The following is a reprint of an article written by Ian Portsmouth of Profit Magazine (Feb-Mar 2000 issue). He attended a seminar, at the Learning Annex, hosted by Jay Servidio, President of Teleteria, with an assignment to scope out the formula for making millions through adult websites.

From XXX to $$$

Move over, Hef. According to the only firm to risk a guess, Massachusetts-based Forrester Research Inc., online adult entertainment is a billion-dollar industry. Lots of people want in on that action.

Some 35 of us are gathered in a Toronto hotel room on a Friday night, hoping to learn the secrets of selling smut online. Our guru of choice: Jay Servidio, a New York-based cyberpreneur who runs Teleteria, a Web-hosting service with a booming e-porn business. A tanned 38-year-old with gold flashes streaking through his thick brown hair, Servidio makes no apologies for what he does. "This is a great way to make money," he quips. "It’s fun. There’s nudity involved."

Sounds good to Rob, 34, who operates trucking and construction firms employing 25. "I’m looking for an ulcerless business’ he says. Arme, one of 10 women in the class, is also hopeful. The 48-year-old has tried multi-level marketing, run a pizza joint and owned a 900 number. "But I want something more aggressive, something that will make me more money fast $" Anne explains. "The Internet and porn are a good combination."

Servidio promises not to rush as he outlines the basics. There may be as many as 50,000 porn sites running at any one time, he says, "but you’re not competing with them all." With huge demand for online porn and endless chum as jaded subscribers flit from site to site, there’s plenty to go around. "All you need to bring to your website is 500 hits per day," says Servidio. That could gross you $600 a month, but be says his average client makes $300 a day.

Servidio suggests a good starter site comprises a dozen pages of free content, a sign-up page, a warning page ("If you’re under 18, stop here!"), and a members-only area linking to at least 50,000 pictures and videos catering to a wide range of "interests". "How about a site focussing on one subject?" asks a longhaired man in a leather jacket from the back row. Why limit your audience, asks Servidio: "There are sexual appetites that need to be satisfied that you don’t even know about." "I don’t know about that!" counters the student.

More explicit advice follows. Get an ISP with lots of bandwidth. Buy your photos ($1 each) from the dozens of content providers who gather at industry trade shows. Collecting membership fees is a snap: just hire a billing company to do it for you.

Having made it sound easy, Servidio gets philosophical. "Do you all know who Warren Buffett is? He’s a god on Wall Street. He’s a friend of Bill Gates." Servidio tells us Buffett once listed his personal pros and cons on a piece of paper, and decided to purge all the negatives. "All of you have cons that are holding you back from making money," he says. The class falls silent. Servidio says he was once the same way: an overweight, insolent sales rep who had trouble keeping a job. Then a friend convinced him to try the phone-sex biz in the late ‘80s. That pal is now worth $20 million. The same could happen to us, says Servidio, but we have to act now: "You have a very limited time while your motivation is still high to start your own adult website."

Your bank balance better be high, too: Servidio prices a viable porn site at US$68,000 (US$50,000 for those photos alone). But wait! Servidio will sell you a turnkey site for just US$2,700 (that’s 100/0 off his regular price, and he’ll throw in two months of video free!) "It’s a screw-proof deal," he insists. With Teleteria handling customer service and the billing company collecting fees, "you’re free to make money and enjoy yourself."

Still, you’ll need traffic to your site. Servidio says there are 11 ways to market adult websites. We can register with search engines, "but you’re not going to get many hits from there." Same with posting to Internet newsgroups. Banner ads on adult sites work, but can cost upwards of $10,000 a month. Method No. 4 is Servidio’s favorite: bulk e-mail. "It’s the No. 1 way to make money in this business," he says, offering to hook us up with a good spam service. He never reveals the other seven marketing methods — but no one ever asks.

Doubters begin to emerge. Won’t everyone in the class end up with the same website asks the long haired guy? "With 50,000 pictures, it doesn’t matter!" shouts Servidio. "A guy would have to quit his job and look all day!" "How many hours are we expected to put into this?" asks another student. "Whatever you want," replies Servidio. Another pupil worries about infringing copyrights. "If you set your mind to think of the reasons you shouldn’t do this, you won’t," Servidio answers. If this is so easy, why don’t you just do it yourself? "I could do it and make tons of money’ he says, "but Teleteria was designed as a design and hosting company."

Here’s a better answer. The spam firm charges US$1,200 for one million mailings. Based on Servidio’s projection of a 30 % response, you’ll get 30,000 visitors to your site. According to Servidio, you can count on one in 500 to sign up. That’s 60. Charge the typical monthly fee of US$20 and your take will be, um, US$1,200 —before the billing firm’s 15% cut. Sure, your membership will grow if your can retain most of your subscribers each month, but you’ll have to refresh your content at a cost of thousands a month.

When the session ends, not everyone has done the math. Lara and Chris, a modelesque couple in the film business, have been researching online porn for months. "Jay’s company is fantastic," says Chris. "It promises everything you need to be promised." Sensing a sale, Servidio takes them to dinner. Rob is more skeptical: he suggests we all band together to spread the risk. Perhaps a shared ulcer is less painful.

Still, Servidio proves you can get rich quick with e-porn. He says he sells five to seven of his $2,700 packages per seminar — not bad for three hours’ work.

Ian Portsmouth