The Booming Dot-coms

Only smart laws and a change in societal approach will lead to better policing

Even as businesses experiment and find ways and means of tapping the Web as

an efficient tool, there’s one industry that draws minimum revenues in excess

of $1 billion a year globally. Estimates also indicate that this number will

grow ten-fold in the next five years. There’s an estimated 400,000 websites

worldwide contributing to this business, which amounts to a relatively modest

$2,500 revenue each year per website. At $25 a year, that’s 100 subscribers

each–not factoring in ad revenues. While profitability may not be high due to

intense competition, the cost of entry is low. The secret success of the

Internet revolution–the online adult content industry.

Data is sketchy and estimates vary, but as early as October 1998, a brief

from Forrester Research Inc, a Cambridge research firm, indicated that online

pornography pulled in revenue of $750 million to $1 billion worldwide. It went

on to say that "...at least three of the largest sites–actually networks

of several URLs–have gross incomes of $100 million to $150 million annually,

mostly from subscriptions." Forrester said it validated its numbers by

checking figures from credit card processing services that cover Web

transactions.

Al Goldstein (founder of Screw magazine) has been quoted as having said that

30 years ago, Screw cost 25 cents and had a circulation of 190,000. But now, his

site–which charges a subscription fee of $19.95 a month for a variety of video

feeds, escort-service ads, films, games, jokes, stories, pictures and an archive

of past issues of Screw–gets 200,000 hits a day.

"Usage is steadily increasing at as much as 25% a week," he says,

adding that 61% of subscriptions are from outside the US.

Whether the subject is considered taboo or the numbers fuzzy, it cannot be

denied that adult content is hot on on the Web, and there to stay. And by any

standards, it is a successful online business model. And if it is successful, it

will continue to grow. The anonymous nature of the Net is helping the epidemic

spread in an invasive fashion. It is virtually impossible to avoid this content.

You do not have to go anywhere. E-mails and offers reach virtually every user.

Most of them do not even attempt a disguise. Whether you like it or not, you get

it. The industry knows no boundaries and spans the world. Laws and regulations

either do not exist or cannot be enforced across geographies. Technology cannot

bar the invasion–at least not in any significant way.

So does this industry need regulation? And if yes, in what form?



The first part of regulation relates to circulation of uninvited content.

Spam is considered bad. Adult spam is worse. Because tracing back is tough,

offers with explicit content land up in all mailboxes. The same thing does not

happen with print media or even television. You do not get explicit samples in

the mail and you do not see normal programs interrupted by offers with explicit

content. While some laws exist, enforcement is tough. Unless trace-back

technology gets simpler and better and nations work together, it is unlikely

that this situation will change. How do you prosecute a spammer sitting in Egypt

for sending mails to Australia–even if he can be traced? India does not have

any anti- spamming laws. The US has a law, but it is clearly inadequate.

Spammers find all kinds of ways to spam, but remain on the right side of the

law. For all practical purposes, the law does not exist.

What does the legal machinery have to say?



In 1996, the US Congress passed the Communications Decency Act (CDA). Its

purpose–to provide protection against harassment, obscenity, and indecency to

minors by means of telecommunications devices. In 1997, the Supreme Court

unanimously upheld a lower court’s ruling that declared a portion of the CDA

"unconstitutional" because it violated the right to ‘Freedom of

Speech’ but certain parts remained intact, including child pornography, child

predators and Internet obscenity.

US laws have leaned toward protecting children from pornography. As early as

1977, child protection Acts had been enacted, prohibiting "children from

being used in pornography and the transportation, import, shipment and receipt

of child pornography by any interstate means, including by mail or

computer."

Indian laws related to pornography are part of the Indian Penal code (IPC)

and the Indian Information Technology Act, 2000. Section 67 of the IT Act covers

the following, "Publishing of information which is obscene in electronic

form..." It adds that whoever publishes or transmits or causes to be

published in the electronic form any material which is lascivious or appeals to

the prurient interest shall face stern punishment.

Section 293 of the IPC also specifies, in clear terms, laws against sale of

obscene objects to minors. As per Section 293, "Sale of obscene objects to

young persons–whoever sells, lets to hire, distributes, exhibits or circulates

to any person under the age of 20 years–shall invoke tough punishment. The IT

Act, along with IPC, basically sums up the extent of protection from pornography

to minors as well as Cyber regulations for pornography. To make the law stick in

cases of online pornography, Indians may have to refer to many other sexual

harassment and child abuse laws.

While laws exist, the Indian problem is one of definitions

and enforcement–definitions are vague, enforcement tardy. Convictions,

therefore, are tough. And so far, none have been attempted.

Internationally, laws are clearly inadequate to handle the

problems unless the enforcement is taken up in a big way with a lot of

publicity. China has been banning search engines that lead to adult sites. But

any country can only ban the hosting of services from servers on its own

territory. How can it prevent access to servers in other countries? Technology

can provide some answers, but not all of them. China has closed some 20,000

Internet cafes for "illegal" activities. Singapore has an Internet

Code of Practice that addresses concerns of ease of access to pornography,

especially by children and minors. Its regulatory focus is on mass impact

websites that distribute pornography. It also spells out the obligations of ISPs

and content providers.

Clearly, laws and technology are inadequate and going to

remain so. Also, adult content is not harmful in all situations. And no, it is

not going to go away on its own. It is a lucrative business and will continue to

thrive. Its visibility and scale will be determined by the overall approach of

different societies to adult content. Yet, there are some aspects which need

careful handling. Like child protection, unsolicited approach and impact on

presently ‘protected’ societies which are now wired into a new information

source. The answer lies in legal steps, child education and having codes of

practice that societies follow... Even as business thrives.

India has not yet started any work on this. There is no

department, nodal agency, association or NGO that is even attempting to define

the basic steps necessary to regulate adult online content–so that its harmful

effects are minimized. As long as the Net access itself remained limited, the

problem was also limited. But with access increasing and extending to other

devices, distribution channels are multiplying rapidly. Now would be a good time

too act.

SHYAM MALHOTRA The author is Editor-in-Chief of Cyber Media

(India) Ltd, the publishers of Dataquest