Smut`s Compliance MasterBy Lawrence Walsh | Posted 2010-03-25 Email Print
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The adult entertainment industry was shocked into action when the federal government imposed draconian data requirements on video talent. This unique regulation issue created a lucrative business for one intrepid solution provider and exposes the value of vertical alignment.
Somewhere in a nondescript studio in the fabled San Fernando Valley, Jenna Jamison is stepping out of the bright lights illuminating a mock bedroom where she has just performed a variety of sex acts that would make even Warren Beatty and Wilt Chamberlain blush.
Unfortunately for Jamison and the producers of adult films, pornography isn’t indulgent entertainment to everyone; it’s considered lurid and obscene to a large segment of the population. For decades, an odd alliance of women’s rights groups and right-wing religious groups have battled to curtail, if not ban, pornography from theaters, video stores, magazine racks and, nowadays, the Internet.
Pornography hangs in the uneasy balance between protected speech under the First Amendment and the community’s right to set standards for decency and obscenity. While the Supreme Court has consistently ruled that pornography cannot be outlawed, the government can regulate it. And the federal government’s porn regulation of choice is the Department of Justice’s 2257.
When DOJ 2257 was enacted six years ago, the adult entertainment industry was scared stiff (yeah, pun intended) by the prospects of running afoul of government regulators. One infraction of the omnibus standard could result in ruin for their businesses.
From a technology perspective, DOJ 2257 has been a boon for Frank Hughes, CEO of Bellsolutions.net, a Los Angeles-based solution provider that has built a lucrative, recurring practice of supporting the compliance efforts of no less than seven of the top adult entertainment video production houses in the San Fernando Valley. The only thing the government said was that the studios had to collect three verifiable forms of identification and those IDs had to be bound to the films through the distribution.
"The government basically put a huge burden on the industry. They basically just said to do something and the industry was left guessing at what the government wanted," Hughes explained.
That meant it was up to Hughes, his team and the studio’s attorneys to figure out the intent DOJ 2257 and how to implement an ongoing compliance process. But before we get into the technical aspects, let’s take a look at why DOJ 2257 was conjured in the first place.
DOJ 2257 was enacted not to regulate the type of sex depicted in adult videos, but rather to ensure proper documentation of the actors and actresses. The seeds for the regulation came in the 1980s when a buxom Kristie Elizabeth Nussman burst onto the adult entertainment scene. She had natural camera presence, no inhibition on the set and stunning sex appeal. Nussman was obviously young – she told producers that she was just 22 – more than old enough to perform. But fissures started opening in her background story as her audience- and award-winning films elevated her notoriety. As it turns out, the actresses had borrowed a friend’s identity to conceal her real age and background. She was only 15 years old and her real name was Traci Lords.
To prevent another Traci Lords from attaining porn infamy, Justice department regulators in the Bush administration concocted DOJ 2257, which requires porn stars to use their real names and provide proof of identity and age. Sounds easy enough, but the regulation also requires that this proof follow the videos through the distribution chain. And, making matters worse, the regulation applied retroactively – that meant porn studios would have to pull the 1970s classic and highly profitable "Debbie Does Dallas" and thousands of similar titles from circulation if they couldn’t go back and ascertain the actors’ identity and proof of age at the time of production. Talk about stepping on an industry’s long tail.
Bellsolutions.net’s first challenge was sorting the years of lost identities. It spent months working with the studios retracing decades of personal records, talent contracts and actor headshots, trying to match the records with the stage names and, ultimately, identities of the people who starred in skin flicks dating back to the days when Carter and Nixon occupied the White House. They digitized the records and populated a database to ensure that the library of fornication was permanently bound with the records that would keep the studios in check with DOJ 2257.
Now, that sounds hard, and it was. But as Hughes sees it, the database project was just the beginning of a near seamless partnership between Bellsoutions.net and the studios for maintaining compliance. Many of the studios run on Oracle databases for records archiving. But the various entities in the global pornography distribution chain could operate on IBM DB2, MySQL or SAP databases. Hughes found a virtually limitless stream of work integrating disparate information systems to ensure that the DOJ 2257 compliance data followed the porn product through the entire distribution system.
Since building the DOJ 2257 practice, Hughes has found a nearly inexhaustible fount of work coming from the porn studios. His team meets regularly with studio executives and their attorneys to review DOJ 2257 compliance best practices. And, get this, they’re doing most of the compliance effort in the absent of government oversight. That’s right, Justice officials really don’t audit or review adult entertainment compliance. But the mere threat of the government ever coming in and examining records is enough to keep the porn producers sufficiently cowered.
"They adult industry is scared stiff of government regulators. So when the government tells them to do something, they just do it," Hughes says. "They’re not going to play around because the last thing they want is to have any exposure."
The porn industry spends millions of dollars each year on its DOJ 2257 compliance efforts. Adult Video News, the industry’s news bible, has devoted an entire section of its Web site to compliance (warning: if you go to read up on it, you’ll get more than just the low-down on the regulation). Compliance costs have been so high that it’s actually driven some smaller porn producers out of business, so it’s had a secondary benefit (at least from the perspective of the anti-smut forces). And while the Free Speech Coalition, a legal collaborative of the adult entertainment industry, has been engaged in a long court battle to have DOJ 2257 repealed, it doesn’t look as though the courts are willing to negate the government’s control over porn.
All this adds up to a lucrative technology and services practice for Bellsouth.net. And it just goes to show all solution providers the value of building domain expertise and investing in niche vertical practices. As Bellsouth.net demonstrates, once the initiative investment in time, training and processes is done, all work that comes after is low-cost, high-margin replicable services.
Ironically, the adult entertainment studios are being disrupted by the same Web forces that are undermining the mainstream media. Sites that feature amateur and self-generated videos such as YouPorn and RedTube are robbing the pay-for-play Web sites of the porn studios. And, unfortunately for Bellsolutions.net, these sites are less stringently regulated than the studios.
But not to worry, the government and the anti-porn forces will find these unregulated pockets eventually. And when they do, Hughes and his well-oiled porn compliance practice will be there waiting lend a helping hand.
Lawrence M. Walsh (mailto:firstname.lastname@example.org) is a vice president and market expert specializing in channels and security at Ziff Davis Enterprise. Click here to check out his blog – Secure Channels – for the latest discussions on security issues affecting solution providers.