a contribution of $10,000 or more). After a New York gossip columnist broke the news of Flynt's involvement, the campaign announced that he would not be involved in the fund-raiser and his contribution would be returned.

Sexually-related businesses came under fire in a number of communities. In Unalaska, Alaska (a tiny community on an island in the Bering Sea, southwest of Anchorage), city leaders are looking at regulations to control behavior at the port town's first strip club. Despite its size, Unalaska is the nation's busiest fishing port, and the club is clearly aimed at fisherman with both time and cash on their hands.

Back on the mainland, the community of Litchfield, Michigan is taking the novel approach of requiring adult businesses to operate in the city center. The city hopes that potential customers will be discouraged by the prospect of patronizing adult business in the glare of city streetlights

Despite the success of the Voyeur Dorm in the U.S. Court of Appeals last month, web voyeur cams continue to be controversial. Most recently, a gay web cam operation in Seminole County has run into trouble with its neighbors and community officials. Although it's unclear that the web cam business is violating any laws, county law enforcement are exploring whether any action can be taken against the site. The cam operation is represented by David Wasserman.

Sexually-Oriented Business News
The January 2002 InterNext heads the business news, as numerous attendees commented on the relative seriousness of the convention. Even the parties offered useful networking and deal-making opportunities, as the industry gradually shifts from its wilder younger days to a more mature model. This trend is likely to continue at the August edition of InterNext, which will be held in Hollywood, Florida.

The holiday season was disrupted for third-party processor CCBill, which discovered just prior to the end of the year that numerous of its clients' servers had been hacked. The cracker installed a bot called "Eggdrop," a popular bot for protecting private IRC channels. Bots are normally used by crackers as a means of executing distributed-denial-of-service (DDoS) attacks, but Eggdrop is not typically used in that fashion. CCBill helped its customers eliminate the rogue bot and is still exploring what the cracker's objective might have been.

In the brick-and-mortar world, the New York Daily News ran a front page story on January 13, 2002, announcing that "Sin City Lives as Sex Biz Survives." The paper reported that despite out-going Mayor Giuliani's aggressive campaign against sexually-oriented businesses, at least 51 new adult businesses have opened since 1998. Giuliani's anti-smut campaign did have the effect of dispersing the businesses -- 42nd Street isn't the seedy center of the city anymore -- but he was largely unsuccessful in his clear effort to wipe it out.

Also from New York is the news that the Scores strip club, one of the most well-known clubs of its kind in the country, may go public. A formerly bankrupt dot-com, Internet Advisory Corp., has announced that it is in talks to purchase the nightclub and open a nationwide chain of adult clubs under the Scores name. Internet Advisory is currently trading on the Over-the-Counter Bulletin Board in the $3 range. The only other public nightclub business, the Houston-based Rick's Cabaret, trades on NASDAQ.

Pornography in Society & Culture
Move over, Pamela Lee and Tommy! The growing shelf of homemade celebrity adult video may have two new additions: Christine Aguilera and Mick Jagger. Right after the new year, news reports surfaced that a tape of Aguilera having sex with a former lover was making the rounds in Los Angeles. The video reportedly does not show the woman's face and Aguilera has heatedly denied that she is the individual who was taped. According to a statement posted to her Web site, Aguilera is planning legal action against any website that hosts or distributes the video.

More muted in his response to a similar situation is Rolling Stones legend Mick Jagger, who spent a night at the Aladdin in Las Vegas with an 18-year-old lap dancer. The 58-year-old singer subsequently learned that his evening's activities were taped (either intentionally or by accident) and that the dancer is planning to sell the video for $60,000.

Playboy magazine has helped Dedee Pfeiffer answer her sister Michelle's question, "What Lies Beneath?" The younger sister of the holiday star is featured in this month's Playboy in a wild pictorial that has her simulating sex with a male model. The 38-year-old also has a movie/TV career, although not of the same caliber as her sister. Whether baring all for Playboy is a late career boost remains to be seen.

Lastly, the issue of cybersex addiction is back in the news. A study by MSNBC and the Marital and Sexuality Centre of San Jose, CA, found that addicted males engaged in cybersex for an average of 5.7 hours per week. The definition of what constitutes "cybersex" is still a little vague, however, and the editors at MSNBC themselves admitted that the survey does not constitute "hard scientific" findings.

Frederick Lane operates SexBizLaw.com, an online library of news, legislation, and court cases relating to pornography and obscenity and the Porn Industry Observer. He is also the author of "Obscene Profits: The Entrepreneurs of Pornography in the Cyber Age" (Routledge 2000).


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