[RawAlex]

EJ, you miss the point, in a most dramatic way. Not to worry, it is a mistake made by plenty of the "free content forever" asshats out there, who can't seem to think past the ends of their noses when it comes to establishing both value and price for product.

Delivery methods do not define value, and they only have a medium level effect on price. People still want porn, they still consume porn like crazy, and porn continues to be one of the main uses of the internet. Social media and a few other things that surpassed porn now, but porn is still one of the things they internet does well. People still want it, it has value to them.

Price is a different subject. A common mistake made by internet asshats is to assume that the internet represents infinite distribution, with little or no marginal costs. While this is somewhat true (only because people don't consider cost of bandwidth servers to send something, nor do they consider the percentage of their internet bill as it relates to a given download). They then apply supply and demand calculations to say that the product has no market cost. A costly error for those involved.

Distribution is infinite only if something is pirated. Without piracy, there is still limited availability. The current infinite distribution is entirely based on piracy. Remove widespread piracy, and suddenly things change.

If you look only at the costs of the medium of delivery, you have already lost the battle, because you failed business 101.

Back in the day, an adult movie title might sell 10,000 units (good movie). Then over time, with more production, that number slipped to about 1000 units per movie, and nearly half of that number was sales to video stores for rentals. The video stores have been dying off, so now a good adult video would be lucky to sell a few hundred copies. The product costs are still pretty much the same, but the sales have dropped (of physical product).

Yet they have infinite distribution, right? Well, sadly, when your distribution costs become very low, your fixed costs per SOLD unit become the significant driver in the calculations. Infinite free distribution doesn't pay for the creation of the product, free distribution does nothing but distribute. They still have to find a way to actually sell enough product to be able to recoup the upfront fixed costs in making that video.

With such widespread piracy, there are few choices in the marketplace right now. Most of the content producers aren't looking for distribution deals or shelf space, they are looking for licensing deals, to resell their product a very few times (maybe even exclusive) and getting out of the way.

The buyers? Tube sites and similar who are using porn not to sell porn, but to sell other things. They aren't interested in porn as a product, only as a lure to get a chance to get someone to buy a dating membership, visit a cam site, similar. If they do sell porn, they are selling the cross sell hell, whacking customers for hundreds of dollars through mazes of pre-checked cross sales, promotional "free" memberships that have more cross sales tied to them, and in some cases, just purely jamming people's cards.

Basically, tube sites exist because piracy has taken the money out of porn.

The movie industry faces the same issues. Home theater systems are getting better all the time. Widespread piracy means that the latest movies are available online for free, often before they are available on PPV or DVD, usually when the movie is still in theaters. The movie business held it's own in ticket dollar sales the last few years only because of the 3D craze, as people didn't have that ability at home, and were willing to pay over the standard price for the experience. But now with 3D TVs, it won't be long before that advantage is gone, and the movie industry starts back down the path of free fall.

Remember, movie ticket income has remained virtually the same in the last 10 - 15 years, even as inflation and such in the general market has moved up significantly over the same period of time. 2009 saw twice as many theatrical releases as 2008, with only a 4% increase in income. Put together, you get an average income per movie down 50%. 2010 looks to be even more of the same.

I could go on. If you get lost looking at the distribution methods, and only those methods, you will never really understand the situation. Widespread piracy is hurting all content producing industries, and making the economics very tough. People still value the product, but because everyone is offering them a free copy of everything, they don't see the value in paying for it. Until that changes, the rest of the discussion is moot.