TeenRevenue Founder Slaps RedTube With $40M Suit

Thu, Apr 09 2009 04:30pm PDT
LOS ANGELES — Kevin Cammarata’s $40 million lawsuit against operators of RedTube may have legs.

The online adult entrepreneur, who is founder of numerous websites and affiliate programs, including TeenRevenue, claims in a suit filed last month that streaming video site RedTube has unlawfully offered free movies as loss leaders in an attempt to crush the competition.

In his antitrust suit, Cammarata is seeking to have RedTube shut down.

“Now that consumers have the ability to watch high-quality adult videos for free on RedTube.com, fewer are making the choice to pay other adult website proprietors for the same or similar content,” the suit said.

Cammarata’s attorney, Jay Spillane, told XBIZ that because of these loss leaders streamed over RedTube, Cammarata has faced a substantial loss of customers and revenue, leading him to sell his business at an unfavorable price.

“Tube sites have done injury to the business,” Spillane said. “We feel RedTube and other sites like them are crowding out competition when it comes to the online adult business.”

RedTube is currently No. 45 on the Alexa traffic ranking scale but has cloaked itself in obscurity, according to Spillane.

Spillane told XBIZ that his firm so far has narrowed down companies named as defendants and has identified a Hong Kong company as the owner or operator of RedTube. That company does business as Bright Imperial Limited and is located on the 28th floor of a high-rise in the Wachai district of Hong Kong.

The suit, filed at Los Angeles Superior Court, also names as defendants Choopa, which hosts RedTube from Sayreville, N.J., as well as numerous blue-chip adult companies that advertise on the tube site.

Those advertisers that also are named include BangBros.com; Utherverse, which owns RedLightCenter; Generation Financial, which owns Videosz.com; Fling.com; SexSearch; Lalib Limitada, which owns LiveJasmin.com; FriendFinder Networks and Brazzers.

Spillane said that the suit has been amended four times only because it has been difficult finding the real owners of the advertisements, which border the tube site that now offers some content that surfers can purchase.

“Of late, RedTube is offering a premium version, where consumers pay extra,” he said. “But if you look, you’ll see that they still offer 10,000 free videos.”

Spillane said that many of his online adult clients have been furious over the losses incurred by RedTube and similar sites, and his firm had been seeking a bulletproof strategy.

“We worked on several legal theories,” he said, “but the one that seemed most reasonable was unfair competition. We worked on the possibility of copyright infringement but there are technical problems with that.”

Spillone noted that Cammarata, of Calabasas, Calif., also alleged that TeenRevenue videos have been streamed on RedTube without the company's permission.

The suit, which makes claims for below-cost competition, loss leaders and unfair competition, among others, seeks $10 million in actual damages and $30 million in treble damages.

It also seeks a permanent restraining order against RedTube.

XBIZ was unable to reach operators of RedTube by post time.

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