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Warshavsky is also making huge profits by selling live videos to hundreds of other sex industry sites on the Web. The strip shows for heterosexual viewers on sites such as PenthouseLive, Vivid Video, Buttsville and AlleyKatz, and for gay men viewers on sites such as VividMan and SteelCity, are supplied by Warshavsky’s ClubLove. Over 300 sex industry sites pay IEG for live videos. The sites keep 35 percent of the revenue, while IEG gets 65 percent. Warshavsky’s IEG does business with 1,400 sex industry sites on the Web, comprising about 5 percent of the Web’s total number of sex industry sites. IEG has advertising banners on over 1,100 sex industry Web sites. IEG pays the Web site owner two and a half cents each time someone clicks on the advertisement, which links the viewer to an IEG site. Counting all the sites, at the end of 1997, Warshavsky had 400,000 subscribers to 29 Web sites. 201

In early September 1998, Warshavsky’s IEG launched a free web site that provides financial stock quotes and charts accompanied by soft and hard core pornographic images. He hopes to create a popular Web site by combining two hotly sought after items –pornography and financial information. He plans to attract men between ages 25 and 49. 202

Lapis Labs, Tucson, Arizona, USA

In early 1998, Lapis Labs operated 25 pornographic Web sites, such as XXXCellar, NastyLinks and FreeGayPorn. The sites have 150,000 images, 1,000 downloadable QuickTime videos and 700 RealVideo live videos, and receive between 15,000 to 30,000 buyers each day.203 The co-founder and software developer for Lapis Labs would not allow his name to be used in interviews. The founders of Lapis Labs claimed they wanted to make money while avoiding “corporate America.” They originally thought they would make children’s educational CD-ROMS, but couldn’t afford the start-up costs, so switched to pornography. The co-founder likes to focus “on being a technology company rather than a sex company.”204The private corporation was launched with an investment of US$10,000. In early 1998 it had six employees.

The US$10 per month membership fee provides the buyer with access to 80,000 “full- sized, full color JPEG images,” and 5 to 25 minute clips from 1,000 movies.205 The nameless co-founder will not reveal how many subscribers the company has, but the demand is such that the company is always upgrading their servers and equipment. Lapis Labs buys its pornography from “content brokers” and directly from photographers and videographers. Although the men running the company like to hide behind anonymity, they are not shy about the material on their Web sites. “If it’s legal, we have it. There’s some material that I personally find repulsive, but not everyone has the same tastes.”206 Also, for a group of men who claim they were initially interested in children’s education, they take a liberal view on children’s access to pornography.

“Children will have easy access to adult material so long as adults have easy access to adult material. For example, somebody’s dad or older brother is always going to have a porn collection to ‘borrow’ and show to friends, or dirty novels, or whatever. People like sexual content, they’re going to have it around, and kids are going to get a hold of it.”207

Lapis Labs sites have sophisticated search engines that enable the buyer to search film clips by gender, sexual act, number of people in scene, and a description of the people, such as race or hair color-two popular attributes on which stereotypes are based. In early

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