Last week, deputies in Polk County, Fla., arrested 60 people–including a Disney employee, a man with breast implants, a 15-year-old runaway with a 2-year-old infant, and her pimp–in an online prostitution bust dubbed Operation Curtain Call. A year ago the sensational sting would likely have been the next in a long litany of tabloid-friendly Craigslist crimes, but the deputies told the Palm Beach Post that the prostitution services had been advertised instead on Backpage.com, the Village Voice Media-owned online classifieds site.
When Craigslist shuttered its “Adult Services” section last year, no one was naïve enough to think the move would mean the end of prostitution, but did anyone predict it could save alt-weeklies?
Backpage, which is a fraction of the size of Craigslist, is the only popular classifieds site left willing to host the paid escort and body-rub ads that are often thinly veiled fronts for prostitution. In the month after Craigslist closed its erotic services sections under pressure from Congress and state attorneys general, Backpage enjoyed a half-million-visitor bump in traffic, according to Quantcast, and became the No. 1 publisher of escort ads on the Internet. The Aim Group, a media consulting firm, estimated that in January, Backpage brought in $2.1 million in revenue from erotic services ads alone.
According to Aim Group founding principal Peter Zollman, Backpage, which did not respond to requests for comment from The Observer, has not contested the reports. “We think that’s because we’re underestimating it by so much,”— Mr. Zollman said. “If they wanted to challenge it, they’d have to tell us how much they really make.”
Mr. Zollman said Village Voice Media (VVM) has only been in contact with his office once, via its attorney, who argued that escort ads placed on Backpage are permitted under the Federal Communications Decency Act. The Aim Group claims to be agnostic on the matter of prostitution, and has even criticized attorneys general who try to shut down the sites, but it’s easy to understand why VVM might feel defensive. The Backpage windfall has come along at a crucial time, helping the company to plug a leak from a large legal judgment and keep itself afloat.
For more than two decades, Village Voice Media executive editor Mike Lacey employed a simple, often devastatingly successful strategy for gaining control of the country’s alternative weekly business: acquire the local paper, cut editorial costs (lay off critics, reporters and, reportedly, entire fact-checking departments), pump the paper full of nationally syndicated content and splash an occasional local investigative piece on the cover. It was working like a charm until 2004, when the San Francisco Bay-Guardian sued VVM’s SF Weekly for manipulating ad prices in an attempt to drive the rival paper out of business. According to court transcripts, Mr. Lacey told the staff on his first day as owner of SF Weekly that this was precisely his intention.
Despite facing legendary antitrust lawyers in a state notorious for its aversion to monopolistic practices, Mr. Lacey spent years appealing the court’s award of $16 million, which grew to $21 million with interest, until the California Supreme Court threw out VVM’s petition. During the proceedings, the company revealed that it owed creditors $80 million and claimed it could not afford to pay the award. Lawyers for the Bay-Guardian threatened to force bankruptcy.
In January 2011, VVM and SF Weekly settled the issue privately. Though the terms of the agreement were not disclosed, between the settlement and what one attorney familiar with the case said were legal fees of at least $5 million to fight the case, VVM was likely left with an eight-figure hole burned in its pocket.
Since last spring, the company’s efforts to patch that hole up have included the unthinkable (laying off legendary Village Voice investigative reporter Wayne Barrett in January); the surprising (selling off Kansas City Pitch to Tennessee publisher South Comm, Inc., in mid-March); and the long overdue: shutting down an experiment with a pair of sex blogs that were never publicly launched despite being published for nearly a year.
“It didn’t quite work,” new media director Bill Jensen told The Observer of the Naked City blogs, “and when we get down to doing budgets for the next year, we’d rather take that money along the lines of our core product.”
As with all print media outlets, VVM´s “core product” is changing. Early this year VVM named a new group publisher, Joshua Fromson, formerly of SF Weekly, specifically for his agility with that property’s digital product. He moved to New York and got started earlier this month, helping to launch a national “Best Of” app, which pairs GPS with the city guide content from the papers’ various “Best Of” issues.
According to Mr. Jensen, VVM is better equipped than most media companies to weather the financial transition from print- to Web-advertising models, simply because alt-weeklies were never spoiled by full-page, four-color national campaigns. (It should be noted, however, that many local advertising markets have proven more volatile than the market for national ads.)
”We’ve always had boots on the street,” he elaborated. “We were going after the small, cool bar on the corner and partnering up with them to have small, inexpensive ads at a high volume.”
He added that the complaint that editorial budget cuts have turned alt-weeklies into empty advertising vehicles is beside the point. “The ad is content,” Mr. Jensen maintained. “People are looking at the ads as much as the stories. It’s always been that way.”
By the same token, some readers have noted in recent months that certain stories published by VVM read disconcertingly like ads, pushing agendas that serve the parent company’s interests. For example, the City Pages article “Women’s Funding Network Sex Trafficking Report Is Junk Science,” which ran in all 13 VVM papers last month, criticizes the methodology of a small part of a report by sociological research firm the Schapiro Group, hired by the nonprofit to study underage prostitution. Author Nick Pinto used a candid quote from one of the advocacy group’s directors on the strategic use of statistics to assert that the nonprofit willfully lied to lawmakers. “And it was all done to score free publicity and a wealth of public funding,” he wrote.
Escort ads aren’t the only growth area VVM has found in recent years. Medical marijuana dispensaries have also become vital sources of revenue for alternative weeklies. As Scott Tobias, president and chief operating officer of VVM, told The New York Times, “This is certainly one of the fastest growing industries we’ve ever seen come in.” Which is why it raised some eyebrows that VVM hired a dedicated marijuana columnist, who at one point wrote an open letter to the state of Arizona chastising it for, among other things, blocking out-of-state medical marijuana cardholders from patronizing Arizona dispensaries, a potential advertiser in the Phoenix New Times.
Last week, The Village Voice ran a cover story, “Heroin.com,” about the drug trade on Craigslist. The story included a disclaimer that seemed to indicate some sensitivity to the criticism that VVM is benefiting from illegal activity. “Using the same keyword searches that turned up numerous drug ads on Craigslist’s New York City pages, we found only a single ad, in several variations, offering illicit drugs on local pages at Backpage.com,” the editor and author wrote. “The Backpage ad was repeatedly flagged and taken down, and reappeared over several weeks.”
As Backpage grows in popularity, more news stories have emerged suggesting that the kinds of abuses that led lawmakers to demand Craigslist shutter its erotic-services section are increasingly occurring on the site. In September a former child prostitute sued VVM for knowingly publishing advertisements of her, and later that month 21 attorneys general called on the company to follow Craigslist’s lead and ban escort ads. VVM declined, but offered to continue cooperating with law enforcement officials on cases originating on the site.
The pseudonymous crime blogger Trench Reynolds aggregates news stories about crimes involving Backpage, in part because the stories often fail to get much attention beyond local papers. (And so far they have not been reported by VVM properties.) In April alone, he’s found three stories involving underage persons sold or solicited through the site.
“Backpage says they review, but they haven’t to my knowledge,” Mr. Reynolds told The Observer. “Whatever steps they say they’re taking, it doesn’t seem to me like they’re doing anything at all.”
Note: An earlier version of this story said that the disclosure within the Village Voice’s ”Heroin.com” was anonymously written, it was in fact written by editor Tony Ortega and reporter Joe Coscarelli.