Masters closed the distribution business in 1972 because it was unprofitable. The Stephens Agency was his direct mail operation. While Masters directed and produced films on a contract basis for distributors, he retained the right to sell the loops via direct mail. To distribute his films, Masters established his first adult film business, The Stephens Agency.
It was a 'loop' (an 8mm short film, roughly 200 feet in length, designed to run over and over in peep shows), and starred Jim Cassidy-at the time a popular underground hardcore gay porn star. In 1970, Masters produced his first film, Drilled Deep. By the end of the year, he was producing as many as six magazines a month. In 1969, Masters (then using the pseudonym 'Robert Walters') began producing hardcore gay male nude magazines.