Joe Elkind
12/31/99
Friday morning, Luke interviewed by telephone leading porn webmaster Joe Elkind of the Cyber Entertainment Network (CEN).
Luke: "I hear you are suing rival net porner Brad Shaw?"
Joe: "Brad's got a big mouth. Bigger than mine. And he opened it. And he's got people bashing me and bashing us and I just don't put up with that bulls---. First, he started out with the thing Amateur Beaver. And we told him that we wouldn't let him buy it because we're developing a site amateurbeaver.com. It's trademarked, etc... He bought amateur-beaver.com which is stupid because I am going to wind up getting all the traffic from it anyway when people try to type it in. We told him that if he wants to use it [that domain name amateur-beaver.com], that's fine. But keep it quiet. But he opened his mouth about some s--- and I told people what his problem was. He was pissed because he did not want to spend $100,000 and buy the name amateurbeaver.com. And so he had to go out and dig up his own name and program which is fine. Except he's copying something we're doing.
"So JB [Joe's partner] told him that we were going to sue him... They ended up settling... I wasn't interested in suing him. It was JB who was pissed at him for opening his mouth. And then he has people posting this [negative] stuff [at www.condomproject.com]... If I'm a thief, how come I am still in business? I pay everybody. [Joe and his company CEN have a good reputation for honesty.]
"My partner and I had a meeting the other night and we decided not to sue him. We're just going to go about our business.
"What Brad's trying to do to get into the market is expose other people's weaknesses in their programs. Everybody is going to have a weakness in their program. It's not rocket science."
Luke: By program, Brad and Joe are referring to the programs webmasters use to buy hits. Usually, webmasters pay people a percentage, usually around 50%, of the revenue they get when surfers buy subscriptions to pay sites. Probably the most famous webmaster program, and the one that has paid out the most money, is www.cybererotica.com/money by Ron Levi aka Fantasyman.
Joe: "We have 30,000 accounts which could mean well over 100,000 different referring logs. So I'm going to have some password sites [where sites post passwords to access pay sites for free] and Warez sites [where you can illegally download copied software]... And it is not my first priority to eliminate them. My first priority is to eliminate child porn links that we get... And Brad is on a witchhunt about password sites... And these sites only hurt your business if your site is not password protected. If your site is password protected, you should have no problem. And if you've been in the business for the past three years [like Brad Shaw] you should have a program that protects your site.
"We get over a million unique visits a day [CEN's main site is privategold.com]. I'm not going to pay somebody to monitor my traffic for password sites and warez sites. I'm more interested in monitoring for fraudulent credit cards, making sure that we are up and running and paying our bills. If I'm worred about password sites, I'm not worried about business.
"We're releasing the archives of Hank Londoner and Stephen Hicks [leading Penthouse photographers] at CENcontent.com. Hank licensed us exclusively to sell his content. The main [porn] photographers in the world are probably Hank, Suze [Randall], Stephen Hicks, Warren Tang, and Pierre Woodman from Private... We do all Suze's work also.
"CEN's also opened up a studio in Sherman Oaks and is doing about 30 hardcore shoots a month."
Luke: "What are people talking about these days? DMR?"
Joe: "DMR is done. If you have a recurring database with DMR, you're f---ed. DMR just got an infusion of $18 million and they're starting to process [credit cards] again with somebody else [but DMR recently announced they would no longer process VISA credit cards]. But the stuff they've lost is done. They can't process through VISA their recurring database. So if you have 35,000 members, which some companies have with them, you're not going to get that money. I'm sure Ron Levi [at cybererotica.com] over the course of the past three years has lost seven or eight million dollars [due to problems with his credit card processors such as DMR]. Ron's now processing with Epoch. Most everybody is with Epoch now that has any brains. The FTC and VISA are looking at a bunch of different people [in porn internet because of their high chargeback rates] and eventually everybody is going to have to go to paid trials [instead of getting a free week to look at a site]. VISA is going after IBill next, and then in another twelve months, they'll look at Epoch."
Next I asked Joe about this story from the Washington Post: COLTS NECK, N.J. –– Two Internet penny stock promoters found shot to death had ties to "shady" business dealings, which may ultimately have led to their execution-style killings, a prosecutor said. Alain Chalem, 41, and Mayir Lehmann, 37, were found early Tuesday face down on the bloodstained marble floor of the estate Chalem shared with his girlfriend and her 13-year-old son.
Though investigators have not pinpointed a motive or suspects, Monmouth County Prosecutor John Kaye said the attack likely was at least partly tied to the pair's penny stock Web operation, www.stockinvestor.com, or other ventures. "It was probably related to the victims' business activities," Kaye said, "and the killer or killers feared something else more than the loss of money."
Joe: "I did not know those two guys [killed] but I know somebody who was dealing with them. Those two guys f---ed around with the wrong guys. These stock things are big money and they left a paper trail... It's nothing to f--- around with.
"There's a guy named Jeff Smith in Florida who did business with a company that sells the machines that allow you to trade from home... These three guys finagled $15 million away from that company and they got whacked because of it. End of story. They were stealing.
"Our newest project is non-adult. It is trading cards online. We signed major league baseball, WWF, Nascar, Star Trek and Xena...at cyberaction.com. CEN will do all the marketing for them but it won't be under CEN, it will be under another corporate logo. Because we don't want to mix the adult with the non-adult. We're the only ones who have the technology to do this, along with Upper Deck. We have about a million unique visitors in non-adult every day and we're going to start sending them through cyberaction.com and other projects."
Luke: "Where do you send your non-adult traffic now?"
Joe: "Casinos mostly, Viagra, any kind of health and medicine... We're 75% adult... We hope to make it 50-50%. It's nice to diversify. If you have an adult customer with a credit card, he's a non-adult customer. I eventually want to sell him at a fair price all the convenience, anything from a toothbrush to a car to life insurance. I have a database and I have demographics on him, and I'm selling him a good adult product now, and I am pretty sure the guy will buy anything from me."
Luke: "What's your deal with Private?"
Joe: "We're the only licensed adult internet company to use their content, aside from them. They have someone else doing their feeds. We're allowed to build our sites with their content and pay them a royalty."
Luke: "How happy are you with AVN's handling of IA2000?"
Joe: "Paul's in a tough predicament. He's got to make the video people happy and the internet people happy. I guess he's doing the best he can..."
Luke: "Are you happy with the way IA2000 is being run?"
Joe: "It could be worse.
"My new thing after the millenium is you're to get no comment out of me from now on. We'll see how long it lasts."
Luke: "It seems that profits are going down in the adult internet industry?"
Joe: "Profits are definitely going to go down when everybody goes to paid trials. RB [karasadultplayground.com] is smarter. He's got a very clean system. He's one of the few companies that nobody's looking at him because he's doing all paid trials."
DMR Stops Accepting VISA Cards
At the beginning of 1999, DMR was the top credit card processor for the porn internet. But because of huge chargeback (people calling their credit card company to say they did not order something they were billed for) rates by many of their clients, they've dramatically cutback their role. Now they say they will no longer process VISA credit cards for net porn.
"Everybody is really pissed off right now," says a leading porn webmaster, "because DMR used to be the leading processor for the adult community. They've dwindled in the past year. But this decision is going to hurt a lot of people.
"I think VISA just got upset with the high chargeback ratios [for the porn net] and just pulled their merchant account."
DMR sent out this letter to manyof its customers: Dear Web800/TIPS Client:
In our communications to you last week, Web800/TIPS informed you we were unable to settle VISA transactions, effective December 22nd. We are pleased to inform you that we were, in fact, able to settle all reported transactions through the 27th of December. Payment on these transactions will be forthcoming as we receive settlement from our merchant bank. Web800/TIPS has made the decision to stop warehousing VISA transactions. We are working to resolve the issues, but remain challenged to find a merchant bank. Therefore, we encourage you to seek an alternate relationship to process your VISA transactions. Mastercard and American Express transactions continue to be processed and are NOT affected by this situation.
Here are some quotes by porn webmasters on http://www.condomproject.com/msgboard/
Bald Guy: Actually that is the third party processors that make the $15 or $25 on a chargeback. They do this to fine you for the time they had to mess with your account. Also this is supposed to act as a way to discourage you from bad biz tactics. Visa basically just warns you when chargebacks get high and if you do not fix this they will shut down your account. If I get a surfer claiming fraud, I can
1. Refund the money
2. Argue with the surfer and Credit Company
3. Break down and credit the account.
4. dispute the chargeback with visa
5. Ignore the mail I am sent and let the CB go
6. Go back to a third party billing and get ripped off more by people that are
losing there accounts because with this many webmasters its hard to keep chargebacks
down.
Globiz writes: Adult sites on the net aren't the only victims of the credit card company's over-willingness to do chargebacks. There are e-commerce companies with the same problem. Until Visa and Mastercard quit bending over and saying "ahhh" everytime someone claims they didn't order something, we'll continue to have this problem and the credit card companies will continue to use the excuse that it's the merchants' fault.
Toolz writes: I think you just hit the nail on the head why VISA/MC are not
happy with our industry, see the following scenarios as evidence:
1. Uneducated surfer meets uneducated webmaster: chargeback
2. Uneductated surfer meets educated webmaster: refund, but more than likely
a chargeback
3. Educated surfer meets uneducated webmaster: chargeback
4. Educated surfer meets educated wembaster: refund
So until the whole world is to step 4 chargebacks are inevitable, if the merchant banks continue to chargeback everytime a customer calls and complains, and they will, then we are forced to eat the chargebacks or issue the refund before it gets to that step. VISA and MC are not on our side, they're on the customers, I think it's time VISA/MC were taught a lesson, perhaps by a coalition that if you chargeback everything the companies are gonna get po'd. Case in point: customer buys gifts from EToys, customer Signs for the gifts, merchant back still charges it back, transaction was over the web, WTF? Where do we win...when online merchants control VISA/MC, how do we get to that point? Don't know otherwise I'd be a rich man.
Mark Tiarra, a leader of a porn webmaster group UAS.org, writes: I've generally been the one speaking moderately and not being a "doomsayer" at all - preferring even to present a reasonable position when the doom gets said. I would think my obvious worry over what's brewing with Visa and MC for 2000 might be an indication to some of the "old guys" as to just how real and serious this is becoming.
While I agree that a new billing system would come into play (indeed I have spoken to a couple people who are forging ahead Visa or no), my concern is what it would do to our numbers in the meantime. I doubt most people have the reserves needed to hold out the couple of years it would take for a single system to become as ubiquitous as CCs are now.
The issue is not just how poorly most billing systems monitored their member sites, but also a load of political pressure on Visa and MC that has caused them to continually tighten restrictions to a level that becomes impossible to adhere in ANY non physical signature business.
So... one problem is that we continue to find a way to promote ethical practices in our business (perhaps by not supporting sites that mislead people into joining with your clicks!) and the second problem is that we find a legal way to stop a train that rides on tracks dangerously close to discrinminatory practices from the CC companies with regard to online adult business.
We live in an industry with many quick buck - short sited people that have helped to push us to the point we find ourselves in and it's about time people stopped making it so easy for sites like that to make the quick buck. it's only hurting ourselves in the long run.
I often say that we need to look to history to see what we are about to face (magazine, 900# and video industry history), but we stand on new ground only in that we have here the first adult industry that is so cheap to get into that it can be a cottage industry whereas the mag, 900# & vid - by barrier to entry alone - kept away most quick buck minded businesses with no sense of business practice. The upshot - there is more going on than I can post about without hanging my legal ass on the plank, but suffice to say, we need to get busy or it's going to be a difficult 2000 for many of us.
Viking: My survival tips for the new millennium and CC companies: If you do not mess with the CC companies, then they will leave you alone (no high chargebacks = no big problems) If all CC companies decides not to do bussiness on the net, then wait about 1-4 weeks for a new world wide internet payment system to take over (CC companies started by taking a risk in a undeveloped/unmature market... no matter how bad the conditions might be, there will always be people/companies ready to take a risk... why? bigger risk = bigger profit) If new laws are made to hit CC companies and adult content, then think world wide! People will pay for sex - no mattter in which currency they have to pay...
Netbilling.com: Several of our merchants who have recently switched from DMR to Netbilling Services are telling me that DMR/Tips "MAY" in fact give them their customer databases for import into our system. They are working out the details now, but it may actually be possible. This would be great for you guys if it can be done. I will give the field format and we can do a member import on the same day. We are also offering $95 setup fee to any new DMR merchant in need. We charge only 1.5% and 15¢ per transaction. The merchant bank will charge another 3% approximately. Total will be 6-7% on a average $20 ticket. It's time to take control guys.
Todd writes: Luke, one of the main problems of this VISA chargeback thing is crooked internet porn dealers. They offer you a week at their site for $3.95 or so, then at the end of the week when you cancel, They (the porno site) go ahead and bill you anyway or double bill you, hoping you won't bitch about it since it is porn related. Most porn sites are really fair, but it only takes a few crooks and before you know it all hell breaks loose for everyone, but don't worry, it won't be long til they come up with another way to screw you over. When it comes to Porn, about 80% of the businessmen in it are shady and crooked, so Beware.
7/31/00
Joe Elkind Falls In Love With Farrah
Joe Elkind from CENcash just spent two weeks in Los Angeles moving his servers and other hosting infrastructure from LA to Phoenix. Joe threw a huge party ten days ago at the Woodland Hills home of strip club king Michael J. Peter.
Renting a Lear jet, Joe moved all his equipment Thursday morning, July 20th, from Cavecreek hosting on Mid-Wilshire Blvd to Phoenix.
In addition to partying and conducting business, Elkind also found love in Los Angeles - in the person of tall busty blonde porn star Farrah. They met at a bar on Sunset Blvd.
Elkind's publishing a new webmaster magazine Klixxx for which I'll contribute a column. Klixxx will go out to a highly targeted list of thousands of webmasters who use JoeE's programs.
While in LA, JoeE did business with all the major players including Ron Levi at Cybererotica.com, Rob Gould from Babenet, Hustler and others.
Farrah's now hanging out with JoeE at his headquarters in Fort Lauderdale. She normally resides in Tampa Bay.
"I'm recovering from my boob job," said Farrah Monday morning. "I got them bigger. They look good though. They're now DD.
"He didn't know me and I didn't know him when we first me. We just ran into each other at a normal bar, not a strip bar."
Farrah has three more movies to do for Kevin Beech to finish off her contract.
Farrah: "I went to the show [AVN Expo] and was looking for a contract. But I didn't sign. It was my first year there. I just looked around and gave the word out.
"I'm going down to Pure Platinum to dance. I miss it. It's been a year. I featured in between but there's nothing like dancing. All the attention."
10/26/00
Kevin Blatt, Jeff Miller, Cokeheads and Prostitutes
Luke says: Could somebody please confirm or deny these important allegations about Joe Elkind and cocaine use, and Kevin Blatt and whore use.
Jeff Miller from SunUp Media writes:
2. My comment about Joe Elkind being a cokehead: The statement that I made in regards to Joe Elkind was made in a private conversation via ICQ with Kevin. He was the one that forwarded it to Luke, thus making it public. The only knowledge that I have of Joe Elkind's drug use comes from Kevin Blatt himself. In a conversation regarding the legality of truecelebs, Kevin asked me if Joe could be sent to jail. I told him that under the law, it was possible but highly unlikely. Kevin responded that if their was no jail possibility that Joe would not care, as long as he still made money and had his coke and his pornstars.
Kevin Blatt responds: As for calling Joe a Crack head, he is not a crackhead, Jeff wanted to get some exit traffic from him and when he wouldn't do business he had to resort to calling him a criminal and "crack Head" I think it is sad that with every comment he makes he wishes me well and says I should drop it.
Luke I will NEVER take s--- from someone when I know it is 100% slanderous. The reason I sent the private ICQ was because on your show he said "I Never called Joe a crackhead"
When I produced the document all of sudden he admits it was a private ICQ So which is it Jeff? Am I a liar or are you?
And when did I ever say anything about truecelebs? It was you who said Joe is going down hard and I better keep clear of him for our business sake.
Jeff, Joe E has more class in his little finger than you have in your entirely flabby fat body. Maybe when you can see your dick again, you should think about getting laid, maybe I can arrange for Dennis to get you a whore.....hahahahahahaha
Kevin Blatt called Luke Thursday afternoon.
Kevin: "I vehemently deny ever mentioning TrueCelebs.com [a celebrity site administered by JoeE and CEN]. I swear on my mother's life and my father's life and my life... The comment he made to me was that your buddy JoeE is in a lot of trouble. He stole pictures from Rolling Stone of Brittany Spears and all these major companies and they are going after him and he's going down hard. That's what he [Jeff Miller] said. And I said, JoeE is my friend.
"Then he said to me in the same breath, do you think you could get some exit traffic from him? I'm going to throw our s--- up on his exit console after he talks s--- about our friend JoeE?"
KMan tells Luke: "Ron Levi. He even admits he is a pothead. I'm guessing that 50% of the high rollers, big six, all do drugs. Nobody cares. Nobody cares if JoeE does a line now and then. I don't know. I've never seen him do it. If he says he didn't, he didn't.
Luke: "Did you hear about the CEN controversy on Netpond ten days ago? It seems that CEN was redirecting traffic to dialers and Karas and Vivid."
KMan: "I saw that myself. I didn't see it on Netpond. But I noticed the other day that the backup console to TrueCelebs.com... I'm making a bonus $5000 every month off that site. I just found out that there is some lawsuit going on with that but s---, as long as I am getting paid. If he [JoeE] goes to jail, he goes to jail. Because I don't know what he's doing is legal or not. I put my faith in them. They've got their own lawyers. I will advertise with them until they're told to take it down.
"But I did notice the exit console was going out to Karas and it had a different account number. I thought about it and said, my sites do the same thing. That's one of the reasons he can pay $35 a signup because the people who don't sign up, he gets an occasional signup to Karas. It's got to equate somehow.
"Some people might not be as nice about that. Some people are stingy about their exit traffic. I don't care, with $35 per signup... If I send him $200 worth of backout traffic a month, if that keeps them afloat, by all means. You've got to weigh the scale. You send your traffic to TrueCelebs.com and they're not backing out anyway. I'm sending them blind TGP traffic, which is s---, to TrueCelebs.com and I'm converting 1/190. That's phenomenal."
Jeff Miller writes: Joe Elkind: I stand 100% behind my last e-mail. I do not agree with Joe Elkind's business ethics but I have many friends who are friends of his. I have met him on one occasion for 5 minutes. All knowledge I have of Joe Elkind is from Kevin Blatt, as I stated in my last e-mail. The conversation re: truecelebs is exactly as I have stated.
7/3/01
Joseph Elkind Says No More Internexts
Webmaster Joseph Elkind owned part of the IA2000 internet show which was sold to AVN and became Internext, the most important of the porn webmaster trade shows.
Joe now publishes the monthly magazine Klixxx which is devoted to the porn internet.
Elkind competes with Paul Fishbein's Adult Video News and its monthly magazine AVNOnline. Joe claims Fishbein wouldn't shake his hand at Internext.
Klixxx magazine's layouts, rates and ad card seem to be a direct copy of its older and more established AVN competitor.
Known as "JoeE" within the industry, Elkind writes on Netpond:
Internext Costs:
Advertisment: $5,380
Airfare : $8,140.50
Banners : $21,637.46
Booth : $115,240.27
Business Meals:$378.75
Expense Checks:$10,925
Parties :$43,651
Hotel : $48,567.55
Printing : $3,159.86
Transportation : $398
T-Shirts :$3,778.90
Total: $261,258.17
Thanks Internext............ This does not include any misc costs and the 3 limo busses shared with CEN, SmutCash and Silvercash;-))))) Plus I dropped $40K out of my pocket.... F*ck Vegas....
Webmasters let's get together without spending all these overheads and I can pay $60 @ SignUp! Netmanagement (managers for CEN, SexCheck, Emailbucks, Klixxx, etc) will not participate in Internext anymore.
Paul would not even shake my hand and that pisses me off. Without CE, CEN, ARS, Maxcash, Igallery, Python, Silvercash, Babenet,etc.. THERE WOULD BE NO SHOW!
CEN is pulling and I am sure Igallery is also..total waste of money.. Fly to my house and I will have poker games and girls and traffic deals and content;-))))) See ya'll in Miami.. We do have a booth for fay's show and will be throwing a FREE party at Solid Gold North miami;-))) Who cares? We do! ;-)))
PS- Last year January Vegas we spent $400K! Have a happy 4th!
Mike@SilverCash.com writes: JoeE...I'm with ya.. f--- Vegas..I'm sick of going there over and over again. We too dropped well over $200G's at the show...
AlienX@SinCityFilms.com writes that Sin City spent $12k at the show.
Brad Shaw writes: "I recall hearing CE spent over $1million for a show. Seems like overkill to me. I think we spent about $100k on this last show, which I consider a good investment from the content deals we closed at the show, or will close over the next 2 weeks from the show."
JoeE writes on Netpond: Ask him Luke! I had to grab his [Paul's] hand and make him shake it in front of witnesses...And never doubt me;-))))
Luke ..read the articles in both magazines and maybe THEN you can make a distinction between the 2 medium. Klixxx is geared towards "how to make money on the net". That's what I (we) have been doing since 1996...what experience do they have? NEXT;-)))
Luke- I know more than you behind the scenes bro! Private(PRVT-nasdaq) is completely pissed that they are doing 2 shows in January.. WHY? Webmasters have to pay for his breakup! Next! And yeah I am pissed... freaken' CE had a banner as their booth, everybody is digging into our margins...Webmasters want cash, not Vegas!
Serge Birbrair writes to JoeE: You were not making money on the net in 1996. You were barely making money in 1996, not enough to pay for bandwidth and had to chase poor ISP on the parking lot with your car in the begining of 1996.
In March of 1997 you met Serge who blessed Florida with his visit in his beaten up station wagon and who opened your eyes and POCKET to the magic of RECURRING BILLING! By 1998 you were almost in the Big League and now you are a Big Kahoona! You were not anywhere near to in 1996!
