Charlotte: Porn hub for the nation?
Local firm distributes online on-demand films
ANDREW SHAIN
Staff Writer
For millions of people who download hardcore films off the Internet each year, the porn comes through Charlotte.
Inside a plain brick office complex not far from the airport sits the nation's largest distributor of online on-demand adult movies.
AEBN doesn't produce porn. Instead the company sells movies made by others, such as Playboy and porn giant Vivid Entertainment, to view over the Web on streaming video. And now it will send clips to mobile phones.
"We're more of a technical company," said AEBN President and founder Scott Coffman, who got into porn after failed bids to write cartoon books and create a cell phone directory.
AEBN, which stands for Adult Entertainment Broadcast Network, is poised to lead a major shift in the adult-movie industry. Online video-on-demand sales could supplant DVD and videotape sales within three years, an industry observer said.
Few people outside the adult industry probably have heard of AEBN, but the 5-year-old company employs about the same number of people as a department store (125) and generates roughly the revenue of a regional restaurant chain ($50 million).
Behind AEBN's vanilla exterior and darkened windows is a labyrinth of brightly painted hallways connecting offices with employees -- about one-third of them women -- managing thousands of Web sites, writing movie descriptions, luring more filmmakers and handling customer-service questions from 2 million accounts worldwide.
And people get paid to watch porn all day working inside a large darkened room lined with 20 computers where movies are coded for the Web.
"Sometimes you have to watch something you really don't like, but you're really on autopilot most of the time," said Dave Puryear, 33, who has coded films for two years. However, "it's certainly more fun than working for a bank or an insurance firm."
Sgt. Coerte Voorhees, who monitors sexually oriented businesses for the Charlotte-Mecklenburg Police Department, said he has never received a complaint about AEBN. The city does not classify AEBN as an adult business because customers cannot walk up and buy anything.
"Unless you went inside you would never know what's going on in there," Voorhees said.
AEBN, with all its computer work, could be based anywhere. It's in Charlotte because Coffman -- who once dreamed of becoming a dentist -- landed in town two decades ago as a stockbroker.
"It's an indication of how everything (in the adult industry) is changing," said Frederick Lane, author of "Obscene Profits: Entrepreneurs of Pornography in the Cyber Age." "They're not in people's faces. They're not lowering property values. They're only offering this to people who want to buy it over the Internet. And I'm sure some of these people are in Charlotte."
The big picture
Where people watch adult films has moved over the years.Viewers visited theaters to catch adult flicks in the 1970s. The videocassette recorder brought movies into homes in the 1980s. "The Internet blew the door off that," Lane said. "It's now about privacy."
Online video-on-demand accounted for 10 percent of movie sales in 2001 and should rise to 25 percent this year, said Luke Ford, a California journalist who follows the adult industry. People buy about $500 million a year in online video-on-demand movies.
Coffman figures his company holds about 75 percent of all U.S. online adult video-on-demand distribution, a figure not disputed by industry observers. AEBN dominates because of an unusual trait in the adult business -- it's honest, three experts said.
"They're actually a pretty colorless company, but they're known for doing what they say, which is rare in the industry," Ford said. "Maybe there's something about the South."
They also offer a mountain of films. AEBN handles 30,000 titles from 850 filmmakers -- enough movies to watch one every night for 82 years.
"They've cornered the market by stockpiling a lot of content" that content covers a huge spectrum of fantasies and fetishes, said Kevin Blatt, an Internet porn consultant who helped publicize a Paris Hilton sex video.
The movies are offered on 200 company-owned Web sites and 30,000 online storefronts that AEBN runs for others.
Much of AEBN's business comes from virtual video arcades where people buy packages of minutes and can scan thousands of movies. The sites charge $9 for a little more than an hour. "Nobody wants to watch a whole porn movie," Coffman said.
The future
AEBN wants to conquer phones, having launched Xobile in April.
The target audience are people without computers or who want their porn portable, said Harvey Kaplan, Xobile's operations director. A two-minute clip costs $2.50 bought over the phone.
Xobile recently started a new service where people can buy videos by scanning bar codes in adult magazines or catalogs with their video-camera phones. The bar codes link to videos or Web sites.
"(Innovation) is all driven by our desires," Kaplan said. "We never hear people talk about sex as a basic need. But people will dig and dig to find it."
AEBN expects to continue growing because of porn's burgeoning mainstream acceptance.
Porn fashion inspires clothing trends. More mainstream movie and TV documentaries are profiling the adult industry. Charlotte's own Tammy Faye Messner roomed in a house with porn star Ron Jeremy for a reality TV show. Major companies -- including Time Warner and News Corp., owner of DirecTV -- make money selling on-demand adult films over cable and satellite TV.
And everyone is inundated by sexual images and content in mainstream entertainment.
"You see what stars wear to awards shows? Most of the stuff is see-through," Coffman said. "Look at `Desperate Housewives.' It's all about those girls (having sex with) other guys. And the reality shows are all about who's going to hook up with who."
Coffman doesn't want the brown wrapper taken off porn all together. "We want some taboo," he said, laughing. "We make more money that way."
The boss
Coffman, a youthful looking 43-year-old, said he was never interested in porn before getting into the business -- and it shows.
His office is pretty tame. The walls include a framed Growl Towel, which he sold at Carolina Panthers games in the mid-1990s; a modern painting; and a vintage Playboy magazine cover print. A glass cabinet is filled with photos of relatives and family pets.
The boss dresses casually like workers at tech firms -- preferring long-sleeve T-shirts and jeans. He owns a home near Dilworth and drives a Saab sedan.
After graduating from college in his native West Virginia, Coffman wanted a big-city life and the closest was Charlotte. He got a job as a stockbroker. "I did it just long enough to realize it stunk," he said.
Coffman became a serial entrepreneur. He promoted cigarettes. Owned a bar. Started a beer-drinking game. Wrote cartoon books. Tried starting a cell-phone directory.
His path to porn started with a magazine promoting Carolinas adult businesses in the early '90s. He realized he could make more money on the Web and began a mail-order adult-film business from his Charlotte apartment.
Coffman and his then-wife earned enough to buy a home in Matthews, but a TV news crew busted their business. The neighbors revolted. The business moved to a warehouse.
Computer programmers helped Coffman develop his first video-on-demand site in 2000. AEBN also was envisioned as a TV network. AEBN's first show was a Web broadcast of nude women reading sports news.
It failed, but the video-on-demand business soared -- boosting revenue fourfold since 2002. Coffman is AEBN's largest shareholder, owning 25 percent. He makes more than $1 million a year.
Coffman, divorced with a teenage son from a previous relationship, said he has no qualms about his business.
"Which is worse?" he asked. "Serving alcohol to people about to get into cars, or this?"
Andrew Shain: (704) 358-5164; ashaincharlotteobserver.com
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