Ich Bin Ein Fraudster
for Klixxx Global Webmaster
As Europe's largest economy and most populous nation, Germany is a natural target for webmasters who want to start making money in Europe. So, what does the German market look like?
The German Market Today
Germany has an estimated population of 82 million inhabitants making an average of $26,600 per person - just a little below the average Joe in the US. There are over 28 million guys between the ages of 15-64 years. In 2002, there were 32.1 million Internet users online in Germany. All of these figures total to a multi-billion dollar market for adult content. The question any adult webmaster wants to ask is, "How do I get my share of that money?" The answer is to understand the key forces leading up to and affecting the market today - fraud and billing fraud.
Fraud
Germany today is a market in turmoil. Greedy, unscrupulous webmasters are responsible. They broke every rule imaginable - including targeting underaged users. The result of no self regulation is government regulation, and plenty of it. Today it is practically impossible to operate as an online adult entertainment company inside of Germany. End users who want to view adult material may soon need to undergo a face to face identity check to comply with new regulations. It is illegal to show adult content of any kind on the Internet in Germany, except behind a members' area.
Billing Fraud
Telecom billing (dialer, broadband solutions and SMS billing) is used by one out of every two adult surfers in Germany. The ease and efficiency of telecom billing in Germany benefited both end users and dialer companies. Then the criminals came on the scene. They auto-connected surfers who clicked on blind links. Auto connecting when the user was not at the computer was also common. Some dialers made it impossible for the end user to end their session. Some companies stole from webmasters by sending webmaster traffic to numbers on which they did not share revenue. Dialer companies changed ISP settings to charge end users per minute, for what the user thought was his regular connection. Some put a prefix in front of the dialer number to fool the surfer into thinking he was not connecting to a premium rate number. Any one of these tricks could lead to a charge of more than $10,000. Surfers cheated by unethical dialer companies were forced to pay their bills, by the national telecom provider, Deutsche Telecom. The no-chargeback policy and weak laws brought massive income to these fraudsters, but they also brought intense government scrutiny.
Now, the government is striking back. The exciting opportunities for SMS billing throughout Europe do not exist in Germany. SMS billing for adult content is currently banned. Today, telecom billing companies must register every dialer before use. One dialer company thought that they could challenge the formerly toothless telecom billing regulator, RegTP. It thought wrong. In one day RegTP showed its muscle by cutting 400,000 of their dialers. Today there are far fewer dialer companies operating in Germany. Only those companies who operate legally, and are large enough to absorb the new costs of compliance, are surviving.
How to profit in Germany?
At this moment there are huge opportunities to make profits in this massive market of more than 30 million Internet users. Many webmasters now believe that the market has hit bottom and is beginning to recover. However, all adult webmasters must deal with the legacy of the big fraudsters who came before. When moving into the market, you need to ask yourself two questions about your billing provider in Germany: "Can they bill legally and effectively in Germany?" and, "Can I trust them?" If the answer is yes and yes, then you are ready to start making money in this high-potential market. Additional steps we recommend for growing revenue in Germany are translating your sites into German and partnering to increase your traffic.
Next month, we bring you coverage from Slovenia - where the hell is Slovenia? or How to make money in a country you've never heard of.
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