Danni Ashe bucks e-commerce biz model with adult site

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Source: Reuters

By: Monica Summers

(AUSTIN, TX) — Everyone who wants to start a Web site, particularly a site that merges killer content with major e-commerce potential, undoubtedly wants to learn the tricks of the trade from a successful CEO, and the folks who Monday hung on Danni Ashe’s every word were certainly no exception.

Ashe, a featured speaker on two panels at this year’s South by Southwest Interactive Conference here, is the president of a successful Web company that had an estimated $6 million in revenue last year. Typical CEO stuff. The only difference is that on her Web site you get to see her without her clothes on.

Still, despite the inevitable hem-and-haw that might follow the realization that Ashe’s company, Danni’s Hard Drive, is an adult entertainment site, the fact of the matter is that she is the shrewdest of businesswomen who maintains control of every aspect of her company and runs it the way she sees fit.

“It looks just like any other business,” Ashe said of her Marina Del Rey, Calif.-based offices. “If you walked in, until you walked way to the back to the back of the office and you saw the design team you wouldn’t even know you’re in an adult company.”

To be sure, the online sex industry has more recently become a force to be reckoned with, with more than 40,000 entrepreneurs generating as much as $1 billion in revenues annual, according to Forrester Research.

When it was first started, the SXSW Interactive Festival was mostly a gathering of gamers, animators and Web designers who in a series of panel discussions ruminated about the future of the Internet and Web-related trends.

This year’s collection of attendees, however, extends the impact of this conference far beyond that which may have been anticipated all those years ago. What’s also clear is that those who participate are keenly tuned into the consumer-driven fervor the Web has ignited over the last two years.

All of these things combined are what make Ashe’s presence at this year’s conference “right on,” so to speak, as she not only embodies the entrepreneurial spirit that has taken the medium by storm, but also represents the alternative, taboo or underground commodities that freely use the unbridled openness of the Web to promote themselves.

Danni’s Hard Drive (www.danniharddrive.com) boasts 3 million unique visitors every month, 27,000 of those who are paying members who fork over $19.95 per month membership fee for the service. Still, Ashe said she’s anxious to figure out other ways to boost revenue without compromising or resorting to practices that more hard-core adults sites tend to employ.

“We’re taking advantage of the user base that we have as much as we can,” Ashe said. “But the truth is you have to throw a lot of traffic at a Web site to sell a $20 subscription.”

Ashe said she thinks one of the biggest challenges in the online sex industry is that all transactions must be done via credit card, and in order to make the fees you pay to the credit card company worth paying you have to charge a significant amount of money for subscription fees or online sales.

“We think there’s a lot of money that’s being left on the table because you can’t sell people small pieces of things very quickly and easily,” Ashe said. “The day we have a ‘cyberwallet’ that everyone feels comfortable using is the day that we can sell one piece of video or one image 50 cents or a dollar.”

“I think that will open up a lot more business, but right now we’ve really hit a wall,” she said.

Aside from the money-making aspect of her business, Ashe, like any other Web-based consumer site, said she spends a great deal of effort making sure her members and the people who visit her site are not put aside by its content but rather see it as a “warm and inviting” way to enjoy the Web.

“I don’t want people to feel bad about themselves when they visit my Web site,” Ashe said. “A lot of porn sites are very dark and sleazy and degrading in the way they address visitors. I just want people to have fun.”

Having fun has kept Ashe’s company profitable for five years, and though she admits to looking for new ways to boost revenues she said she’ll continue to resist the measures practiced by other adult porn sites that she said have given her industry a bad name.

“There are a lot of negative stereotypes that are out there and some of them are well deserved because of the actions of other people in this industry,” Ashe said, adding that she hopes to continue to inspire young women who enter the adult entertainment industry to make a real business out of their work.

As far as acceptance by the financial world, Ashe said the idea of major financial backing from outside sources and the thought of an initial public offering is “frightening” to her, primarily because she doesn’t want to lose control of the business she’s worked so hard to develop.

“I worry if it would take the edge off,” Ashe, who started her company in 1995 by spending $8,000 on two computers, said. “If all of a sudden you have $15 million in the bank you might not spend it wisely and you could get yourself into trouble.”

“I really love my business and don’t want to lose it.”