The German Sex Industry
This is mirrored in the offline world. Sexshops are commonplace in Germany's High Streets and, unlike their Dutch counterparts, are fairly inoffensive from the outside. Admission to minors is prohibited, and inside a broad selection of mags, DVD's, videos and sextoys are to be found. Private video booths are also popular, and the majority of the movies being offered cater to the German's insatiable craving for all things fetish – particularly S&M and Watersports.
Practically every German town also has a video store, the adult section of which is again off-limits to those under 18 years of age. Invariably, these 'adult-only' sections are the largest and most lucrative section of said stores.
The industry is dominated by two heavyweights – Beate Uhse (a publicly listed company) and Orion who, interestingly, are both based in the northern most town of Flensburg, about 15km from the Danish border. Beate Uhse, a legend in her own right, was a former fighter pilot in the war before she moved into erotica and is known by 99% of all Germans. Both companies have a sizeable mail-order division and have aggressively expanded eastwards since the collapse of the Berlin Wall back in 1989.
Whist the above operate a significant proportion of the sex shops, there are plenty of independent stores most of which buy their wares from the wholesaler ZBF who are based in Wiesbaden, near Frankfurt, in central Germany. ZBF regularly holds trade-fair days, whereby content distributors can display their wares to the sex store owners.
Within Germany itself, there exists a north/south divide with regard to sexual tolerance. This can be attributed to the fact that in the south, the catholic church still has much more influence. Paradoxically, this is where the majority of the small ultra hardcore production companies such as GGG seem to be located. In the more tolerant north, Hamburg with it's infamous Reeperbahn ('the world's most sinful mile') is second only to Amsterdam in terms of it's red-light offerings and is popular with both Germans and tourists alike.
Much of the regulation with regard to online activities can be attributed to the numerous scams that took place in the late nineties involving dialers. The '0190' premium rate prefix has become synonymous with fraud in the eyes of many Germans. Those companies that wish to offer this billing mechanism now have to meet stringent criteria. Given the high penetration of high speed DSL connectivity in Germany, this payment mechanism has been rendered obsolete anyway.
Despite the challenges, webmasters with compelling content should not ignore this market. And when you throw the more tolerant satellite country next door – Austria – and German speaking Switzerland into the equation, you are looking at a market of more than 100 million potential customers.
Just remember to sell to them in their own native tongue, use a (German) AVS, and use a billing company that accepts Bank transfers – the Germans' preferred method of payment. Most Germans do not even have a credit card, and those that do are often reluctant to use them online, particularly with companies based elsewhere.
You should also consider using SMS (cell phones) as a billing mechanism. Everyone has one, your money is collected by the cell phone companies, the end-users anonymity is maintained. You can offer them a 'condensed' version of your members area and upsell or offer them full access for, say, 1 hour.
The Germans' appetite for porn has never waned. Start selling to them, but stick to the rules!