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The State of Online Porn

Every second, nearly 29,000 Internet users are viewing porn. Every day, 260 new porn sites go online. Digital Journal investigates the reasons behind the proliferation of porn, and what the future holds for the business of Webrotica.

Digital Journal — Porn made the Web. It’s a bold statement, but it’s not illogical. When the Internet first graced home computers worldwide, it was the porn business that overhauled its operations to better serve skin seekers. If you thought video streaming is new, wake up — online porn sites were the first to deliver streaming-video clips of actors doin’ the nasty. Porn is used to being the wise early adopter. This is the same industry that single-handedly turned the tide in the VHS-Beta war.

Today, the online sex industry is making more money than sales from music downloads. Over $2.84 billion (all figures in U.S. dollars) in revenue was raked in from porn sites in the U.S. in 2006, compared to $2 billion from the same year’s global online music sales. Does that mean watching porn on a PC is more popular than listening to music on an iPod?

Some more stats will offer further evidence of the monumental popularity of the online adult industry, as compiled by Good Magazine (and seen in the embedded video below): 260 new porn sites are created daily; 35 per cent of all Internet downloads are pornographic; and “sex” is the most commonly searched word on Google.

But you knew all of this already, right? A quick glance in your inbox is evidence enough that XXX-related material is more common than Google ads. While online porn is often viewed as the scourge of the Web, it’s rarely seen as a powerful industry building wealthy empires as quietly as possible. You won’t see cyber-porn entrepreneurs gracing the front page of The Economist, and for good reason — as widespread and common as online porn is, people don’t want to talk about it.

“There’s enough stigma attached to the online porn industry that prevents the big players from coming out of the shadows,” says Frederick Lane, author of Obscene Profits: The Entrepreneurs of Pornography in the Cyber Age. And although many companies remain private, they are accumulating enough revenue to dwarf many other e-commerce businesses.

“Maybe we’re not seeing the incredibly high profits during the heyday of the late 1990s,” Lane points out, “but now we’re starting to see increasing revenue with the trend of specialization. Niche sites, catering to users with unique fetishes or fantasies, are doing very well.” Lane also believes user-powered sites, like PornoTube.com where members can submit home-made videos, are creating a sense of community that will likely surge these sites to impressive heights.

“If someone can submit his photos and get 10 comments on them by the end of week, that’s exciting to that user,” Lane says.

As a journalist who tracked the adult industry, Lane has observed how competitive the online porn market has become. Times have changed, though. “At first, a company wanted to prove their bank account was bigger than the other’s. And it was cutthroat in terms of hiring the best programmers and personnel. But with the social stigma attached to porn, an ‘us against them’ mentality kicked in and online-adult companies started working together and swapping traffic by exchanging banner ads on each other’s sites.”

But today, the political climate can be more of a nuisance to a porn site than the competition. To the online porn execs, the Child Online Protection Act is noble legislation easily abused and turned into a Pandora’s Box. Created to protect minors from sexploitations, the act has often been cited to cast judgment on adult sites that display only adult pornography, with no children. While the act was passed a decade ago, it has never been enforced, mainly because the federal courts aren’t certain it’s entirely constitutional.

“This isn’t about the Bush administration today, but about the social conservatives dictating what we should view for the past 30 years,” Lane asserts. “The government wants to make a decision for us, even though individual families should making those decisions.”

There’s another crucial difference between online porn and another blockbuster media segment. Like Hollywood, for example. While movieland hates online piracy, the porno biz embraces it, using “hot” DVDs to spread some word-of-mouth marketing about popular adult companies. The more downloads, legal or not, the more click-throughs to adult sites, and the more the porn industry keeps reeling in those eyeballs.

It’s strange how the process behind porn’s economic profits are rarely discussed. When contentious issues start to raise interest with financial movers n’ shakers, watch out. Look at medicinal marijuana’s heavyweight backers. Who’s to say online porn will remain the social pariah for years to come? We could be a long way off from Amazon creating an “Adult” category, but if PornoTube could mimic YouTube, we’re only years from bed-buddy auction site SexBay.