North Carolina’s ‘pleasure’ industry

Two companies keep sexy in style in Carolina’s economy

by Matt Comer  Editor  editor@goqnotes.com
Published: February 5, 2010 in A&E / Life&Style

Tobacco and textiles. Banking and commerce. Education and research. When thinking of industry in North Carolina, one could place a good bet most folks won’t think of porn and adult entertainment or toys and lingerie. But right here at home in the good old Tar Heel State sits two of the nation’s largest adult businesses. It seems we can add “pleasure” to the list of industries making an economic impact in the state.

Based in Hillsborough, just a short drive from where legislators in drab business suits make law, Adam & Eve dominates the world of adult novelties. In 2004, author Eric Schlosser said the company was the world’s largest mail-order distributor of condoms and sex toys in the U.S and founder Phil Harvey has been called “one of the most influential figures in the American sex industry.” In sleepy Hillsborough, Adam & Eve ranks as the largest private employer.

AEBN Communications Director Suzann Knudsen says her company is LGBT welcoming and inclusive.

AEBN Communications Director Suzann Knudsen says her company is LGBT welcoming and inclusive.

But Adam & Eve had an unlikely beginning. A graduate student at the University of North Carolina-Chapel Hill, Harvey established his company in 1970 as he worked to complete a master’s thesis in family planning. The idea was simple: provide couples with mail-order access to contraceptives and other “marital aids.” Harvey had the makings of a booming and successful business.

Despite legal obstacles from a conservative Justice Department in the 1980s, Harvey’s business continued to grow. Eventually, Adam & Eve reached out to the gay market. Today, adammale.com specializes in adult films, toys and other adult products.

The adult market’s outreach to gay consumers is reflected across the board. Another adult business in North Carolina learned some of the same lessons Adam & Eve did. Entrepreneur Scott Coffman worked for years on a variety of business ventures in Charlotte. From comics to drinking games and the first version of the Panthers’ “Prowl Towl,” Coffman’s ideas never really seemed to catch hold. But, in the mid-1990s his luck would change. Coffman founded an online store selling hard copies of adult videos, mostly VHS cassettes.

The business grew quickly and Coffman was soon faced with a dilemma.

“[Coffman] realized his costs were in actually storing the videos and shipping them,” says Suzann Knudsen, AEBN’s communications director. “He realized he could save those costs by just streaming them online. That’s the reason why he got into the video on demand market. It was getting harder to maintain an actual inventory. All we really need now is one copy of the video and we can stream it from there. AEBN really created the pay-per-minute model. There really wasn’t a pay-per-minute model before then. We started it and just kind of made it our own.”

Realizing the potential, Coffman found investors and gathered the required capital. In 1999, AEBN — or the “Adult Entertainment Broadcasting Network” — was born.

Knudsen says her company has grown to become the world’s largest provider of adult videos on demand. They have over 50,000 affiliates worldwide and own several different websites (including xpeeps.com and

pornotube.com). The company also owns the San Francisco-based Naked Sword — the largest gay video on demand theater. In late 2009, AEBN also bought the gay Raging Stallion Studios, also based out of San Francisco.

Only 10 years after its founding, Knudsen says, AEBN is a multi-million dollar company employing 200 in Charlotte alone. Although the company originally focused on straight market, it has grown to include a sizable gay audience.

“It was definitely started straight,” Knudsen says. “That’s where the market was, but as consumers asked for products we went and found it. In terms of how the gay customer compares to straight customers, the gay customer spends more on average than the straight customer does on porn.”

Because of the gay demand, AEBN has an entire department devoted to it.

“They know the market, the niche, the stars and studios and all the major players,” Knudsen says.

Working in the adult industry is different from mainstream companies, Knudsen says.

“In a lot of mainstream companies there is this sexual tension,” she says. “In the porn industry sex is completely off the table, because that is our industry. We don’t care what you look like naked. We don’t care how you are in bed. We don’t care if you are gay or straight. We don’t need to know anything beyond that. We can actually get down to business and a lot of these relationships become more like friendships.”

For LGBT employees, including Knudsen, who is bisexual, the working environment is accepting and welcoming.

Of their hundreds of employees, Knudsen isn’t the only member of the LGBT community hired to a high-ranking position. While she’s serving as the pubic face of the company to media, other LGBT folks are contributing their talents in other areas including a transgender employee who is head of sales and marketing.

“We see all kinds of content here,” Knudsen says. “After a while you just don’t pay attention to it. You realize sexuality doesn’t impact who someone is as a person.”

When it comes to LGBT acceptance at work, AEBN and Adam & Eve might be the exception to the rule for most North Carolina industries. Although work environments are getting better — the Human Rights Campaign saw an increase of companies with a perfect 100 rating on this year’s Corporate Equality Index — most states and the federal government have yet to pass laws prohibiting employment discrimination on the basis of sexual orientation and gender identity.

Knudsen says her company’s decision to be inclusive of all employees, along with a devotion to its gay consumers, is a just good business decision.

“There is a good synergy built up that way,” she says. “Sexuality really is not an issue in terms of the people I work with.” : :

This article was published in the Feb. 6 – Feb. 19 print edition.