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Porn Industry Hits Limits of the "Freemium" Model

August 14th, 2009 @ 11:24 am

Categories: BNET, Strategy, economy

Tags: Industry, Adult Entertainment, Porn Industry, Internet, Strategy, Management, Stefan Deeran

Demand for pornography seems to be still growing, considering that more women are becoming customers, according to a new study. However, like other content producers, the porn industry is also struggling to convert internet traffic into dollars. According to an article in the Los Angeles Times, porn production and distribution revenues are down by 30% to 50% since 2007. The problem: all those amateur producers and aggregators (see the blogger v. pro journalist parallel?) are undercutting the business.

For all the industries that are now pining their hopes on the “freemium” model, which argues one should give most content away for free to attract eyeballs and advertising while also trying to charge for premium content, the porn industry’s struggles might serve as a warning.  Although there are only a handful of “freemium” publishers (the Wall Street Journal, the Financial Times) to study as examples, the adult entertainment industry has been operating under that model since the first sites hit the web. So how has it held up?

It seems the elite actresses have fans that are still willing to pay for their work, according to the Times report. And they can leverage their celebrity statuses to sell merchandise.  It’s the “middle class” of the industry that can’t compete any longer with free.

This suggests that only the biggest and best brands will be able to successfully convert to the “freemium” model.

 
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  •  
    1

    United Systems

    08/14/09 | Report as spam

    RE: Porn Industry Hits Limits of the

    This is one of the few things I would LOVE to see completly outlawed on the Internet! What a waste of time to watch people getting it on or getting it on with themselves for that matter. Talk about unproductive and twisted!

    I understand this is not the point of the article, but freemium is is rarely a good business model unless the premium content holds a huge value over the free content.

    Document templates are such an example: if the document you need to create takes an entire day, and you can download it for $14 to save time and make money, well then thats value. However, watching people have sex longer and in better quality has no long term value when you can watch the short low quality version over and over.

    Unfortunatly, economies partly rely on addiction like that for sustainablity. Opium does real well this time of year... :\

  •  
    2

    Ivory_Soul

    10/07/09 | Report as spam

    RE: Porn Industry Hits Limits of the

    @ United Systems. You think porn is sick? It helps keeps teen pregnancy down, and keeps most gross old men from raping younger woman. Take porn away and I guarantee you rape, child molestation, and teen pregnancies will sky rocket and reach all time highs. Porn is one of the main reasons the internet boomed. You don't remember the porn boom from 1998-2000? Plus there are many filters these days to block it out. Porn will never get banned since it's considered "freedom of speech" and the internet is the only true free world we have.

  •  
    3

    the sensible one

    10/20/09 | Report as spam

    RE: Porn Industry Hits Limits of the

    Completely agree number 2 and the person from number 1
    obviously needs to masturbate. Some people use things to help
    them entice their sexual needs via stimulation from porn, a
    vibrator, or even multiple partners. All I know is that there are
    worse "twisted" things to do besides getting off solo. Look at
    the bright side number 1 you don't even have to do anything for
    your partner, you can sleep and have a headache and they can
    still log on and get off. How nice win, win, right?

  •  
    4

    honkwomp

    11/05/09 | Report as spam

    RE: Porn Industry Hits Limits of the

    This is not a debate about porn folks, it's a discussion about the freemium model for porn Stick to topic! :

    It's hard to make money at something when so much of it is given away for free. There are thousands of places I can get pics of "nekkid people" and sex vids. Any web site, not just porn sites have to ask "Why would someone come to my web site?" It's about providing extra value for the money and always will be. Give folks a reason to come to YOUR site, and you will make money. Does not matter if you are a porn site or Yahoo.

  •  
    5

    JDCAce

    11/15/09 | Report as spam

    Freemium In Games

    The "freemium" model has proved insanely successful in the
    online video game market. Dungeons & Dragons: Stormwind, one
    such online game, had abysmal sales. It required a one-time fee
    of around $50, plus a monthly fee of around $15. A couple years
    later, the developers re-release the game (under a new name)
    with the "freemium" model: All players could play for free;
    however, premium content would be available for a one-time
    fee, or even more content for a recurring fee.

  •  
    6

    awgiedawgie

    12/05/09 | Report as spam

    The trouble is not in the Freemium Model

    Side note: While I don't completely agree with #1, I definitely DISagree with #2. The porn industry, particularly the free portion, makes extended use of girls that are 18 or 19. That just reinforces the notion that young girls are the most desirable sexually. The longer men go without a real live woman, the more likely they are to resort to force, i.e. older men raping younger girls. And the younger girls see how much attention the older teens get through porn, so they want to gain experience so they're really good at it by the time they reach 18. Trouble is, they're not experienced at all when they start, so a lot of them wind up pregnant. I have known women personally who were molested by relatives as young girls - 12 or 13 yrs old - because they reminded their brother or uncle of a porn star. I worked with a guy whose 5th grade daughter had a classmate who got pregnant because she 'wanted to have sex like a porn star.' I've seen first-hand the effect porn has, so don't say porn keeps rape and pregnancy rates down. It doesn't.

    OK, that was free. No pun intended. The trouble I see with virtually any industry, and especially porn, is the ability to get the premium content for free, primarily through torrents. You can do a search for and find nearly anything, from porn to MS Office to ripped copies of DVD's (both porn and mainstream movies), on a torrent site, all free of charge. They get around copyright problems because the content is not actually provided by the torrent sites, but is downloaded directly from other users' computers. Torrent sites also operate using the freemium model, offering more content and higher download speeds for paying customers.

    Think of the old saying 'Why buy the cow when you can get the milk for free?' It doesn't just apply to getting married any more.

  •  
    7

    Mr.Peg

    01/01/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    To argue with #1, #2, AND #6,

    Porn doesn't have an effect on EITHER SIDE of the spectrum. Yes, some people would rather sit in their room and get it off by themselves rather than go out and hit on their friends for sex, but that doesn't mean it reduces OR increases the likelyhood of Pregnancy in teens or rapes.

    People who are going to go out and rape someone are going to do it whether or not the watch porn, it's all about the mindset. People who want to "Have sex like a pornstar" are sexual people. It was bound to happen anyway.

    Common sense or personality and Porn are two ENTIRELY different things. It's like comparing the debate over Pluto to Christmas!

    As for #1, There are some twisted things on the internet related to porn, granted. But that doesn't mean that it's horrible as a whole and should be condemned. Say you had a kid in high school that picked on you. Does that mean all kids in high school are mean and should be given detention on a regular basis to keep them in line?

    #2 brought up a good point. It's a given right to the people and will never get banned. It may be kept under tighter restrictions, but you will NEVER see a ban on porn for the same reason the Prohibition didn't work. People will find a way around it every time.

  •  
    8

    ace02

    01/02/10 | Report as spam

    Freedom = Internet = Problem

    Oh my God. I can't believe in this.
    There are people here who thinks that pornography isn't a sick product of human mind...

    Rape
    Pedophillia
    Incest
    Promiscuity
    Adultery...

    Do i need to say more?
    Thanks to the increasing websites of pornography on the internet, cases like i mentioned above are also increasing in a unbelievable way.
    Nowadays people think that they can do whatever they want at any time.
    If they can't do in real life then they'll do on the internet,after all,internet is freedom...
    And one more thing:If masturbation and pornography is a good thing,then why the hell are so many people that can't stop to masturbate or visiting a porn site for one day?
    We all know that pornography addiction exists,and the results of someone who suffers from this decease can be quite dangerous to our society.
    And the same applies to masturbation.It's an addiction.
    If someone disagrees with me,well...
    Then why don't you try to stay 3 months without see any sort of pornography and without masturbating?
    If pornography is so inoffensive,why we can find on google,forums and websites made especifically for supporting people that are struggling with their own addictions of pornography?
    People that are desperate to return to be what they used to be?
    People that wants to be free,have control on their own body, have a healthy social life out there and of course a healthy relantionship with someone...
    The problem is that we humans think that we can only live with pleasure.
    That what we feel is natural...normal.
    But the real problem starts when we try to disciplinate ourselves and then we find out that we can't,not easily.
    But we don't admit that our own body is stronger than us,instead we say that what we feel,the urge of having sexual pleasure,it's just a natural thing for our body.
    If sexual pleasure was a good thing,then we wouldn't have addiction for it or any things that i mentioned above.
    It's sad how many people nowadays thinks that pornography it's inoffensive...

    And another thing...

    for Ivory_Soul

    Thanks to our freedom on the internet, we have now a considerable increase of child pornography and more than that...
    Kids with 12 - 13 years old having access to adult websites.
    Do you really think that a gigantic warning with an "YES" or "NO" on the home page will keep kids away from these kind of websites? Is this the way that the porn industry uses to keep underage people away from their website?
    It's their parents fault? Really? I don't think so.
    How can you restrict their access to this kind of material if you just said that internet it's a place of freedom?
    That's the problem,no one said that freedom it's for good deeds,actually freedom it's dangerous,wanna know why?
    Laws and restrictions keep us away from doing something that might be offensive for society or from something that might offend or harm someone on our society.
    But with freedom? No,you can do whatever you want with freedom.Including trade nude picures of kids on forums,invite a underage girl by chat online to go to your house for you to rape her,or even having an affair with someone who lives miles away from you through a webcam.
    Yes,indeed freedom is a beautiful thing...

    Internet are made by humans
    Society are made by humans

    At least the latter has laws...

  •  
    9

    awgiedawgie

    01/02/10 | Report as spam

    @Mr. Peg

    So, using your logic - saying "it was bound to happen anyway," you're saying that Douglas MacArthur could've spent his entire life reading nothing but comic books, and he still would have become General of the Army.

    Everything that enters a human's mind, whether by hearing or seeing, makes up what that person is. If a young boy sees his sister molested by someone he really looks up to, he may think that sort of thing is normal, and wind up doing some molesting of his own. But if his sister is his best friend, he may learn to hate the molester. If a man has not been spefically taught while growing up that molesting and rape are wrong, and then spends all his free time watching young girls getting spanked, choked, etc., during sex, and seeing the guy enjoying it, do you really think that doesn't have any effect?

    What a person sees as right and wrong, or if they even believe that there is a right and a wrong, has to start even before they learn to walk and talk. A child doesn't have to be taught to be mischievous - that's engrained. A child does have to be taught that some things, like lying, cheating, stealing, rape, murder; are wrong no matter what. And a child's mind and personality are pretty much set in the first six years of their lives. If they haven't been taught right from wrong, and then they see porn stars having sex with anyone and everyone, and forcing themselves on young girls, they think they can go out and do the same thing with anyone they want, too. So, in one sense, porn does not create deviants and rapists, but it absolutely is a major influence on what people see as normal behaviour, especially if they were never taught what should be normal behaviour.

    Sure, I'd love to take Gabriela Lupinkova out behind the barn and tie her to a tree, because she seems to enjoy it so much. But on the other hand, I know that just going out and having my way with whoever I want to is not only wrong, but foolish as well. However, someone who doesn't know any better may think it's perfectly normal to take a girl who looks just like Gabriela, and have their way with her. After all, she likes it rough, so her cries for help just mean she's enjoying it.

  •  
    10

    honkwomp

    01/03/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    OMG, I CAN'T BELIEVE THIS HAS TURNED INTO A DEBATE
    ABOUT THE MORALITY OF PORN. If you are incapable of
    discussing the subject at hand Porn Industry Hits Limits of
    the "Freemium" Model" then don't post. I do not recall
    reading whether or not it was moral, whether or not it was
    a good thing or bad thing. I recall reading that a discussion
    on porn sites basing their money making model on giving
    away content in order to get hits.

    THere are plenty of places where you can talk about the
    immorality of porn, there are plenty of discussion groups
    where you can argue what porn does or does not do,
    whether it is right or wrong, whether there is exploitation
    etc.
    Why is it that every yoohoo that has a morality ax to grind
    feels that they have a moral right to hijack threads like this?

    Happy Freaking New Years happy

  •  
    11

    awgiedawgie

    01/05/10 | Report as spam

    @honkwomp

    Point well-made. And a point I had even thought about making. And if it weren't for the fact that I have a 13 year old daughter that I'd kill to protect, I would have been able to resist the urge to stray off-topic.

    On the other hand, though, I can't think of any comment threads I've ever read that didn't veer off on a tangent of some sort or other. And it's not just about having a morality axe to grind - the majority of those threads were not based on morals, but simply some controversial, and usually trivial, point relating to a small part of the original post. In fact, a few of them wound up off on a tangent off another tangent, usually making the bulk of the comments completely unrelated to any part of the original post. Politics-related posts are the worst for becoming so disjointed it's almost impossible to make sense of what's being discussed.

    It's like getting 5 million people in a room to listen to a five-minute speech, and then discuss it. I guarantee that an awful lot of those people are going to wind up discussing something off-subject. The problem with the comment thread approach is that everyone can "hear" everyone else's conversations. It definitely makes it hard to read. Reminds me of the movie "Scanners."

  •  
    12

    JohnnyBoy82

    01/20/10 | Report as spam

    @awgiedawgie

    lol awgiedawgie... there are so many things false about what
    you write, and you are extremely biased. Re-read what you
    type before you enter. For example, if one thing was "bound
    to happen anyways", it doesn't mean you can attribute it to
    everything, such that everything in existence was bound to
    happen anyways if things were changed. That's the worst,
    most incorrect argument possible.

    I'm pretty sure if someone a boy looks up to molested
    someone, he wouldn't think it's normal. What gives you this
    idea? Another biased assumption. What you just said is the
    exact same thing you blamed Mr. Peg of doing.

    The list goes on and on and on

  •  
    13

    H0RSE

    01/20/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    I don't see the big problem with porn...people are created through sex. We are also one of the few species that has sex for fun. So if someone wants to have sex or masturbate and put it on the internet, who cares. If you don't like it, don't watch it. Also, what do you guys consider "porn." Do you consider artistic photos of beautiful naked women porn? A lot of websites have thousands of photos of just this. Do you consider them porn sites? I don't. People like sex, and they like watching other people having it...TV, magazines, books and movies, to name a few, all support this idea. And to the poster above who said they have a 13 yr. old daughter they would kill to protect. Tell me something, how did your daughter come into existence? Chances are, it involved sex, and I doubt you stopped having sex after she was born. And I also doubt that when you have sex, it is all candy colored rainbows and unicorns, and nothing "bad" or "impure." So whats the big deal if people do exactly what you did to bring your daughter into this world, except they do it in front of a camera? sounds kinda hypocritical and one-sided to me.

  •  
    14

    awgiedawgie

    01/23/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    @ Johnnyboy82
    You got only one thing right about me. I AM extremely biased. But you ASSume everything else. My bias is based solely on personal observations, not on any unfounded assumptions. It's called scientific study. And you've got the analogy backwards. You cannot say that one aspect of a person's behaviour is bound to happen without applying that same logic to every aspect. That's not an assumption, that, too, is science. And I do go back and re-read what I write, and sometimes I even re-write it to say exactly what I want it to. It appears to me that you are reading what I write already assuming I am wrong, and you have drawn your conclusions to fit that assumption, whether it fits what I have written or not.

    And @Horse
    "candy colored rainbows and unicorns"??? That phrase carries with it a very childlike connotation. So no, my sex was not at all like that. But it makes me wonder what you enjoy. The problem I have observed is not that having sex, or even having sex in front of a camera, is bad, but that porn sends an implied message that it is OK to have sex with anyone you want, and that it has no effect. I never once said that having sex is wrong, so no, it's not hypocritical.

    I have grown weary of this beating my head against a stone wall, so I'll not be responding to, or even reading, any more of your attacks. If you want to think of that as a victory, so be it. But I am not the only one who has done studies on this. Broaden your own minds before you question the integrity of mine.

  •  
    15

    H0RSE

    01/24/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    @awgiedawgie
    "The problem I have observed is not that having sex, or even having sex in front of a camera, is bad, but that porn sends an implied message that it is OK to have sex with anyone you want, and that it has no effect. I never once said that having sex is wrong, so no, it's not hypocritical."

    This is where parenting comes into play...I have been watching blood and gore, cursing, and sex scenes galore since I was 3 yrs. old. And I have seen my fair share of porn, be it magazines, internet, or movies. Yet here I am...28 yrs. old now, engaged and saving myself for marriage. I also don't smoke, drink, or do drugs of any kind. And no, I'm not some religious Bible beating lemming that "found God." I'm Agnostic...I don't have my beliefs because the good lord told me to, I live this way for me...because I know what's right.

    As long as you teach your kids that, "no, it's only a movie," or "it's not like that in real life,"...as long as you show them right from wrong and teach them morals, your kids are going to grow up fine, regardless of what the watch or are exposed to...I'm living proof. You're the parent, do your ******* job.

  •  
    16

    dimensionfifth

    01/25/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    This is really great news, I'm so happy, the world has more important concerns than watching naked people squezzing each other. And by the way (@Ivory_soul), it is porn that increases the rate of raping, child molestation...etc, not the other way round. Take porn away and I guarantee you those raping rates will go down, this is the truth and let the numbers do the talking instead of us; in the west you have those crimes higher than in countries that are banning porn coz in those countries it is...banned!!! Google it if u want.
    Moreover, I think it's stupid talking about a problem that is based on another problem (talking about the problem of porn industry going down while leaving the main problem; that will be porn shouldn't exist in the 1st place!)

  •  
    17

    bolachar

    01/26/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    As an avid watcher of free porn, I have to say this doesn't surprise me.

    Porn faces a specific problem in that users don't come to the website to kill time or see an interesting interview, and thus the ads are ignored. The ad based model simply doesn't work for porn.

    I personally have no attachment to specific porn stars and would NEVER pay for it (as long as it was available for free [which would include torrents if all free sites swapped to a pay model]), and have no idea how they can possibly monetize a Freemium service.

    I guess they could put some of the "action" for free, and then charge a small upcharge for the ending, but micropayments tend not to work, and no one really wants multiple small charges for porn on their credit card bill.

    It's going to be interesting to see how they change the model to increase revenues. I'm not sure what has to change.

    As for the moralistic outlook on porn, I'm a grown man watching grownups engage in sexual activity. It doesn't make me want to rape/impregnate/murder/molest anyone, nor do I think of women as sex objects. I'm sure the same does not hold true across the board for everyone who watches it, but that doesn't mean it should be outlawed... there are many more important changes our society needs.

    Here's to hoping I can continue to enjoy free porn for a few more years (at least until I have children)

  •  
    18

    chris686

    01/29/10 | Report as spam

    In response to Ace02

    Rape
    Pedophillia
    Incest
    Promiscuity
    Adultery...

    Do i need to say more?


    Murder
    Face
    Pie
    Football
    ... ?
    Yeah, you should probably go in to more detail.

    Thanks to the increasing websites of pornography on the
    internet, cases like i mentioned above are also increasing in a
    unbelievable way.


    Really? Why have reported sexual assaults decreased by 60
    percent from 1993 to 2007? You must have an incredible
    (unreliable) source.

    Nowadays people think that they can do whatever they
    want at any time.
    If they can't do in real life then they'll do on the
    internet,after all,internet is freedom...


    Yes, I'm all about raping people over the internet. Wait, is
    that possible? Can I commit adultery, sleep with my cousin,
    and commit statutory rape too?! Seriously, is there
    ANY logic in your post so far?

    And one more thing:If masturbation and pornography is a
    good thing,then why the hell are so many people that can't
    stop to masturbate or visiting a porn site for one day?


    Guess not. Statistics? I'd like to know what so many
    people means. I'd also like to know what harm jerking it for
    ten minutes a day causes. What, does it destroy families or
    something?

    We all know that pornography addiction exists,and the
    results of someone who suffers from this decease can be
    quite dangerous to our society.


    Oh, I guess it does. Perhaps you'd care to explain how
    masturbation "damages" our society. I'm not sure I've seen
    these statistics, but I'm sure you have some "hard" numbers.

    And the same applies to masturbation.It's an addiction.
    If someone disagrees with me,well...
    Then why don't you try to stay 3 months without see any
    sort of pornography and without masturbating?


    And that proves what? That I'm human? Sexual urges are
    natural. SEX is natural. Duh! It's how are species
    repopulates/expands! Congrats on proving that humans have
    sexual urges though. Your scientific career is definitely
    taking off.

    If pornography is so inoffensive,why we can find on
    google,forums and websites made especifically for supporting
    people that are struggling with their own addictions of
    pornography?


    I fail to see the correlation of forums and offensiveness. I'm
    sure there are forums dedicated to those addicted to race
    cars, cleaning, cooking, and weight lifting. None of these
    activities are necessarily harmful, except in very extreme
    circumstances. On that subject, religious extremism has
    caused many deaths over the centuries. Care to touch that
    subject?

    People that are desperate to return to be what they used
    to be?
    People that wants to be free,have control on their own body,
    have a healthy social life out there and of course a healthy
    relantionship with someone...


    ...What?

    The problem is that we humans think that we can only live
    with pleasure.
    That what we feel is natural...normal.


    Yeah, it is. Actually, natural hormones are released in our
    bodies that encourage sexual intercourse/arousal, and there's
    the natural will to reproduce for the propagation of our
    species. So yeah, it's about as natural as it gets.

    But the real problem starts when we try to disciplinate
    ourselves and then we find out that we can't,not easily.
    But we don't admit that our own body is stronger than
    us,instead we say that what we feel,the urge of having
    sexual pleasure,it's just a natural thing for our body.


    "Disciplinate," eh? You can do what you want. If I want to
    stop something, I do it. Is my "Body" stronger than me? No.
    The mind is greater than the body if one utilizes it properly.
    Apparently this is a strange concept to you though. The way
    you talk, I wonder how often you look at porn, since your
    body is so much stronger than your mind. You must look at it
    ALL the time since you're so willing to submit to your natural
    urges.

    If sexual pleasure was a good thing,then we wouldn't
    have addiction for it or any things that i mentioned
    above.


    Sexual pleasure is a good thing. It's the reason our species is
    alive today. It's a good thing. It's natural. Maybe you
    should try it. It's actually pretty fun. I'm not saying you
    should go out and bang every chick you meet, but you're the
    exact kind of person that goes out spreading the propaganda
    against sex, mandating abstinence and condemning birth
    control. YOU are the problem. By the way, the "things
    mentioned above," is a bunch of bull. It's just your personal
    opinion on the matter (Which happens to be extremely
    ignorant and based on scare tactics you heard in 7th grade).

    One last thing:
    Freedom = Internet = Problem

    Get the hell out of my country. We like freedom in the USA.
    I may not like everyone and their decisions, but I'll be damned
    if I'm going to impede on their freedoms.

  •  
    19

    mondzkie

    02/04/10 | Report as spam

    ,.,.,.hi,..,

    ,.,.,.hihihihih,.,.,
    hihihiih.,.,.,

  •  
    20

    mondzkie

    02/04/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    @awgiedawgie
    "The problem I have observed is not that having sex, or even having sex in front of a camera, is bad, but that porn sends an implied message that it is OK to have sex with anyone you want, and that it has no effect. I never once said that having sex is wrong, so no, it's not hypocritical."

    This is where parenting comes into play...I have been watching blood and gore, cursing, and sex scenes galore since I was 3 yrs. old. And I have seen my fair share of porn, be it magazines, internet, or movies. Yet here I am...28 yrs. old now, engaged and saving myself for marriage. I also don't smoke, drink, or do drugs of any kind. And no, I'm not some religious Bible beating lemming that "found God." I'm Agnostic...I don't have my beliefs because the good lord told me to, I live this way for me...because I know what's right.

    As long as you teach your kids that, "no, it's only a movie," or "it's not like that in real life,"...as long as you show them right from wrong and teach them morals, your kids are going to grow up fine, regardless of what the watch or are exposed to...I'm living proof. You're the parent, do your ******* job.

  •  
    21

    MisterSandman

    02/04/10 | Report as spam

    RE: Porn Industry Hits Limits of the

    #8:

    You need to be "disciplinated".

    As for the Freemium Model, I am willing to bet that the downturn in paid porn is because it has become like many things in this economy - unaffordable.

    Oh great, now we have a three-year-old participating in this conversation (#19).

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