According to InterClimax President Ben Jelloun, 20-25 percent of revenue is spent on new technology to support a global network of programmers and engineers. The company's most recent innovation is bidirectional live-feed technology that gives end users the ability to plug their own webcams into their home PCs and be viewed by the model and other site members.
"The only way you can make money in our industry now," Jelloun says, "is by introducing something new and unique. If you don't, you don't stand a chance."
Jelloun, 43, is an erudite and refreshingly candid man, a former stockbroker in Scandinavia who came to work for InterClimax in 1999 after brief stints in sales and marketing at Cyber Entertainment and Dollar Machine.
Jelloun hails from an extremely conservative family of antique dealers, he says, and is a proud family man with a wife and two children.
"It took me five years to explain to my family what I do," he says. "But during that time, the question was always open: 'What do you do for a living, Ben?' One day I told myself, if I'm proud of what I do, then I have to let people know, especially my 80- year-old parents. So I came clean with my dad, even explained about having 80 naked girls walking around the building. His reply was: 'Do you have a job for me, son?'"
The goal of InterClimax founder Werner Van Lubek was to bring Amsterdam's storied sex industry live into cyberspace. Today, the company sponsors more than 50 live cams worldwide, with strategic partnerships with powerhouses like Penthouse, Private and Vivid.
One of the first things Jelloun did at InterClimax was put an end to recurring billing and focus on taking targeted marketing on still galleries to the next level.
Still galleries, Jelloun says, "are and probably always will be an excellent tool for gaining traffic." InterClimax provides the ability for the end user to upsell to live chat sites with the actual models they see in the free galleries.
"Instead of recurring billing, we created a totally free members area full of content from the same models we upsell with our premium content," he says. "Our business is built on the satisfied members who return to our product consistently, only paying for the interactive live content they want."
What about the overhead involved in keeping 50 production studios up and running?
"When we started out, we owned a lot of studios around the world, from the U.S., Canada, U.K., Holland, Spain, Romania, Poland, Russia, the Czech Republic, Latvia, the Philippines, Colombia, South America and Hungary, just to name a few. Anyone who has been involved in the live and interactive content industry knows that it is hard work to run such an operation 24/7."
Franchises Are Key
The solution to that burden was the creation of franchises.
"This solution," Jelloun explains, "is ideal because we supply our partners with the technology, the traffic, the billing platform and the customer service as well as our experience and expertise. All the studio owners need to do is keep up with the schedules of the models and manage the proper training and recruiting of new models that reach our high quality standards. The models of these studios are online on many different sites that we call Private Labels."
The Private Label index includes many popular interactive sites like Florida Wetdreams Live Cams, Amsterdamaged Live and Lightspeed Sorority.
"Today, the marketing aspect is the hardest part," Jelloun says. "Just advertising on the web isn't enough these days. We've been looking at fresh ways to advertise via different media: television, newspapers, Internet radio and mainstream magazines. We've developed software that makes it possible to stream directly via the Internet to television offering up to 25 frames per second, and we see this technology as having great potential in other markets outside the adult industry."
The girls of InterClimax have even been featured in reality shows on European television, including the first reality soap series about girls working in the sex industry, a 40-episode series for Holland's Veronica network that broadcasts every night at 11 p.m.
A 10-year industry veteran, the former stockbroker confesses to having a negative view of the industry before he entered it.
"Considering that I come from a conservative family and was born in London, where polite English society gives one the impression that no one in the porn industry is to be trusted and it's a dirty business run by a bunch of pimps instead of business people — you know what?" Jelloun says. "I was stupid like the rest of the world and believed that. Now, after 10 years, I have to say it's the best industry I have been involved in. I would not change my life now for anything else, especially having friends that I can party with and the next day we make money out of the ideas we spoke about. This does not happen anywhere else. So fuck the conservatives. I love selling sex."
And if one fabled story is any indicator, selling sex may be a lot safer than selling Nasdaq shares.
"One time I was speaking to a client from Greece and it took more than four hours to convince him that I had the right shares to build his stock portfolio," Jelloun says. "His reply was that he needed me to fly to his office. So I asked him what kind of investment he was talking about, and he said $1 million. When I got to his office in Greece, he had many bodyguards in the meeting room, and they were all carrying guns. To make a long story short, he wanted me to guarantee his return on investment with my safety. We didn't do the deal."
And what's in the future for InterClimax?
"InterClimax is making more profit than before, and we will keep growing," Jelloun says. "In our business, you have to be strong to prove you are a real business and not just a bunch of porn farmers. The sex industry will be with us to the end, but to survive, we have to have a good image so end users will trust us. We have to have more imagination and ambition so we can drive the technology faster and faster. The people who drive the industry the right way will be around for a long time, and we at InterClimax are going to be one of those companies."