July 2–9, 1998

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Groans versus GIFs

The phone sex industry feels the heat from the Internet

By John McCalla

		Telephone sex lines are at least a $1 billion-a-year business and growing.

Just who is panting through your telephone and, more importantly, in this age of the Internet, is anyone listening?

There are still many phone sex buyers out there who prefer to hear a voice over getting an Instant Message or photo on AOL. (And, apparently, if phone fun might be good enough for Monica "Vox" Lewinsky and the president, it has far from lost all its cachet.)

As for the gifted gabbers, they are as diverse as the phone operators at a 911 center, maybe a little perkier—the young woman putting herself through college, the girlish woman next door, the single mom, the aging adult film star getting on with things.

These images, thanks to Spike Lee's Girl 6 and Robert Altman's Short Cuts, which featured an unforgettable Jennifer Jason Leigh changing diapers while moaning and groaning into the telephone, have replaced any misgivings people might have had of voluptuous, cherry-sucking starlets sitting on fluffed pillows and holding antique phones.

And the new stereotypes are true, confirms Jane Hamilton, better known as Veronica Hart, her adult film nom de plume.

Hamilton now runs the show(s) at the Chadsworth, CA-based VIA Pictures, video producers with a heavy hand in adult telephone entertainment. She won't disclose her numbers, but says business has remained somewhat steady over the years since Internet chat rooms have exploded in popularity.

"Maybe our business has decreased slightly," she says. "And perhaps the Internet could be a factor." To counter the competition, VIA has done what many companies have done and set up its own Web sites, which advertise their phone lines.

However, Hamilton noted, not much crossover appeal goes on with the two very different mediums. Some customers need to hear a voice, and some are very visual, she says.

"It's a good business," Hamilton purrs, and you're inclined to agree. Most industry resources figure telephone sex lines are at least a $1 billion-a-year business and growing.

In recent years, much of the industry's growth has been in the interactive chat lines, where automated menus link callers with other callers—a system that eliminates the need for "models" doing the panting.

Such set-ups result in big savings for the service providers—one study estimated that interactive voice response (IVR) sales are growing 22.6 percent per year. It makes sense that companies would prefer them—an IVR call costs about 4 cents; a customer service rep can cost upwards of $4.

The interactive lines are hot in Philadelphia, says Michael Morrissey, marketing manager for several popular Bucks County-based interactive lines, including Gay Live Philly, Tele-Cafe and Night Encounters.

"It's anything goes," Morrissey says of the unscreened fun of hooking up with men and women from your area. "It's a safe, discreet journey. A lot of logic goes into the features to bring people together. And the more hip your line, the more active it's going to be."

Morrissey dismisses the Internet chat rooms as a true competitor at this point.

"On the Internet, you could be talking to a 15-year-old kid or a 70-year-old woman," Morrissey says. "We bring more to the table. It's a lot more active and stimulating to hear someone's voice and be able to move through it all really fast."

Nonetheless, the Internet is aggressively pursuing the adult entertainment market, notes Aaron Seravo, director of advertising for Seattle-based Internet Entertainment Group.

With 43 Web sites, IEG is the largest provider of adult content on the Internet and boasts $30-35 million a year in revenues, Seravo says. Eventually, technology will phase out telephone sex, he says, but for now it's a combination—many of IEG's Web sites refer surfers to a 900 number.

Though IEG started as a phone sex company, it now boasts soaring revenues, and over 1.5 million hits a day on all its sites. And, he says, there are 36,000 to 38,000 other adult Web sites in the game. "Do the math," he says.

Telephone sex has been changing to keep up, says Ted Turina, director of marketing for International Communications, which offers a number of phone sex, dating and chat lines.

"There are so many different types of services that have come about in recent years," Turina says. "At first, it was a recorded sexual fantasy, then there were live operators and now, it's really like voice personals and dating services. It's not even phone sex. It's literally people calling and meeting people."

The Internet explosion, Turina says, is self-propelled with techie-types and unrelated, at this point, to the telephone customer base, which grows at least 8 percent to 10 percent per year, he says.

"It's not a black-and-white issue, but the thing to look at is that a person who likes to pick up his phone is a different type of person than someone who turns on a computer for fun."

However, as technology advances and rapid-speed video conferencing and more reliable interactive visual fun are available to the masses, phone sex may finally meet its match.

Advertising for phone lines in the gay press has definitely dwindled, says Todd Evans, president of Westfield, NJ-based Rivendell Marketing, which buys ads for 185 newspapers.

"It's certainly a steadily declining market," Evans says. "At one time, about 10 years ago, it practically supported the gay press. Now, we devote all our time to pursuing other ads."

Less than 5 percent of most gay papers' ads are adult phone oriented, Evans says. And he does see the Internet as a major factor. "[Phone sex ads] are not the way to go for the long term," he says.

Philadelphia Gay News Publisher Mark Segal says his paper has bucked the national trend and adult ad figures are growing above average.

"We've always had a strong classified section," Segal says. The adult ads, overall, make up a small portion of total ad revenues, he says.

PGN Telepersonals director Rick Lombardo says he doesn't think the Internet has taken business away—and if it has, they're in on it. About a year ago, PGN started its Personals On-line Network and about a quarter of their personals perusers have taken to it, he estimated.

At City Paper, 900-category ad revenues represent about 15 percent of total ad dollars and, as the paper grows, that figure continues to decline, says Publisher Paul Curci.

"We're not building revenue in that area," Curci says. As Web technology advances, the paper's offerings will keep pace, Curci adds.

Competition, not content, has driven growth with little bother from the Federal Communications Commission. While the FCC has a business jurisdiction over the 900 lines, it rarely screens unless a complaint of obscenity comes in, says Robert Spangler, deputy chief of the enforcement division of the FCC.

"Our rules are content-neutral," Spangler says. "Federal law prohibits transmissions of obscene communications, unless the provider has taken certain steps to prevent the message from reaching minors or unconsenting adults."

That's where the popular credit card programs and special pin numbers come in as the providers' defenses, Spangler says. "If they've done those things, then they're protected," he adds.

Do they all take the necessary precautions? No, but unless complaints are lodged, they're pretty much on their own, he says.

"The FCC going after business forfeitures is uncommon," Spangler says. "There have only been a few actions from the FCC and they were years ago."

And, at least some providers say they take the rules to heart. "We monitor our lines to make sure people are behaving themselves," VCA's Hamilton says. "With S/M, you 're dealing with consensual fantasy. But there's no talk of shitting, pissing, rape or rough stuff."