Oh man. I'm so glad I am still up and drunk posting on HN at midnight. Hold on!
So... the (sexy) lead-in is that some performer thought her "career" in the porn industry would last forever. Ha. Enough said about that. Sad but not really interesting.
The meat of the article (lol) is that these free sites all make their money by licensing cheap content (which there is a LOT of) and redirecting traffic to pay sites which pay referral fees (PPA), but the resulting (PPV) revenue is down %50 which has the effect of sucking up (lol) half the money in the pipeline. There are middlemen upon middlemen (hot!) in the porn industry. That kind of drop has shockwave effects through the rest of the industry. Biz 101.
So I guess we're facing a "peak porn" scenario. Future economist PHD's, there's a hot topic for ya.
The existing resources can probably be strip mined for a while. Perhaps the era of get rich quick internet porn sites is over? Dang, I was just about to start one, because I totally read this wired article from 1998 about how that was a guaranteed way to make money on the interwebz. (lol).
Also, any tech geeks out there who can't get laid should remember this: if you hire a girl to have sex with you, that's illegal prostitution. If it's on camera and she signs some forms, it's legal porn! (don't forget your 2257 compliance)
I suspect the changing society has a lot to do with it. Porn used to have to be delivered in brown packing envelopes, and girls wearing tankinis was scandalous. Now we've got 16-year-old celebrities pole-dancing on broadcast TV, and no one bats an eye at crazily short skirts so long as it (barely) covers everything. As we become a more and more sexualized society, the idea of paying for porn seems sillier and sillier.
And as our medium changes, the ideal content size changes. It used to be that you could only get an hours-long movie because that's the format TV and tapes worked in. But you only need 10 minutes of it. So as we move to the Internet, the same thing happens to porn as happened to music - the filler becomes extraneous. I don't need the whole album, I need the singles. I don't need the whole movie, I need the best scenes. There goes at least half of your work.
This moves the "porn formula" from "any decent looking chick in a two-hours-long movie" to "absolute stunner doing a few 10-minute scenes", which completely trashes the industry.
The adult industry has often been the predictor of future trends, given that they were typically earliest adopters for stuff like the VHS, DVDs, and the internet.
What they're experiencing now seems to be an accelerated version of what's to come for other media industries.
I wonder if the solution, at least for the actresses, is to start selling more directly to their fans (i.e. hit the strip club circuit more aggressively while using their films mainly for marketing)?
It's possible, but I find it a bit unlikely. Porn differs from other media in that it's easily replaceable by inferior goods. If someone can get off on watching a 7.0 on PornTube or whatever, you can't get them to pay for an 8.0, you have to have a 10.0 before they'll pay money for it.
By contrast, there's a large difference between even a decent amateur movie and The Dark Knight. Part of this is production costs, but a lot of it is that there's not a diminishing return on "epic" or "action-packed", or at least there's less diminishing return relative to porn.
So while the cost of making a quality production in both fields is falling, it impacts porn much more than it ever will film because there's a differing sensitivity to quality.
> Reliable revenue and employment figures for the adult industry don't exist, since no analysts or economists track it. Adult Video News estimated in 2006 that it was worth $13 billion...
Those two sentences together seem bizarre. Estimated at $13B, and yet no analysts or economists are evaluating the business? That can't just be because of a puritan aversion to porn...?
> Those two sentences together seem bizarre. Estimated at $13B, and yet no analysts or economists are evaluating the business? That can't just be because of a puritan aversion to porn...?
Analysts make their money selling research to investors and the like. Since very little of the porn industry is public (Playboy, Hustler, and Penthouse) and there's little chance of that changing, there's no market for research.
Whatever happened to the planned Penthouse/FriendFinder IPO? It actually had some significant coverage in the industry, and would have been the first significant public porn company (aside from some of the mainstream media companies that have soft core porn subsidiaries).
Porn seems to hold universal appeal to tech entrepreneurs. I think every startup founder has a backup porn plan. Seems like even in porn you have to actually run a good business, and deal with competitors and the ever present reality of being killed by "free"; just like any other kind of web-based business.
Wait just a minute, here, Joe - what is your "backup porn plan"? I actually haven't ever come up with one and am intrigued (a) that you have one, and (b) that you think others have one. :)
I know others have one. It's a pretty common topic of discussion at startup events around the valley, including among YC companies.
Even pg, tlb, and rtm had a plan for pr0n when they were doing Viaweb (a pretty good one, too).
That's not to say most folks take their porn plans seriously...it's just a way to blow off steam over the occasionally tedious aspects of running a "straight" business.
My open source porn business model is going to blow everyone away. Traditional models will suck. When open source goes down on the porn market, traditional pornographers will either take it in the ass or wipe themselves down and adapt to a wide open market, at which point more people will tell the tight proprietary porn market to jerk off.
Much the same way that texting was a built in feature of cell phones before twitter came along?
What would you call a service that sent short porn messages between random people? God knows there's some pun potential in there. But the fact is that cell phone integration with porn is still in it's infancy stage (from what I can surmise). If the trends are heading towards free and amateur stuff, then providing a platform to easily facilitate that would be the place to go.
I think it's the usage model that's still uncertain. Could you do streaming 2-way video from some kind of common chat room? Or would it be more of a twitter model? Or perhaps something more along the lines of RSS feeds?
I still think there's lots of money in porn, it's just that the old business models aren't going to work so much any more.
I always figured that the multi-megapixel camera phone, once ubiquitous, would upend the traditional porn industry. There's got to be a startup in there somewhere providing the shortest route from iphone to porn site, but not one you'd brag to your momma about.
maybe if they had some creativity instead of producing the same old insipid crap...
Well, probably not then either. But there are some exceptions to the same-old. I would probably sign up for this one if they got off their PC horse and split up the men & women's clips. This is actually almost SFW:
This seems silly, there is a huge diversity in porn genres that caters to every niche or fetish you know of or unheard of. What exactly are you asking for? A reboot of traditional Showtime/Cinemax porn titles?
That niche diversity is probably their way forwards. It's hard to compete with a generic free product on RedTube or whatever (unless you literally have a girl who's a 10.0), so you've got to compete on something else. If putting her in a cheerleader's costume or dying her hair green makes her more attractive to your audience, it increases your odds of getting a sale with someone who's otherwise only a 7.0-8.0 and competing against a 6.0-7.0 on RedTube.
Re: maybe if they had some creativity instead of producing the same old insipid crap
Haha, this reminds me of the Kenny vs. Spenny episode where they have competition to create the best porno and Kenny does what he does best.
Porn is like any other business it's certainly not immune to a recession or competition and it's going to take some ingenuity to get them out of the hole they're (pun intended) in like any other industry.
So... the (sexy) lead-in is that some performer thought her "career" in the porn industry would last forever. Ha. Enough said about that. Sad but not really interesting.
The meat of the article (lol) is that these free sites all make their money by licensing cheap content (which there is a LOT of) and redirecting traffic to pay sites which pay referral fees (PPA), but the resulting (PPV) revenue is down %50 which has the effect of sucking up (lol) half the money in the pipeline. There are middlemen upon middlemen (hot!) in the porn industry. That kind of drop has shockwave effects through the rest of the industry. Biz 101.
So I guess we're facing a "peak porn" scenario. Future economist PHD's, there's a hot topic for ya.
The existing resources can probably be strip mined for a while. Perhaps the era of get rich quick internet porn sites is over? Dang, I was just about to start one, because I totally read this wired article from 1998 about how that was a guaranteed way to make money on the interwebz. (lol).
Also, any tech geeks out there who can't get laid should remember this: if you hire a girl to have sex with you, that's illegal prostitution. If it's on camera and she signs some forms, it's legal porn! (don't forget your 2257 compliance)