She's approaching it from a great, sex-positive way but is having issues whenever the company touches the "regular world" - hard to get funding, taken seriously by non-adult industry people, payment processing, etc.
The "problems" in Internet porn do not appear related to reducing barriers to access or better tech, but in solving issues with how people cope with sudden, instant access to a historically unprecedented amount of material.
Yet again, porn is trending ahead of regular tech use, which is also starting to deal with the same issues of addiction, information overload, how to monetize premium content in the face of a vast universe of free, tech saturation causing detachment and loss of intimacy (and the controversy over whether it does any of these in the first place).
It's rather sad that these startups are essentially punished for not wanting to deceive their business partners about what they do. It sheds a lot of light on why the adult industry ends up with a rather sleazy reputation - it's not because everyone who wants to go into the sex industry wants to be sleazy. If anything, it's that the ones who want to conduct business honestly are discouraged or driven out.
I like to call those of us in the industry that put out great tech, operate on open communication and transparency, and don't cheat systems or customers as next-generation adult companies. It is a difficult road to take given the obstacles in the way, but that's also why it's exciting as an entrepreneur. If it were easy, everyone would be doing it. :)
I don't know whether this really is the underlying issue, but damn, it's unfortunate how plausible it is. And the reaction from Stripe to the reporter's request for comment all but confirms.
Basically, the expectations of a modern man's sexuality are pretty fucked up and contradictory and most prefer to avoid the entire thing in public.
Since a lot of people wont touch sex (or tobacco, oil, military, etc.) investments, you can get these at a discount compared to other companies with similar numbers but in a more mainstream category.
The problem (to me) is the criminalization of porn and prostitution in the US.
Just think about what kind of outrage it would cause if Stripe had a single prostitute or porn website use their service to receive payments. (For the sake of argument assume the prostitute is located in a jurisdiction that does not prohibit the practice, IIRC it is allowed in parts of Nevada)
Now Stripe gets flack for being overly cautious - there's just no way to do this without provoking a shit storm from one group.
The biggest issue for me has been the banks. My assumption is that Stripe and other players would be "ok" accepting payments from "High Risk" merchants. But they cannot, their partner bank will not allow it.
I later found an article by Cindy Gallop raging against this.
"A whole range of banks turned us down, including the startup banks, Silicon Valley Bank, Square 1 Bank. We finally got a banking account at CHASE, and we were extremely relieved, thrilled to get a check book that said Make Love Not Porn on it. And so, when... I began encountering enormous problems putting a payments infrastructure into place, because we are what the world deems adult content, we couldn't work with PayPal, couldn't work with Amazon, couldn't work with Google Checkout, couldn't work with any of the main merchant partner gateways. So, we thought, let's go back to CHASE, we have a business banking account there, let's apply for a commercial account. Unfortunately, that application surfaced the nature of our business within higher levels at CHASE. And it resulted in a meeting with a more senior guy, who essentially said to us, not only can we not give you a commercial account, but you now need to close your business bank account and take your business away, because we can't handle it."
I had a conversation about this over on Reddit that was fairly interesting.
The (possibly) surprising thing here is that banks aren't moralizing here. You can walk into any adult bookstore and pay with a regular old credit card just fine, thank you. Visa and Mastercard are not averse to allowing you to pay for porn.
The reason why banks and credit card companies don't want to be involved with online porn because there's an incredibly high rate of chargebacks. People pay with stolen cards, and people pay with their own cards and then claim that they were "hacked" when their wife wonders why there's porn on their credit card bill.
All of this creates a certain amount of work for them, and it's unprofitable.
So in a sad way, the banks' distaste for dealing with online porn payments is a just sad reflection of our society's attitudes about porn. If we weren't a bunch of weirdos who caused a lot of chargebacks and, instead, paid for porn like actual grownups... banks would have no problem servicing this industry.
Banks are quick to penalize merchants for CB fraud. I wish they would take more action against the individuals who commit it.
Undercut the competition which charges upwards of 15%, using that process. Make a killing.
The big BUT is that they fear retribution from the card schemes (Visa & Mastercard). Either of them can and do impose enormous penalties on the banks when they exceed the card schemes’ chargeback thressholds. Worse, they can ban the banks from issuing cards with their logos. This would be catastrophic for any bank.
Parenthetically, I was contacted by a bank recently, requesting that I remove a hentai scene that referenced 'pointy ears' (think Mr. Spock) in the meta data. Pointy ears, they said, was a feature of a 'hybrid human'. Hybrid humans having sex with humans, they said, was bestiality. And Visa would not process payments for anything promoting bestiality. This is just one illustration of how paranoid they are.
So that’s the rub on the processing side, but there are many, many banks that will board adult online merchants, in both the US and the EU. As well, there are numerous IPSPs (Internet Payment Service Providers) for adult merchants, ideal for companies just starting out, or companies not interested in sacrificing time and energy managing a private merchant account.
On the settlement side, that’s a new issue.
Banks are less and less keen to open business checking accounts for adult online merchants. They’re nervous about these transactions settling to one of their accounts.
This is largely the result of paranoia about new banking regulations in the wake of the mortgage-backed securities debacle. They are now (rightfully) under a great deal of scrutiny from regulators which translates to onerous judgement calls from banks.
"Isn't Bitcoin a scam? I saw on the news it is a scam"
"I want to just use my CC"
"What is Bitcoin?"
That said, I still will launch with BTC support. Because I believed the hype and coded the solution before doing interviews...sigh
It's terrible, the philosophy behind the cryptocurrency would support your freedom to trade your values.
The porn industry has, time and time again, used new technologies to overcome limitations of the medium by which they do business. I do think crypto-currencies play a part in that, especially when considering the opportunities presented by a global marketplace. Better you can sell to anyone anywhere with no fees, instead of being locked to a given region because of credit card number, or cost structure because of higher risk transactions.
UPD: doesn't matter though, I'd still implement BTC if I had to do it again. It didn't take much time and was a really interesting experiment. I do believe it's the future of Internet payments.
Regardless, as an adult retailer, we don't have anything to do with porn or prostitution. Stripe and their bank shouldn't put all adult businesses into 1 box.
Porn is illegal in the US?
But, more broadly, we actually work hard to push against the rules in many cases. (Cindy Gallop, mentioned earlier in the thread, can attest to this -- we spent ages trying to figure out a way to accept payments for her startup.)
Again, from my research, it is because the partner banks will not allow them to.
And, now that Stripe is quite big, don't they have some leverage over the banks to be able to say they do want porn sites et al. to be able to work with Stripe?
We rarely get chargebacks. Maybe that's because we focus on a different kind of customer.
As for Stripe's size, they are a tiny, tiny drop in the bucket compared to the world markets. Heck compared to a U.S based hedge fund they'd be tiny. I'm guessing they have very little leverage.
Do you think BTC or Stellar will help put downward pressure on the pricing model that Banks currently use for "High Risk" Merchants? My rate is essentially 15% because I'm a startup and my volume is so low.
Unfortunately, we didn't have the same Stripe experience as Cindy Gallop. We were never given the chancee to explain that we are a different type of business.
The men in charge of those businesses don't care what you sell. They only care not to get in trouble with the businesses they work with up the line. She should make her business acceptable to the banks... and I guarantee the tech companies will be HAPPY to take her money.
This is the post I had to write to our members on 'Why We Make It So Hard For You To Give Us Your Money':
The guys I know all communicate in private communities though, and not for the taboo reason but because the industry is overtly hostile and aggressive towards competitors. There are only 3-4 big players and they play dirty(no pun). They own the pay sites and free sites. They leak their competitors product on their own free site and pair it with upsale ads to their own sites. It is very dog eat dog and hard to innovate in because of the players not the taboo.
So, I'm trying to solve the problem by creating adult games that have realistic plots. My goal is to try and create a niche and prove that adult games can be a profitable business, so that big players take interest and we see some major adult titles that are rated "A" not because of the gore and violence in them, but for the erotica/porn content.
Since I'm only one person, I have to start small, with sub-genres where it is possible for one person to make something worthwhile in a reasonable amount of time--currently it's illustrated interactive fiction. So far I've released one game that is more of a demo than a full featured game. I'm currently working on my second game which is much bigger.
Probably because most of the audience does not care about acting or the story.
So before you invest your time and money make sure the users actually want good acting and a story in porn.
I've done a good amount of sex things in different venues ranging from phone sex systems to phone dating systems to sex robots in Second Life, so I've long ago lost my aversion to such things. But it surprised me how many people seem to be scared of participating in the industry.
It's easier to make high quality content now than ever before, and it's only going to get better from here.
This is what innovation looks like.
I think they are the definition of innovation in online content delivery of any kind. Live video streams, monetizing content, creating minor internet celebrities who can live off of their online work, confronting head-on issues of privacy and censorship. All of these things and more came far earlier in internet porn than anywhere else, and theres a good chance that whatever edge they're struggling with will be where the rest of tech finds itself shortly thereafter.
It's like graffiti in the subway as a precursor to ads for HSBC. It may be grimy, but they have nothing to lose so there's a good chance what they're doing is a brilliant move.
That's what makes #sextech a huge, huge opportunity - including bringing everything that innovates, does well and makes money in every other sector online - including great design. This is my co-founders, Corey Innis (CTO) and Oonie Chase (UX Lead) talking to BusinessInsider about how you design and build a sex site that isn't a porn site:
Porn in the abstract is absolutely, as you say, a valuable tool for exploring our sexuality, finding out what turns us on, learning there are other people with the same tastes out there. The issue isn't porn, but the absence of an open healthy dialogue around sex in the real world, which is what lies at the heart of the business problems this comment stream highlights, which in turn force the porn industry down worse and worse routes: when you force anything into the shadows and underground, you make it a lot easier for bad things to happen, and you make it a lot more difficult for good things to happen.
That same lack of open healthy discussion around sex is why these social problems exist - the ones that MakeLoveNotPorn is out to tackle:
Kit Maloney, Oactually http://oactually.com/
Cyan Banister, Zivity https://www.zivity.com/
Tina Gong, HappyPlaytime http://happyplaytime.com/
Sarah Jayne Kinney, UnboundBox https://unboundbox.com/
Dema Tio & Hermione Way, Vibease http://www.vibease.com/
Danny Wax & Tyler Elick, Spreadsheets http://spreadsheetsapp.com/
Akbar Dhanaliwala, MinnaLife http://www.minnalife.com/
Kathleen Funk & Alan Harris, XSync http://xsync.com/
Colin Hodge, Down https://www.downapp.com/
Ben Tao, Offbeatr http://offbeatr.com/
Kaitlin Prest & Mitra Kaboli, AudioSmut http://audiosmut.ca/
Roger McNulty, Gasm.org http://gasm.org/
Joe Nelson, TheyFit http://www.theyfit.co.uk/
Meika Hollender, Sustain http://sustaincondoms.com/
Sherif Maktabi, Glance http://www.glanceapp.info/
Cassie Robinson http://www.cassierobinson.net/
Kathy Harris, Slixa https://www.slixa.com/
Christian Thorn, Pinsex http://www.pinsex.com/
What Cindy said about how difficult it is for an adult startup is absolutely true. We're launching our pilot soon, but this technology would've reached market much more quickly if we were mainstream. We typically can't talk as openly about our ideas. Some adult startup founders run into trouble with family and friends. VC is also incredibly challenging because they nobody wants to be known as "the adult VC" in a financial world that patently discriminates against anything labeled adult.
At xSync we don't produce our own content or our own vibrators. Our website is completely clean, but because we have links to the videos on 3rd party adult sites where users can experience xSync, PayPal or your typical payment processors aren't willing to let us use their services.
We definitely encourage you to follow all of the innovative companies in this space, just know that, for the time, our products will take a little longer to reach market than you might expect.
We're making a sex toy platform (our library is named OSSex of course) so that it won't matter if your sex toy is made by guys. You can reprogram it to your liking, attach sensors that respond to your feedback or even build your own.
It is super hard to find a payment processor, but I imagine that their hands are tied by the card networks. I bet Stripe would love to support adult payments if they could: lots of adult specific processors charge like 14%. Seems like that'd be some nice action to be a part of, even if only in the adult industries that are lower risk (the adult industry is huge and there's no way some dildo shop is as high risk as a cam site, even though every one treats them the same.)
We are not denying that it's the banks that are the problem. Last I checked, the money that my company generates is as green as the money as an non-adult company makes. It's just a shame that banks and companies that work with those banks, like Stripe, are making blanket statements that all adult related businesses are risk.
Ben Milne of Dwolla supports adult ventures, and we work with them, but unfortunately as a startup themselves they only operate in the US currently - we're global and need global solutions.
What problems for example?
All the main video sites you go to are startups that are trying to innovate and make money. Porn is a very competitive industry. Pornhub and redtube for example are innovative startups it's just hard to amit it to ourselves because they are peddling smut.
I'm VERY familiar with all the tube sites, torrent sites, and most major studios. I was 13 when I got DSL, I'm 24 today. I think I've hit the 10,000 hour mark in fapping by now.
The whole thing is based on what pays, and from what I've heard from friends in the industry the last couple of years "If it's not gay it doesn't pay". There is simply so much free stuff around that there's not much to be made in the mainstream.
Our business model is the opposite of the porn industry's, where pornstars, no matter how well-known, get paid by the scene, on a payscale that may range from a few hundred dollars and tops out at a thousand or two for a scene, even for the most famous and celebrated pornstars. That scene goes on to be viewed billions of times on Brazzers, Naughty America, whatever, but the pornstars never see a cent from any of that. There are no residuals in porn - if there were it would be a very different industry - which is why pornstars need to supplement their income with live camming, dancing, Fleshlights, hushed up escort work etc.
With our model, the more people who enjoy your videos, the more you stand to make. We're only 20 months old in public beta, tiny, bootstrapping and battling every day, but in a world where the received wisdom is 'Nobody pays for porn' they're paying for #realworldsex. Here's one of our members on 'Why I'm Happy To Pay $5 To Watch Real World Sex':
and a number of our MakeLoveNotPornstars are already making four figures at each payout. (We are the answer to the economy :))
Tough industry. Hard to break out of a niche.
Nakedness is not sufficient at all. It's kinda hard to get off if you are doubled-over laughing at how lame the porn is.
For one, it scrapes all the top sites.
For another, you can see what people search for in which region. I.e. I am in Denmark and danish people apparently wants to see danish porn. I wasn't aware of that.
For a third, they have a live-search which is quite interesting. (and amusingly, read aloud by porn actors here: http://www.pornhub.com/view_video.php?viewkey=1025156889)
For a fourth, they also have a chrome extension, which if nothing else is curious as the adult industry has so far shied away from apps and such (I believe because of regulations).
Another interesting take is http://www.porniq.com
The site speaks for itself.
The much needed disruption is how to bring positive impacts to the mainstream market by using sex technologies, without leaving the sex element. How to use sex technologies to help couples to stay intimate, increase safe sex awareness, help individuals to understand his/her sexuality, sexual wellness, help men to understand female orgasm (no, it's not about bigger dick), etc.
In the recent years, we started to see sex-positive startups stepped up to this challenge. From MakeLoveNotPorn, Jimmy Jane, Crave, RevelBody, HappyPlaytime, PerfectFit, DOWN (Bang With Friends) and many more.
I'm the co-founder of www.vibease.com, the world's first wearable smart vibrator. I created Vibease because I was in a long distance relationship and I couldn't find any solutions that was easy to use and not invasive. Eventually we 'pivoted' to create immersive pleasure experience for women using audio erotica.
Cindy Gallop from www.makelovenotporn.com has been a great advocate to disrupt the old adult industry. She successfully brings the hard topic, porn to be discussed in the society. She takes the good parts of porn and leaves the bad ones behind, to encourage a healthy discussion about sex.
The challenge is that these startups always being treated like the old shady sex business, especially from the mainstream and holy (aka. hypocrite) institutions. The best way to overcome this problem is to pitch it boldly and hide nothing.
Faploid hasn’t officially launched, but has already build an active audience, is socially accepted and actively mentioned and promoted by various mainstream media outlets. Faploid’s users are as diverse as the content we serve. They are socially engaged, digitally equipped and searching for safe and quality adult content in an user friendly environment.
All content including movies, pictures, articles and more are based on our user's taste and interests. Faploid evaluates millions of new adult content every day and uses this information to match content to their personal interests and then delivers them automatically to their personal Faploid magazine.
Our users aim high and for that reason we only work directly together with the best publishers/content owners in a variety of niches from A to Z. For them Faploid isn't only a trusted partner in brand building, but also a quality partner in sending them traffic of people who are seriously interested in their content and willing to pay for safe and quality adult content.
After a long time of developing and deal making, we're in our run up to public launch. In the upcoming months, partly because of the enormous positive attention we´ve received from both (mainstream) business and consumer side, we will invite all the subscribers on our waitinglist step by step.
Cheers, Team Faploid
Often it feels like the issue with the industry is that it's so uncertain financially that it's too scared to make content for anyone other than the assumed stereotype porn consumer (straight dudes mainly) so there's over saturation of very similar, repetative content which breeds a strange, one-upmanship quest for never ending novelty.
The ease of access to consistently good and cheaper video equipment (dslrs that support video etc) mean that the people making the most interesting work exist outside of the industry, uploading onto tumblr or sites like clips4sale. Basically they're Etsy of porn, allowing independence from selling the rights to your work to big companies. They take a bit of searching but they're like gold dust when you find them.
our work is:
and here's what we plan at MakeLoveNotPorn as our version of advertising - Forget Sex In Advertising, How About Advertising In #realworldsex?
It would be quite powerful if it work with publishers and has face recognition ability, so when people upload a screenshot, they can be directed to the porn video over at the publishers.
Also, it is strange how one cannot search by body type by specify a 3D model of the body... we can only use descriptive terms.
One thing I've been playing with is a EEG headset with Oculus Rift. My initial idea is to utilize brain patterns with Oculus content to increase certain emotions.
For example, when one is playing Doom 3, the monsters come out closer and scarier when you are already frightened. Or if you're bored, nothing happens to try to increase suspense.
Of course, this could easily be taken to the adult industry. The same feelings of heightened sexual arousal could be coupled with more intense visual stimulation.
If it wasn't for it being, well, teledildonics, I'd be interested in pursuing it.
But that's not the reason that I'd be interested in teledildonics.
You hit the nail on the head with your second point - the money to be made.
Just think about how much money the online pornography, and camgirl, sites pull in.
From a practical perspective... what would Steve Jobs say?
I have no idea if now they are frontiers of innovation.
Like the idea of shared cams where all people can see even if just a few pay. Also That the people on the cam can do their own thing.
Most innovative idea I've seen in That sector for long.
and the Daily Beast:
Silicon Valley welcomes innovation and disruption in every other area of our lives except this one - which is why I gave this short talk at New York Tech Meetup back in Feb on why the Next Big Thing in tech is disrupting sex, and intro-ed Colin Hodge of Down and Dema Tio of Vibease to demo their products (go to sex+tech in player):
and why I organized a 'Changing The World Through Sex' track at Social Media Week New York also in Feb:
You can get a sense of the various #sextech startups who demo-ed in 'Sex Tech Shark Tank' here :)
We welcome as many people as possible to join us in disrupting sex and porn - for anyone interested, this is my talk on 'The Future Of Porn' at SXSW last year:
and I spell out the business opportunity in my open letter to David Cameron and Silicon Valley published by Wired last year - 'Don't Block Porn, Disrupt It':
One day I want to start the YCombinator for porn - who's in? :)
I'm going to study everything in this thread and use it for my startup. I have some ideas of how human sexuality can be explored through using technology without losing our humanity. Hopefully, we can all change the perception of porn and the dynamics of the industry.
I will post again in due time. :)
There are so many more, but that should get you on track to surrounding yourself with people who want to positively effect change through sex tech.
"isexdb is the biggest global directory of adult entertainment locations worldwide"
Programming mostly done by my buddy.
I founded Revel Body (www.revelbody.com) with the goal of using our new vibration motors to build better vibrators. We have been working on increasing the sensation and versatility of our products (more power and a broader range of vibrations than existing products) and removing the drawbacks of noise, reliability, numbness, etc. Right now we build and sell the most powerful, quiet and reliable battery-powered vibrator on the market. It is strong enough for muscle massage and can do things like create underwater suction and vibration (using the backside).
Unlike a lot of brands in the 'sex toy' world, our branding and design aesthetic are purposely designed to be clean, healthy and accessible. We focus on health and wellness as a way to enable consumers to buy and try our product. We want to remove barriers from people trying our products. We believe that the industry could double in size if people we not embarrassed to buy these products, so we are focusing on enabling that. We need to remove stigma, give people permission, etc. Focusing on the many almost endless medical benefits of regular orgasm is our focus right now.
These products are about as intimate a product as anyone can use, but they tend to be called 'sex toys'. This does not do justice to some of the better products our there, but probably is good for cheaper/mass market items. Toys are cheap and do not do anything important, and these are not just for sex in the traditional sense. Some brands are starting to use 'pleasure product', but we are looking for a new name for a high quality category of products like we build. Personal Appliance is too bulky. I would love if someone could put together a new for this category of product which really captures what these products can do.
We launched on Indiegogo, because the biggest crowd funding site would not allow 'sexual' related products. We blew past our goals nicely, but do not think kickstarter will come around and allow other sexual related products.
Unlike other sexual products, we have had good success at raising equity capital. We have done three small rounds which closed very fast and we ended up leaving many investors on the outside. I think our experience was different because we had a technology disruption story that made sense as well as being able to point out the many ways in which the industry is mainstreaming and growing rapidly. These points create a path for a company that can disrupt and industry as well as lead the charge to make it mainstream, which will lead to a great exit when a big consumer product is looking to enter this industry (they will want the best brand and technology). Other companies like Crave (raised $2.4M to angels), and Pipedream and Peekay show that mainstream PE money is entering this space.
There are ways to position companies for investment if you understand how investors view these kinds of investments; they are looking for an exit based return and to be part of something cool. Think of what kind of company would be bought (build versus buy decision). On being part of a cool startup, I think it is difficult to imagine better cocktail party talk than being part of a disruptive vibrator company. Companies in this space will probably do better with angel investors than with VCs, many VCs are funded by institutional funds which limit investment into 'morally questionable' activities (think fun stuff like sex, drugs, tobacco, rock and roll).
Like other sexual start-ups, we have had a lot of issues with other companies not wanting to do business with us because our sexual nature or association/proximity to porn start-ups. This includes banks, merchant accounts, advertisers (Facebook included), retargeting ads, etc. It is ridiculous but if you plan for it, you can work around it.
Lots of interesting things going on here...
I've been in the adult industry for almost a decade- both in "hardware" (sex toys) and software (mobile app store, video streaming). What sort of innovations are you looking for? Content, social, tech?
A sex toy company I find innovative is Revel Body. Most vibrators use a rotary motor that spins an off-kilter weight to create the vibration. Revel Body developed their own patented linear motor that uses magnetic fields of alternating polarity to slide a weight back and forth in a linear motion. It's super quiet, more powerful and last longer than the older motors. They also designed their own chip to give the user precise control of the frequency and speed. I would have loved to have used RB's motor in the toys I designed.
Lovepalz has the Zeus and Hera toys that couple hardware with software for long distance partners. Minna toys have pressure sensitive control panels.
The folks at Utherverse created an immersive adults-only virtual world. I believe they launched a major overhaul to their platform last month. They've also built a VR compatible platform specifically for the Oculus Rift universe. In terms of VR porn, Utherverse is at the forefront.
For software, I think we tend to look at consumer-facing sites and products, but there's a wealth of tech innovation happening behind the scenes. SendFaster, while not an adult company (but a tech co that powers a number of adult sites, mine included) has amazing TCP acceleration and image compression software.
While not a startup, Streamates developed their own live streaming technology that's used by millions of visitors daily.
Speaking of my company, I co-founded the MiKandi Adult App Store. We launched almost 5 years ago as the first adults only app store, before Android really hit it big. Being early adopters of Android and one of the few third party Android app stores at the time, we really dove head first into it. Under our belt today, we've got app distribution, mobile video streaming, in-app billing, notifications, DRM and content management, and soon-to-launch an ebook reader, mobile game creator, and comic reader and creator. We've tried to push other tech forward but are usually shot down soon after launching them- our Google Glass adult app, Tits & Glass, and our third party Chrome app store, MiKandi Mint.
As far as the problem we're trying to solve, it's less about a problem in the adult industry as much as it's a problem in the mainstream tech and banking industries, which is being discussed a lot here. I wrote about the hostile business world here: http://modelviewculture.com/pieces/sextech-startups-in-a-hos...
Sex Tech Is Untapped: These 11 Players Are Trying To Change That
This clearly does not describe pornography, not even the Pope thinks this.