19 September 2005


Matthew Zook
Underground globalization: mapping the space of flows of the Internet adult industry

Abstract provided by Nieke Kempen.

Matthew Zook is a leading researcher on technological change and urban and regional development. He is currently an Assistant Professor specializing in Economic Geography and Internet Commerce at the University of Kentucky. He led the Internet Geography Project at UC Berkeley, which tracked the diffusion of the commercial use of the Internet worldwide. His research spans topics as diverse as the geography of the Internet industry, the role of venture capital in regional development and IT training programs for disadvantaged adults. He holds a Master’s degree from Cornell University and completed his Ph.D. at the University of California, Berkeley on the role of venture capital in the development of the Internet industries in the San Francisco Bay and New York regions.

Zook’s paper ‘Underground globalization: mapping the space of flows of the Internet adult industry’, published Environment and Planning A 2003, volume 35, pages 1261-1286, develops a case study of the Internet adult industry in order to study the ways in which electronic commerce interacts with geography. Digital products, low barriers to entry, cost differentials, and sensitivity to regulation have created a pervasive and complex geography of models, webmasters, and consumers around the globe. With a series of specially developed datasets on the location of content production, websites, and hosting it is shown that the online adult industry offers people and places outside major metropolitan areas opportunities to become active purveyors of this type of electronic commerce. The roles of these actors, however, are not simply determined by a spaceless logic of cyber-interaction but by histories and economies of the physical places they inhabit. In short, the ‘space of flows’ cannot be understood without reference to the ‘space of places’ to which it connects. This geography also provides a valuable counterpoint to mainstream electronic commerce and highlights the ability of socially marginal and underground interests to use the Internet to form and connect in global networks.

The Internet adult industry is defined as adult-oriented websites that are accessible to the entire Internet community and offer pornographic images, audio, video, text, and chat to visitors. The content of these websites reflects the wide variety of sexual interests of Internet users and for the most part these websites are commercially driven.
Despite its size and diffusion, the online adult industry has been the subject of relatively little academic research. The adult industry is a good case study because its products have long been socially stigmatized and legally prosecuted, leading to agglomerations in certain cities with more permissive standards such as Los Angeles and Amsterdam. The geography of the Internet adult industry shows that the resulting geography is not simply random but connected to the histories and economies of physical places. Thus, rather than a simple annihilation of space there is a restructuring of connections between places that reorients and compresses time space into new configurations and hierarchies represented by the space of flows.

Digital products and ubiquitous demand
In many ways the adult industry is ideally suited for the Internet. On the supply side, the industry is greatly aided by the digital nature of its products which can easily bypass logistical and regulatory barriers that affect other types of electronic commerce. Furthermore, there are few barriers to the creation and maintenance of simple adult websites, making it relatively easy for individuals in any location to reach the majority of Internet users. Finally, the Internet adult industry provides a profitable linkage between areas with high poverty and few prospects, that is, Castells’s “black holes”, to global consumer markets. This linkage often takes place via the use of lower paid models but also includes the creation of websites. Although the Internet adult industry is likely not what many people envision when they seek to ‘wire’ their communities, connectivity provides the opportunity for both participatory and exploitative connections to global markets.
On the demand side, the anonymity of the Internet provides an easy avenue to pornography in localities that have outlawed or heavily regulate it and allows people to avoid the potential social stigma of visiting an adult bookstore. The global reach of the Internet provides a large potential market for any adult website regardless of the number of consumers in their immediate neighborhood. The large number of websites and other individuals interested in a particularly subject or fetish provides individuals with a perception of normalcy no matter what the judgment of their local society. Although this can be a boon for members of traditionally oppressed minorities (for example, gays and lesbians) the ability to find like-minded individuals also serves to validate the interests of pedophiles (Guttman, 1999; Marquis, 2001).

The demand for adult websites is difficult to pin down, although indicators suggest that a sizable portion of Internet users visits these sites. Netvalue.com reports that between 28% and 39% of Internet users, depending on the country, accessed an adult website during the month of January 2001. Visitors to these sites are disproportionately young and male even when controlling for the makeup of the Internet population.

Value chains of a furtive industry
Although standard economic data sources such as county business patterns provide no data on the Internet adult industry, it is possible to outline a general schematic of the industry based on secondary sources (Franson, 1998; Glidewell, 2000; Lane, 2000; Perdue, 2001; Rose, 1997; Rosoff, 1999) as well as materials posted on resource sites for would-be adult webmasters. Three geographically relevant and measurable manifestations include: (1) the production of content for the industry; (2) the creation and
maintenance of websites to distribute content; and (3) the hosting of websites. These activities are easily separated (both organizationally and geographically) from one another and help to create an industry consisting largely of small firms but with a few dominant players.

Websites – free and membership
The main distinction between adult websites on the Internet is between free or feeder sites and membership sites. Membership sites offer affiliate programs to free sites that pay for surfers sent to the membership site and who sign up for a membership. Rosoff (1999) reports that, according to the “… YNOT Adult Network, free sites comprise between 70 and 80 percent of the adult material out there. Franson (1998) estimates that a few thousand dollars (and in some cases much less) is all that is required to start one up. This low barrier to entry has allowed many individuals and small firms to participate actively in the industry.

The final component of the Internet adult industry is the location of the computer upon which the site is actually hosted. Because of large bandwidth requirements, companies specializing in the adult industry rather than traditional hosting services generally host adult websites.

Consulting estimates that adult Internet services brought in US $50 million dollars in 1996, approximately 10% of all Internet retail, and between US $750 million and US $1 billion in 1998 (Branwyn, 1999; The Economist 1998). Datamonitor estimates that US $1.4 billion was spent in 1998 and predicts US $1.78 billion in 2000 and US $2.3 billion in 2001 (Carr, 2000). Although all these figures should be treated
with some skepticism they do indicate a sizeable industry.

Content creation and concentrating profits
The first component of the Internet adult industry is the distribution of adult content. Although it is likely that content creation is more dispersed than the indicators here suggest (The Economist 1998), the distributors of adult content appear to be concentrated in many of the principal centers of the Internet. Almost 70% of the content distributors are based in the United States. The other countries listed in this top five include those with some of the highest user rates on the Internet. Canada and Australia are interesting cases because they have much larger concentrations of Internet adult-content distributors than their regular presence on the Internet (as measured by their share of registered domain names) suggests. In contrast, the United Kingdom, the country with the largest Internet presence after the United States, has a relatively low level of Internet adult-content distributors.
The bulk of money spent an content appears to go to the photographers and distributors rather than the models themselves; a trend which has intensified over time. In 1994, models in the United States for online interactive adult video received approximately US $50 an hour but by 1997 wages had dropped to US $15 to US $20 an hour or about a twentieth of the revenues that the video stream could generate (Lane, 2000, page 247). Other data sources available on wages within the adult industry (Richard, 2001; The Economist 1998) support these figures and Lane (2000) cites hourly wages for telephone sex workers at US $8 to US $15 an hour.
An important factor driving wages down is the structure of industry’s space of flows which connects models from poorer regions of the world willing to accept lower wages with content distributors. As The Economist (1998, page 21) reports “Most West European producers of sex videos use East European actors wherever possible … . In only eight years, Budapest has become probably the biggest centre
for pornography production in Europe, eclipsing rivals such as Amsterdam and Copenhagen. Stars’ fees have dropped sharply. Even excruciating or humiliating acts usually cost the producer only two or three hundred dollars, roughly a third of the fees paid ten years ago.”

Morais et al (1999) echoes this assessment and list Thailand and Hungary as important new centers for the creation of pornographic materials. Much as information technologies have facilitated the creation of call centers of back-office functions in hinterlands, the Internet has provided the adult industry with easy access to lower wage locations. Even real-time interaction via chat and video streaming can now be arranged for relatively low cost.
The dominance by the United States and the other countries indicates that, although the production of content may be more dispersed, the distribution systems and likely a high proportion of the profits remain in the hands of economic actors located in the most developed countries. This suggests that, although the geography of Internet adult sites corresponds with other uses of the Internet (for example, the United States is the largest user of the Internet in general and is the largest location of the Internet adult industry), an alternative cybergeography is emerging with Eastern Europe and the Caribbean playing important roles.

Shifts in content production
During the 1970s the adult film industry concentrated in the San Fernando Valley in Southern California with smaller concentrations in New York and San Francisco (O’Toole, 1998). The evolution of technology from film to video to digital formats made the creation and distribution of adult content much easier and less expensive.
As Holiday (1999, page 351) notes, “Less than 1 percent of new releases [of adult videos] are shot on film … . Anyone with $10,000 and a cheapo video camera is now a director and distributor.” This diffusion appears to have increased with the advent of the commercial Internet.

These figures are emblematic of the shift from the highly concentrated structure of the adult film industry to a more distributed system on the Internet. The technology of the Internet offers new opportunities for economic actors in peripheral locations. Although traditional centers such as Los Angeles remain important, their dominance has declined as more peripheral nodes have begun to participate.

Placeless networks and local contexts
Although pornography is not a new phenomenon, its online incarnation has fundamentally changed its patterns of production, distribution, and consumption. Advances in technology have shifted pornography from adult bookstores to video rentals to the Internet, rendering it more accessible at every step. Currently pornographic material is readily available to anyone with a computer and unfiltered web connection and can be downloaded in complete anonymity. For the average web surfer, this cyberspace connection is perceived as placeless, disconnected from any meaningful manifestation of geography (Dodge and Kitchen, 2001).
This geographic disengagement, however, is illusionary. The Internet adult industry operates in a complex space of flows which offers new methods for participation and exploitation. The nature of this interaction, the roles of particular regions, and the power relations within the industry depend upon the local attributes that undergrid this virtual connectivity. For example, the history of the Internet has served to imprint values strongly associated with the USA, particularly in regards to the fetishism of certain cultures and ethnicities while promoting Western views of sexuality. Moreover, content production in the adult industry has tended to disperse to lower wage locations, but the profits from this production are largely concentrated. At both the international and US level, the territoriality of legal regimes has pushed adult websites to openly hospitable regulatory environments or places with relatively weak government enforcement. At the same time the robustness of the US infrastructure makes it a preferred location for adult housing services. These examples aptly illustrate the continued importance and shaping role of location and places even within a ‘perfect’ Internet industry.

The assumption of easy access to pornographic content is likewise shaped by geography. Individuals in the United States and other countries with open Internet policies have unfettered access to adult websites, but only by using their own personal machines. Those whose Internet access is limited to cybercafes, workplaces, or public libraries are not guaranteed the same anonymous and unfiltered access. The public nature of cybercafes reintroduces the possibility of social stigmatization and may serve to restrict surfing habits. Companies often track and filter employees’ web surfing at the workplace both to increase worker productivity and to guard against hostile workplace claims. Many public libraries and schools have installed filtering programs on computers in response either to federal regulations or to locally made decisions to restrict access to adult materials.

Beyond the issue of privileged access at the individual level are national policies to control the materials accessible on the Internet. Authoritarian governments face the dilemma of introducing their populations to the benefits and power of the Internet while at the same time suppressing subversive material. Although centered on issues of political speech, personal freedom, and human rights, adult websites generally appear on the list of undesirable materials. Zittrain and Edelman (2002a; 2002b) have documented the filtering efforts of China and Saudi Arabia which have explicit policies regarding Internet access. Although the structure of the Internet presents considerable technical challenges to such efforts, Zittrain and Edelman find that both countries succeed in blocking many websites critical of the government or promoting specific religious groups or social movements. Interestingly, the filtering efforts of China and Saudi Arabia diverged widely in blocking pornographic sites. Saudi Arabia blocked access to 86% of the adult sites tested whereas China blocked only 13%.

Despite such governmental efforts, the genie is out of the bottle and will be difficult to return, particularly in countries committed to personal liberties. The technology of the Internet has connected remote places and facilitated the diffusion of any number of economic activities such as call centers, off-shore banking, and data processing. The Internet adult industry is yet another example of how a combination of regulatory issues, lower costs for content, and low barriers to entry results in a restructuring of production and consumption. While allowing access to a whole new range of people, the Internet is still shaped by existing structures of regulation, power, and hegemony. In short, the `space of flows’ cannot be understood without reference to the `space of places’ to which it connects.

This is an abstract of ‘Underground globalization: mapping the space of flows of the Internet adult industry’. To read the whole article please visit: www.zooknic.com/Analysis/.