Porn, a dying or thriving industry?

Image by Kounelli via Flickr

I’m going to write a post about pornography today. It’s a difficult thing to write about because its hard to not regress to being childish about pornography; its not something you talk about in polite company, and its an easy thing to snigger about.

However in the US it’s a $15billion industry and has perfected two systems without which the web would be a different place today (online subscriptions and online streaming).

A couple of weeks ago I read an article about youporn (sfw Wikipedia link). This is one of the top 40 most trafficked sites online, and their annual revenue is around $1.5 MM, with 15 million + monthly visitors. That is some atrocious monetization, less than a cent per user per month and with costs attached to it.(and if you look at the proportion that it is of the $15billion you realize that as a smut peddler this is not where you want your business to be going)

Youporn is part of porn 2.0 phenomena, which like web 2.0 means that there is the danger of huge audiences without a clear monetizing strategy. The content is ripped from licensed content (sound familiar?) and amateur content that people post. Associated with the industry there is a host of issues; mostly rights for copyrighted work and age accreditation for amateur content. Which means that in addition to the huge hosting fees you also need a large staff to monitor and take down content.

It doesn’t seem like an easy way to make money (on a related note I once interviewed someone who ran paid ad search ads for a porn site, and said he could only do the keyword research and writing ad copy in the afternoon, as it turned his stomach a little in the morning). The rest of the industry is up in arms about these cowboys devaluing their product, pirating it and removing all their revenues from DVD sales and online subscriptions. (DVD sales are falling the fastest). They’re trying to create premium content (one of the latest movies a rip-off of Pirates of the Caribbean cost $3MM, and apparently made this back). However like the music industry there is a lot of head in the sand behavior about how to best approach this. If content creation and distribution is democratized, then what are the studios offering that you can’t get elsewhere. It’s a
conumdrum that the internet is causing with the movie studios, music industry, newspapers and numerous other industries.

So what are my conclusions and recommendations for the industry? I think they like the music industry are doing things to differentiate their content from that that is available online; one person’s box set with 180g vinyl is another person’s hi-def big budget porn epic with DVD extra’s. One thing that porn doesn’t have which music does it the touring revenues which seem to be supplanting the content sales (Coldplay are charging eur110 for their cheapest tickets for their concerts at a a Dutch football stadium, and they’re playing four nights. That’s a lot of handbags for Gwyneth). I’m not sure how this could be done without breaking a lot of decency laws, but we know that there is a core of under-fans who will pay for the extras; watching movies being made, tours, autograph etc (as this is a family blog I won’t speculate further). Similarly I’m interested if they led the way in the past if the porn industry will crack the monetization question within web 2.0 (which is apparently freemium, but we’ll see)
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