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A quiet neighborhood has unlikely business

Using Netflix as a business model, two men from St. Petersburg offer 5,000 titles of X-rated DVDs .

By SHADI RAHIMI
Published September 5, 2006

	[Times photo: Cherie Diez]
	Todd Miller, above, and David Gnage, both 27, started an online porn rental on 34th Avenue N in St. Petersburg.

ST. PETERSBURG - It was an unlikely place for a vision.

Inside a video store in Hollywood, Todd Miller eyed the curtained "Adult" section.

He didn't see anyone going back there. There should be a better way to buy pornography, he thought.

Miller, 27, had moved to Los Angeles to make it as an actor. After three years, he returned home to St. Petersburg to pursue an entirely different venture.

Today, from a modest two-bedroom cottage in a quiet northeast St. Petersburg neighborhood, Miller sends pornography across the country.

He and David Gnage, 27, have founded an online company they based on the model of Netflix, which mails DVDs to customers who can keep them for as long as they wish. Their venture, which sends pornographic DVDs to customers in 46 states, is called GetNakedMovies.com.

The partners are tapping into an industry estimated by Forbes magazine to pull in anywhere from $6 billion to $10 billion per year from Americans.

Miller has secured $100,000 from private investors and hopes to begin making a profit by year's end.

"It's no different than selling Viagra - it's a business," Miller said. "Sex sells, everybody knows that."

The two St. Petersburg natives know they've chosen a controversial venture.

Their company address is unlisted. Their mostly elderly neighbors and the neighborhood association had no clue what the two tenants do.

"Porn is not something we want in our neighborhood; we're pretty conservative here," said Dennis Shea, the president of the Five Points Neighborhood Association. "I'm not sure we'd protest in front of the house, or take legal action to run them out, but I think we'd want to know about it so we can monitor and make sure that's all that's going on."

Told of the business, neighbors were surprised, but few said they were upset. Shortly after finding out, Joel Ferretti, 40, went to the house to introduce himself to Miller.

"It doesn't bother me," Ferretti said. "As long as my kids don't have to deal with it and they're not flaunting it out on the front yard, it's fine. If they were doing drugs or running hookers out of there - that would be different."

Miller and Gnage launched GetNakedMovies.com in December. In July, they held a coming-out party at Don Leoncio Cigar Lounge, at 340 1st Ave. N.

Smoke drifted between strippers from Bliss Cabaret in Clearwater and 20-something friends who mingled on black leather couches.

On the walls were posters of their site's most popular titles, including the infamous Pirates, a top-selling porn filmed without the city's knowledge last year aboard the HMS Bounty at the St. Petersburg Pier.

Miller and Gnage said they've grown nearly comfortable enough to answer without hesitation the question: "What do you do?"

Still, not everyone gets a straight answer.

They are familiar faces at their local post office, where they send out about 30 DVD rentals a day. But when they were asked once what they were mailing, they replied "digital media," Gnage said.

"It's just, you're never sure how you'll be treated," he said.

Their parents also use the "digital media" phrase when asked what their kids do, Gnage said. But he insisted that both families are fiercely supportive of the venture.

Miller and his parents joke about the explicit titles.

But first, Gnage had to convince his parents that leaving his job as a business banker at Bank of America for a career as a porn entrepreneur would not blemish his resume.

He said he was immediately sold when Miller, a high school buddy, first mentioned his idea about a year and a half ago.

"I was completely flabbergasted no one had thought of this before," said Gnage, who received a business degree in 2002 from the University of Florida. "I started to research."

He's a member of Netflix, which does not rent adult films. He used the Netflix model to design his company.

After moving back to St. Petersburg last September, Miller raised $100,000 for his venture. That's five times the amount of startup money that porn mogul Steven Hirsch had in 1984, when he co-founded Vivid Entertainment Group, a porn production company.

Vivid Entertainment now grosses about $100 million annually.

"What's nice about the adult industry is if you're creative and are willing to work hard, you're going to be successful," said Hirsch, 45.

Vivid sells its titles online and to stores, and distributes its films to cable and satellite channels, which may soon rival companies like GetNakedMovies.com, Hirsch said.

"I'm not sure in the long term that people are going to be receiving their content via the mail," he said. "But for now, it's a good method of distribution. Most cable systems offer only 24 to 48 movies per month."

Miller and Gnage offer 5,000 titles on their site, divided into 50 separate categories.

"If the industry wasn't as strong, I wouldn't be interested," Miller said. "But there's a demand. There's stores all over the Tampa Bay and they're not going out of business."

They have 265 customers, most of them Floridians and about 35 percent who are women. They hope to have 1,000 by the year's end.

Their aim is to lure those who want to watch DVDs on their TV but are weary of the sectioned-off "Adult" area of regular video stores, Miller said, or big box triple-X mega-stores with sleazy atmospheres.

The site offers five levels of membership. Like Netflix, customers can keep rentals as long as they want.

It's been nine months since the friends launched their site, and now they're vying for the top slots on search engines lists.

Miller said he believes attitudes about porn have evolved.

"People are getting more liberal about porn," he said. "It would be exciting to see the stigma around it completely disappear."

Porn rentals

Top 5 Most Rented Films at GetNakedMovies.com:

1. Pirates

2. Island Fever 3

3. One Night in Paris

4. Perfect 10

5. Pamela Anderson and Tommy Lee home video

[Last modified September 5, 2006, 00:37:05]