The Freeconomics of Porn

From the "Its tough, but somebody has to research this stuff" dept:

Porn is an interesting bellwether for the comms industry, since time immemorial (and I mean immemorial) porn has been a leader of new trends in comms. Given the travails of the Mainstream Media, its interesting to see how this segment is, er, making out. Well, it seems that competition is getting stiffer, as this article in the Los Angeles Times notes:

Industry insiders estimate that since 2007, revenue for most adult production and distribution companies has declined 30% to 50% and the number of new films made has fallen sharply.

"We've gone through recessions before, but we've never been hit from every side like this," said Mark Spiegler, head of the Spiegler Girls talent agency, who has worked in porn since 1995.

"It's the free stuff that's killing us, and that's not going away," said Dion Jurasso, owner of porn production company Combat Zone, which has seen its business fall about 50% in the last three years.

Yes, its YOU! again, destroying an entire industry - User (de)Generated Content at its finest! What is interesting is to see what they are doing to get out of the mire. Firstly, there's the good old Freemium gambit:

Sites like Pornhub, YouPorn and RedTube attract more users than TMZ and the Huffington Post. The porn sites are even bigger than Pirate Bay, the top portal for illegal downloads of movies, TV shows and music.

Frustratingly for porn producers and distributors in the Valley, none of these sites appears to be making much money. Suzann Knudsen, a marketing director for PornoTube, said the site's parent, Adult Entertainment Broadcast Network, uses it to attract customers for paid video on demand.

One wonders how effective the "Premium" bits is proving to be. Mobile is always seen as a salvation:

The only growth market most executives see is mobile devices, since they let consumers watch porn anywhere and in relative privacy.

"Anyone betting against porn being a meaningful driver of traffic and revenue on mobile networks would be making a bad choice based on history," said Charles Golvin, an analyst at Forrester Research.

Diversification into physical goods - the standard advice for musicians - is also occurring, but of course the dirty little secret here is unless you have built up a brand in the good times, you're, well, f*cked:

Adult performers with big followings probably will continue to prosper, since they often work under a guaranteed contract and have loyal fans who buy all their work. Business managers for Belladonna and Tera Patrick, two of the industry's biggest stars, said their clients were using their celebrity to make money in other ways, like dancing in exotic clubs and licensing their name to sex toys and lingerie.

But for the "middle class" of the industry, those opportunities don't exist.

"It seems at this point that if you haven't established a well-known name, it's really hard to keep working," performer Alexa Jordan said.

At least in that respect they are more honest than those who are trying to tell aspirant musicians that flogging T shirts and the occasional pub gig is as viable as selling hundreds of CD's. But, as we predicted in our papers on Freeconomics, when the going gets tough, the tough get going:

Savannah Stern is adjusting to that reality. She's shooting scenes for her own subscription website and planning a tour of exotic dance clubs to earn money from her name while she can. After that, she hopes to go to college for an interior design degree and work in her family's real estate development and contracting business.

Classified ads for "SaaS" (you work it out) still work a treat, but as Craigslist is finding out, costs are rising as people clamp down on it (on Craigslist, that is):

Craigslist will cancel all existing Erotic Services ads in seven days, and start up the new [Adult] category. In other words, it's just a name change.

There is one critical difference: Craigslist employees will be reviewing ads for tell-tale prostitution-friendly phrases.

That is a lot more labour input per classified Ad, and reduces the scalability of the aut-ad market.

Now, one could argue that there is more supply of porn "talent" than musical talent (after all, nearly all people on the planet have their own organs) so musical values should be higher, but given that porn has always been a leading indicator to date, its unclear why it won't still be one going forward.

Update - it just occurred to me that I have yet to see Twitter hailed as a saviour for porn, perhaps its because everything has to be reduced in size.....