Porn capital of the world

PANAMA. Suppose you're a master pornographer, cashing in on the perversion of others. Where do you go to relax and rest up from your efforts, to congregate with your peers and figure out new ways to fleece the weirdos. To Panama, of course! Every year in the dry season the home of the Canal becomes the retreat of the rajahs of raunch.

They call it the "Panama Summit," and it's very strictly by invitation only. You won't get one unless you're a prince of the industry, and Internet porn is very serious business. There are 400 million porn web pages, with 260 new ones appearing each day. Revenue is $89 per second, which works out to nearly $3 billion a year.

Panama Summits began in 2007. This year's took place at the Decapolis Hotel from February 27 to March 2. Owners and decision makers of 34 of the most successful companies attended. According to a post-summit press release, the "intimate and relaxed setting allowed guests the opportunity to discuss the future of the industry while initiating large scale deals without disruption. One attendee commented, 'This event usually pays for itself in the first 15 minutes.'"

Company names reveal an industry with its roots in the gutter but now rich enough to seek respectability. "Naked.com" attended, and so did "Naughty", and "Nasty Dollars" whose motto is, "Porn Guys That Care." Other outfits in attendance, with much the same wares, have neutral names like Euro Revenue and Gammae and GameLink. Other names like "Big Clicks" and "Video Secrets" are caught midway in the transition.

We call their product pornography. They call it "Adult Entertainment."

Why meet in Panama? The host lives here. His name is Fabian, and he's a European of 40. Besides the Panama Summit, he organizes a similar annual meeting in Europe.

Fabian came here five years ago with his wife and three children. He wanted a US dollar economy with good Internet infrastructure. He and his family love Panama's climate and informal life style.

"Panama has been good for us," he told the Star.

Fabian publishes an industry magazine, but his main business is facilitating online commerce—in theory, online commerce of any sort; in practice, pornography websites.

"Let's say you want a site," he explained. "We'll build and maintain it, upload your content and handle your customer service. We also edit content. Let's say you have 50 CDs you want to modify for the U.K. market. We'll remove the stuff the Brits don't allow. It's not easy. There's a 60-page rule book. We don't provide content, and we don't do billing."

What did Summit participants do besides talk shop? They visited the Canal and lunched at Miraflores Locks. They played golf and went fishing. They chatted with Panamanian professionals whom Fabian had invited to the conclave, and heard talks on local banking and real estate.

The typical company represented at the summit possesses a store of web sites and content which it licenses to affiliated distributors. For example, Metro Content's Internet portal has two entrances, one for surfers who pay to download movies and one for distributors who, in effect, function as shills, directing traffic to Metro's sites and getting in return a kickback for each paying customer. Distributors are the ones who annoy you with spam and aren't welcome at the Summit.

Other companies in attendance provide special services. WebBilling is the PayPal of the industry facilitating payment for customers without credit cards. Falcon Foto has an immense collection of vintage pornographic photos and drawings. Adult Broker brings buyers and sellers of sites, content and services together.

The industry grows by creating more and more distributors, who thereupon create more and more users. Porn, like so much else, can be addictive. Content companies are eager to furnish everything one needs to become a distributor to anyone who has an e-mail address, and not a cent is required to go into business. Many companies produce their own content and advertize for "models" and chat-room participants.

Companies that produce "adult" content, Fabian explained, must comply with United States Law 2257 in being able to identify by name and age every person who appears in its films and photos. The U.S. government enforces 2257 through the banks and other institutions through which web sites bill their clients. Fear of fines and other action makes financial institutions reluctant to provide billing services without assurance that Internet content comes from producers who maintain the requisite information on file.

According to Fabian, a number of companies related to the "adult entertainment industry" have set up shop in Panama. Some employ up to 200 persons. Among these are content producers, call centers, and companies that provide chat and webcam services.

"Does this make Panama a porn capital," the Star asked him.

Fabian thought: "Could be."