Cell phone the newest frontier for porn

Target: With the Internet, magazines and movies all but captured, the adult entertainment industry is ready to go after the wireless video market in the United States.

February 19, 2004|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

Pornography is going mobile.

That means the increased possibility of erotic, adult content anytime, anywhere.

The $10 billion adult entertainment industry has all but conquered the world of magazines, home movies and the Internet. Now, telecommunications experts say it's coming soon to a wireless phone near you.

Already popular in Asia and Europe, wireless adult content could generate $1 billion to $6.5 billion in revenue within the next few years, say experts who predict that it will soon invade the U.S. market, as new technology hitting the States makes it possible for people to swap pictures, browse the Web, instant message and stream video all on one phone.

"It's going to be a big thing," said telecom analyst Alan A. Reiter of Wireless Internet and Mobile Computing in Chevy Chase. "This is not a surprise. It's been coming for years. Although cellular operators generate hundreds of millions of dollars in revenue, they're still looking for profits. Pornography is seen as a potential profit maker. It's not something any carrier really wants to do, but they may feel it would be justified because of the revenue stream it offers."

Pornography has long been the accelerator behind the adoption of many new technologies, such as cable television, the videocassette recorder, DVDs and the Internet. Experts say adult content also could drive people toward buying new "smart" phones, known as third-generation, or 3G, phones, such as the Nokia 6620 and the Sanyo VM4500 video phones.

Wireless data -- which includes text messaging, ring tones and anything else that's available on cell phones besides voice -- makes up less than 3 percent of the industry's annual $81 billion revenue, according to the Cellular Telecommunications and Internet Association. But industry experts say the importance of wireless content is growing.

That point has not been lost on people like Jack Samad, senior vice president of the National Coalition for the Protection of Children and Families in Cincinnati.

"I call it sex in the palm of your hand," said Samad, who tracks new technologies for the anti-porn group. "We are on top of it. We know the threat. We see wireless porn as an alarming issue, and we see the trend mostly hitting the younger generation."

The alluring profit to be made off wireless pornography is hard to ignore. Strategy Analytics, a Massachusetts research and consulting firm, predicted that wireless porn will generate $1 billion in 2008. Other estimates show that mobile adult content could generate revenue of about $791 million by 2006, according to Britain-based Juniper Research in a study released in December.

"I think mobile phones will be the next medium that adult content will conquer," said Adi McAbian, managing director of WAAT Media in California, a telecom firm that offers adult content to European cellular subscribers.

After brainstorming with college friends about how to make money during the dot-com boom several years ago, Tony O'Neill began offering titillating text to owners of personal digital assistants. At the time, 10,000 PDA owners signed up for a free subscription to read four salacious stories a day, five days a week.

When the stories took off, the San Jose, Calif., twenty-something knew he had found a niche market for PalmStories.com.

"People started e-mailing us, wanting images," O'Neill said. "So in the summer of 2000, we introduced the images. The pictures were grainy, the screens were small, but the images were decent. The cool thing is that pocket PCs are much better at displaying video and full color images now, they process data faster and they're truly mobile. As new technology comes out, we've been riding the wave. The sky's the limit."

O'Neill won't reveal how many paying subscribers he's got, but back in 2001, PalmStories had 700 to 1,000 people who were paying $5.95 a month for a subscription. The fee is up to $7.95 a month.

He also won't talk about how much he makes, but said the cost of delivering content is mere pennies per megabyte.

"It's very profitable," O'Neill said. "We've never operated at a loss. We had a slow down when the dot-com bubble burst, but we've seen a big up-tick."

As picture quality and connection speeds improve on wireless devices, O'Neill said he will start offering streaming videos made specifically for the small screen.

Other adult-content providers have started offering a risque menu of minuscule images, from home-grown types like Danni's Hardrive, one of the world's most visited adult entertainment sites on the Internet, to heavy hitters like Playboy and Penthouse.

WAAT has partnerships with overseas wireless carriers who provide access to Vivid Entertainment's pornographic content directly through their private wireless network portals, which is often used to send other content such as text messages or photographs.

But industry experts and content providers say that kind of cozy relationship won't be easy to attain here in the United States.

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