Today's Top Tech Stories • Leak plugged on high-def DVDs - • Pulling plug on Net service not easy - • Yahoo, SanDisk team on wireless MP3 player - • AOL will target Google search ads on its sites - • Teen accused of Web escort service - • Add USATODAY.com RSS feeds E-Mail Newsletters Sign up to receive our free Tech e-newsletter and get the latest tech news, Hot Sites & more in your inbox. E-mail: Select one: HTML Text

Online porn often leads high-tech way By Jon Swartz, USA TODAY SAN FRANCISCO  Gail Harris is an unlikely high-tech pioneer. The former model and queen of B-movie gems Cellblock Sisters and Galaxy Girls fished nude photos out of a trash can years ago and went on to create a multimillion-dollar Internet company with the world's largest collection of erotic images. Sammy, of the Sammy4U adult Web site, which shows the lives of nudists 24/7. By Preston C. Mack for USA TODAY Jason Tucker was a mainstream film producer frustrated by Hollywood's bureaucracy and resistance to change. "No one was willing to take a risk on new ideas," he says, explaining his decision to start a profitable Internet company that sells technology to porn Web sites. They're among the Web's most innovative and profitable entrepreneurs, but pariahs among mainstream business people. Online pornographers have been among the first to exploit new technology for more than a decade — from video-streaming and fee-based subscriptions to pop-up ads and electronic billing. Their bold experimentation has helped make porn one of the most profitable online industries, and their ideas are staples at Fortune 500 companies. As cyberporn pioneers venture into new fields, such as wireless services, digital-rights management and geo-location software, their peers in other businesses are taking notes again. By Preston C. Mack for USA TODAY A camera records Bret and Sammy of the Sammy4U Web site. Porn's recent tech tinkering could have sweeping implications for the music and movie industries, which are trying to protect digital content from being stolen and traded. Each day, millions of video clips and photos are filched from for-pay porn sites and traded, forcing the red-light districts of cyberspace to find novel ways to protect digital content. The adult industry's use of technology already reshaped how Internet behemoths Yahoo and Microsoft MSN do business. Both rely heavily on fee-based subscriptions and prominently feature video-streaming technology.Amazon.com has effectively used affiliate-marketing campaigns — posting free content on 900,000 smaller sites — to attract millions of consumers to its site. Pop-up ads are seemingly everywhere on the Net. Technology has paid off handsomely for porn sites in the USA. Led by sites like Danni's Hard Drive and Cybererotica, they generated $2 billion in revenue last year, up 10% to 15% from 2002, says Adult Video News, a trade magazine. That's about 10% of the overall domestic porn market. The number of porn sites has vaulted eighteenfold, to 1.3 million, since 1998, says the National Research Council. It will likely grow as more Americans get high-speed Internet connections. About 35 million people visited porn sites in December — or one in four Internet users in the USA, says Nielsen/NetRatings. Tech and titillation The long partnership of tech and titillation precedes the computer age. Nude portraits were among the first photos taken. Middling VCR sales soared with the advent of adult videotapes. Porn peddlers promulgated the popularity of 900-phone numbers and pay-per-view television. "Where there's sex and tech, there are sales," says Eric White, CEO of Virtual Reality Innovations, a profitable maker of cybersex toys. Some established companies have quietly dabbled in porn for years. Comcast, the nation's largest cable company and Disney suitor, is one of the most far-reaching distributors of porn. Like other cable and satellite companies, it pipes adult films into pay-per-view TV services. But, like others, it doesn't break out revenue from adult programming in its financial reports. Online porn's tech tricks Many Internet technologies  some loved, others loathed by consumers  were first used effectively by porn Web sites. The good The bad Video- and audio-streaming of content, now staples of most Web sites. Spam Fee-based services  a major form of revenue for Yahoo and Microsoft MSN, which initially relied on ad revenue. Pop-up ads Geo-location software, which enables Web operators to identify where customers live. The software is now used by London's The Times and online gambling operations. Cookies  data files that let Web operators and advertisers record the trail of sites that a person visits and their online purchases. Segmented content. Many adult sites, like Web portals after them, are divided into individual channels for niche audiences. Sources: USA TODAY research, Adult Video News, Nielsen/NetRatings The sex-tech combination went into hyper-drive with the emergence of the Internet, says White, 39, who ditched ownership of a video-store chain in Pennsylvania in the mid-1990s for the potential riches of online smut. At his video stores, 70% of revenue and all of the profit come from adult-video rentals. The Internet lets anyone with a camera and Web connection produce content cheaply and quickly and distribute it to millions of people instantly. Porn purveyors no longer have to be in Southern California — ground zero of X-rated movies — to get into the business, he says. Thousands of women like Sammy, 30, a former stripper in Florida, have created profitable Web sites. For $20 a month, subscribers to her site have access to nude photos and video snippets of her. Plus, online porn ventures routinely share technology and promote each other's sites because it generates more revenue. Sammy's photos appear on 400 other sites. Technology has also taken porn out of seedy stores and delivered it to the living rooms of Middle America, says Frederick Lane III, author of Obscene Profits: The Entrepreneurs of Pornography in the Cyber Age. What non-porn consumers can expect in the next year or two from new technology inspired by porn innovators: sports and music videos sent to cell phones at a low cost. Content and ads delivered to PCs and wireless devices based on where you live and your particular tastes. Some of the new technology: •Digital-rights management software. Like the music and film industries, the adult-entertainment industry has grappled with digital piracy. Playa Solutions, the company started by former movie producer Tucker, has developed software that wraps digital content in a high-tech force field of sorts. When the user presses play on a video clip, for instance, a computer system that controls the content is electronically notified. The system asks for a payment or lets viewers see the clip if they agree to watch ads. The process has tested successfully in the adult industry and has drawn interest from music and movie companies, Tucker says. •Video-on-demand billing. Vivid Entertainment Group, one of the world's largest adult-film producers, is conjuring up electronic-billing systems that would let consumers download and record on CDs chunks of content. Consumers would be charged by the minute. If the idea catches on, media companies could offer classic film scenes, music videos and TV shows for a fee online. •Wireless services. XTCMobile.com transmits porn video-clips of two to four minutes to cell phones. It also supplies "groan" and "moan" ring tones. Provocative content is just another way to personalize cell phones that already come with digital cameras, video games and Web browsers, XTCMobile CEO Jchris Morrison says. XTCMobile is working with phone carriers to include child-protection features. Several media companies have expressed interest in the technology."The perfect markets will be sports, music and sex — in that order," Morrison says. •Geo-location software. Porn and gambling sites are among the leading users of the software, which helps Web sites identify the city where a person logs on. That lets them target Internet promotions to specific consumers in specific regions. Risk takers Often, the individuals who put new ideas to work can be as important as the technology itself. In the adult-entertainment business, there's no lack of risk takers."With no venture capital, we make our own money and rules," says Gary Kremen, owner of Sex.com. The industry is peppered with female executives and young male entrepreneurs who built businesses out of homes and balked at the prospect of working at a corporation. "Porn is more aggressive and less bureaucratic than the mainstream," says Tucker. "Our time to market is less than two weeks, vs. more than a year in Hollywood." Consequently, porn-site operators like Tucker are paid consultants to mainstream businesses, and their sites function as glorified test labs for emerging technology. He won't say whom he consults for, however. "People are less likely to gamble in the mainstream," Tucker says. "Hollywood doesn't like taking chances. If you fail there, you're gone." Harris was willing to take a chance with new technology in the adult industry — and she's a millionaire because of it. For more than a decade, Harris, 39, acted in low-budget science-fiction and horror movies and in TV commercials. But her entrepreneurial zeal landed her in the porn business. When a photographer she was dating in the late 1980s threw away photos of pin-up girls, Harris fished them out of the trash, thinking someone might pay for them. "I thought, 'Hey, this could be a good sideline income,' " says Harris, who, like many female porn executives, never appeared in an X-rated movie. "It grew and grew and grew." The company Harris founded and runs as CEO, FalconFoto, has grown into the world's largest privately owned library of erotic photos, with more than 1 million. The collection, which is licensed to publishing and Internet companies, is worth more than $25 million, online-porn experts say. "Technology turned trash into cash," Harris says. "That's a lesson other industries can learn."