The porn industry's biggest threat!
One of the myths about the porn industry is that it is recession proof. Granted it fairs better than most but the porn industry is facing issues greater than the economy…exhibitionists. Amateur porn (also known as free porn) is taking over the internet. Similar to the video game industry piracy is a problem but the big issue is there are people in their homes making videos and posting for free.
Just like all the other media industries Web 2.0 has negatively impacted the porn industry. Unlike the other industries, the cult of the amateur is surpassing the professionals with extreme ease. In previous posts I have mentioned my theory that the porn market is perfectly competitive in the same vain the goods that amateurs create are a perfect substitute good. In fact they are more desirable than the goods produced by the companies because they are free.
In other media industries the substitutable goods are imperfect substitutes such as getting your news from a newspaper or from the television.
The imperfect substitutes that are found in the other industries allow for the companies to really push product differentiation. The quality of pirated movies online does not have the special features found on a DVD. The television online is posted by the same companies that produce the shows so they have some control over creating ad revenue. iTunes is making money off of selling music online.
Unlike the other industries who have found ways to make money online, the porn industry has a much larger issue. There are subscription based sites, on demand options, and there are websites where the actresses interact with fans over a web cam, which all make money but the competition is free. Free clips, films, and girls can be found on the same websites. There are loyal fans in the porn community but for the most part consumers of pornography are not looking to build a connection but are looking to get instant gratification. Three to five minute clips are enough to satisfy many consumers.
The rise of free porn has dramatically impacted DVD sales. In 2006 sales dropped by 11% and things have been dwindling quicker by the year. In the early 2000s the porn industry appeared invincible but by 2010 the largest porn convention which used to take up two floors of a convention center now only takes place on one.
The biggest competitor to the porn industry is the user based websites Youporn and Pornhub. Both websites are in the top fifty most viewed sites in the world, while the sites hosted by the production companies are nowhere near the top. There is a stigma surrounding adult products and the advent of a website which one does not have to leave their home or pay a subscription fee has increased the number of porn viewers. The issue with Youporn and Pornhub is that users upload their own videos or put of pirated copies of films. Similar to Viacom suing YouTube, porn companies such as Vivid want to get their content off of free websites. The odd thing is Youporn is not only destroying the porn industry, but it is making no money in doing so. Just like all other media industries, Youporn is still trying to figure out how to make a profit off a free website.
Some awesome consequences from amateur porn!
The two gifs on this post come from website which shows animals that pop up in amateur videos. Expect the unexpected when you film at home!
There are also websites dedicated to ranking home decor found in amateur porn.
Some people actually make some good side money but not enough to make a sustainable living.
Not awesome consequence of amateur porn.
An earlier post was about AIM which has a mission to keep the porn community safe from STDs. The rise of amateur porn means more people are having sex and highly unlikely they are being tested. The industry has been doing a great job and enforcing health policies while people at home are not.
Child pornography could become an issue. There is no way to verify the age or consent of the participants. The laws are harder to enforce when the producer of the product in unknown.
Other issues facing the industry:
An imperfect substitute might be taking away viewership and it is World of Warcraft. Users are using their computer for something other than looking at porn and spending more than a few minutes on the website as well.
Piracy is a big problem and has been ever since the internet came to be. It is becoming increasingly more problematic due to user based sites where people upload the films and people can watch them free of charge. It is such a problem that the porn community got together and made a PSA.
Other steps the industry has made to combat the cult of the amateur is to create some product differentiation. There are more big budget films being produced and the industry is trying to tap into the female market. Women are more likely to buy a DVD, than watch porn on the internet. A string of films have been made with females and couples in mind.
Diversification is another tool used to create new sources of revenue. There are toys, clothes, magazines, and even video games. None of these things are making up for the loss of DVD revenues but it is helping companies stay afloat.
Only time will tell if the internet will be the end of porn or just a new beginning. Something will have to change on both sides of the spectrum. Eventually the websites will have to generate money or it will become a public service. The adult entertainment industry needs to find out what consumers are willing to pay for and how to use Web 2.0 to their advantage.
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