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  Will War Be Good or Bad for Business?
>> By Eric Ernest

March 20, 2003

CHATSWORTH, Calif. – With the Iraq conflict building to inevitable fever pitch, many in the adult Internet community shared their thoughts about how the effort to depose Saddam Hussein will affect their businesses.

Whether positively or negatively, respondents were asked how they thought the predominately United States-led effort would affect their economic bottom lines.

“At this stage in the game it's difficult to know how the war in Iraq will affect my income, which is entirely derived from self-employment as a writer and editor,” said Theresa A. Reed, who is perhaps better known as the erotic writer, artist, and Web mistress Darklady. “My intention within this year is to expand that into teaching sexuality and relationship enhancement workshops, as well.

“The financial success of each of these ventures depends upon the available capital of consumers purchasing services provided by advertisers or coming to me directly – like the workshops I host,” she said. “Publishing is always a risky venture, so none of this should be news to me or anyone who depends upon it for their livelihood.”

Greg Salsburg of IVolt Networks cautioned observers of the conflict that appearances aren’t always what they seem. “Sometimes what we anticipate or perceive is in complete contrast to the final outcome. Our intolerance for Saddam's ukase will lead to war and how it will affect business is still uncertain,” he said.

“However,” Salsburg added, “I suspect it will not have a large negative effect since the sentence ‘This war has me not wanting to look at naked women’ has never been uttered.”

Jay Servidio, president and owner of Teleteria, feels the impending conflict with Iraq will change our notions of armed conflict. “The inevitable military aggression against Iraq will not be a war as we know the definition of the word 'war.' This is going to be a slaughter worse then last time [the first Persian Gulf War],” he said.

Citing numerous articles on the subject that exhaustively detail the approach the U.S.-led assault will take, the New York native said, “It will be a blazingly fast attack that will be measured more in gigabytes than body count. The first Iraqi division that tries to fight against our boys will simply be wiped from the planet. Then, hopefully, the rest will fall in line and surrender.”

“The business that has invented and continues to thrive in will not be affected negatively. On the contrary, our business is likely to continue to go up. As more people from all walks of life begin to realize that money is getting harder and harder to come by, they will continue to contact to get them entry into one of the most profitable business on earth,” Servidio said.

“Our customer base has always grown since we started the custom turnkey adult Website business in 1994. In times of a sluggish economy we grow stronger, because people who wouldn't think of getting into adult Internet businesses before are now starting to question themselves.”

Servidio reinforced his opinion with the revelation that an estimated 24 million Iraqis represent a sizable untapped consumer market share. “Remember, inside every Iraqi there is an American waiting to come out. So let’s all get on the team and come on in for the big win,” he said.

Similarly, Eric J. White, the CEO of Virtual Reality Innovations Inc., said he feels the Iraq conflict can yield a valuable new client base long after the hostilities have ceased. He forecast the creation of “a new nation of customers that were formally forbidden by law to access our goods and services.”

Past economic trends have proven the adult industry is generally resistant to war and political upheavals. Instead of the possibility of short-term traffic reaching a plateau, White, like many others, sees a gold mine.

“In this case, I think the liberation of the Iraqi people and the freedom to think for themselves will create a new customer pool for everyone in the adult industry,” he said. “What better way for these people to finally be able to deal with their pent-up sexual frustration? When they have freedoms like us, they’ll have access to the World Wide Web and unfettered access to satisfy their sexual urges.

“I look forward to the increase of business. Free their minds; their libidos will quickly rise to the occasion,” White said.

After the war, business law and economics professor Kurt M. Saunders expects the sluggish economic landscape will clear, and things will get much better for everyone.

“Though I'm not running a business at the moment, my general impression is that the impending war is having a dampening effect on the economy, both e-commerce and brick-and-mortar businesses, since it creates a sense of uncertainty. That makes people more cautious about spending or expanding or starting new ventures,” said Saunders.

A California-based Web site designer known by the moniker ::MX:: offered a more sobering view of the financial landscape. “The upcoming liberation of the people of Iraq has definitely put a dent in our business. Unemployment is up, gas prices are shooting through the roof, and the stock market's still tanking!”

As for the current economic recession, the builder of portals for Japanese adult starlet Fujiko Kano and many others said, “It will be a while before we see bulls roaming free again. People and businesses alike do not spend money right now.”

However, the Scandinavian-born Web architect sees the thrifty attitudes of adult Internet consumers easing up toward the end of this year. “Once we've exterminated Hussein and his followers, there will be a great chance that we might see the light at the end of the tunnel,” ::MX:: said.

Clearly thinking ahead of the curve, Lord Austin, a Texas-based Web designer recently created He didn’t expect it to do as well as it has. In one week traffic grew from about 100 hits a day to more than 100,000.

“In the course of running my TGP, I get tons of Asian hardcore galleries, which I just delete. CreamAsia is soft Japanese AV idols only. One day I decided to go ahead and use all that fucking hardcore freaky shit and turned into a hardcore Asian TGP,” Austin said.

Reconfiguring existing TGP content and adapting it to a timely niche has resulted in the site generating a fair amount of revenue, while still retaining its original style. “I like to think of it as ‘Asian hardcore with an attitude,’” he said.

“I do not think the war will hurt my business. War is always good for the economy; more jobs and more spending is always good for my business. I think our industry will profit from the upcoming conflict,” Austin said.

Elsewhere, a wide spectrum of contrasting opinions can be found in the European sector of the adult Web market.

Among this chorus of voices is PK62’s Petr Jahoda. “As you might know, central European armies [from the Czech Republic, Poland, Slovakia, etc.] are likely to join the U.S. Army’s planned Iraq campaign. However, we’ll only send several hundred specialized soldiers and that is a number small enough not to have any impact on our business. Therefore, generally speaking, we feel the war will not have any significant impact on our business,” Jahoda said.

Bjrn Skarlen, director of business development for Electronic Group Interactive, prefers to approach the conflict with a sensitive eye toward diplomacy.

“We will see some positive as well as some negative effects. First of all war is never good, and at our company we definitely live by the slogan ‘Make love, not war,’” Skarlen said.

For Skarlen, a native Swede, and many of his associates, the upside of the certainty of the armed conflict is the inevitable rise in information gathering. “When something like this happens, [it] results in an increase of Internet traffic, which leads people to not only surf for news, but for entertainment as well,” he said.

Thus, affected by a climate of military escalation, he said he expects the adult industry will continue to see its online traffic spike, regardless of history’s economic trends.

“People get reluctant to go outside and tend to stay more at home or at the office,” Skarlen noted. “This reluctance to go outside will drive more traffic to the Net in search of news and, of course, entertainment. The Internet is the perfect medium for people to stay informed and also for people to forget. When people want to forget or take a quick break from stressful current events, what better escape is there than adult online entertainment?”

Ironically, EGI, an international facilitator of Internet commerce, bases its headquarters in Barcelona’s World Trade Center, centrally located at the city’s main port.

“Some months after Sept. 11 we did have to clear the building due to a bomb threat,” Skarlen said. “It was an extremely unpleasant experience, and we closed our offices for the remainder of the day. Since then we haven't had any more scares, and we hope it will stay that way. However, being in a world trade center, I guess being in any world trade center, you will always have what happened in New York in the back of your mind.”

“As you know the Spanish president, [Jose Maria]Aznar, is supporting President Bush and is one of his allies against Saddam,” he continued. “At a local level most people are against the war, or at least the more vocal people are against the war. During the International Day for Peace, Spain had one of the top demonstrator turnouts in the world. In Barcelona and Madrid alone, there were more than 2.5 million people in the streets. Like in most places, the people here do not want war.”

Given the socially conservative agenda legislated by the George Bush administration, enthusiasm that foes of the adult entertainment’s presence on the Web would relax their efforts to erase it completely from any media may prove to be premature.

On this point of contention, Skarlen is more optimistic. “From a political standpoint, during times of crisis – especially in the U.S. – adult entertainment receives less attention from the government. This results in a more liberal flow of adult commerce and transactions. Adult marketers will expand their efforts to take advantage of a more open marketplace,” he said.

With the positive increase of global Web traffic comes the negative effect of over-taxing the World Wide Web. Internet connectivity will slow due to attention rising from unwinding current events, and global telecom networks will be drained. “We’re confident that, in general, the international telecom and Internet network can manage a worst-case scenario, but it is hard to see in advance how increased traffic or traffic gluts could affect overall productivity,” Skarlen said.

As if war wasn’t enough to deal with, many of those surveyed said they felt the enduring specter of particularly virulent worm and virus attacks may increase as malign interests look to seize the opportunity to wreak havoc on the Web’s infrastructure.

“These collective actions affect everyone doing business on the Web; the damage and instability they could cause are immeasurable,” Skarlen said.

Attorney Richard A. Chapo of said he doesn’t expect the American military’s intervention into the regime of Iraqi President Saddam Hussein to have much of a short-term effect on the coffers of adult Internet entities.

“[In times of war,] depending on the nature of the media coverage, consumers may be drawn more to the television than the computer,” Chapo said. “Until those matters are resolved, I doubt we’ll see much of a change from the current situation. When the matter is concluded and if Osama bin Laden is ever captured, I expect that we will see the U.S. Justice Department start to actually focus on the adult Internet industry.”

Webmasters look to maximize unique click-throughs and sign-up numbers; similarly, TV networks endeavor to claim the highest market shares possible for economic survival. Entrepreneurs reliant on the Internet for their livelihoods may find themselves treading lightly during times of national crisis as traffic volumes drop, especially when newscasts inevitably divert the attention of consumers.

“Adult entertainment and sexuality/relationship products are probably like other sin industries, inasmuch as people consume them during good times in order to celebrate and during bad times in order to feel better,” Darklady said. “But if there's less money to spend, then there's less money to spend. Fortunately, as a writer I don't have the same expensive lifestyle that some other, more well-paid, members of the industry sometimes get used to, and thus I can ride out rough spots more easily.”

By seeking avenues to diversify her earning potential, Darklady said she feels she is in a better position to survive.

“Frankly, I expect the overall economic downturn to have more influence on my income level than I expect the war [to have],” she said. “It's likely that more markets will open up to me, since part of what I've been doing to get my name out has been to involve myself more in the political and activist arena.”

In 2002, she campaigned for statewide office in Oregon on the Libertarian ticket.

“What worries me most about the war is whether or not Bush and [Attorney General John] Ashcroft will use it as an excuse to start curtailing First Amendment rights and cracking down on ‘obscenity,’” she said. “Fortunately, Oregon has the most liberal First Amendment in the entire nation, so I'm probably safer here than anywhere else.”

Noting the dearth of freelance writers that cover both adult Internet and video entertainment, Darklady and others have expanded their areas of expertise to make their finances better withstand fluctuating labor markets. “I'm hoping that will help me keep my head above water as more narrowly focused creatives find themselves competing in the mainstream for jobs,” she said.

An overwhelming majority of respondents surveyed by AVN Online did express a universal sentiment: If given the choice, all would opt for peace and profit over war, political stress, and other uncontrollable circumstances.


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