The State of Online Porn

[gonzo]

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.

[Paul Markham]

I recently saw an article that blamed the Internet and legal DVD sales and downloads for killing many high street DVD stores. It's easier to get it from the Blockbusters site than Blockbusters store was the reason quoted.

It costs in BW and servers about 80 cents or less to deliver a DVD on the Net. The cost of duplicating, packaging, delivering to a store is well over $2. How long before we wake up and see the future and realise the main reason that stops us from dominating the porn business is our insistence no putting traffic before members?

Traffic that already exists and looking for porn.

[Jace]

i think people need to stop talking about the money made from porn being available online, but focus more on the money that is lost from porn being available online

I for one am sick of free sites, all of them, fuck them all...it is hurting every aspect of our biz...and even paul, with his magic join links, is surely feeling the strain of sites like rapidshare and pornorip.net

i would love to see in the future 10 years from now and see what the online poirn industry has become

[gonzo]

This could turn out to be a great discussion. Ill play devils advocate and maybe we can all brain storm a solution together.

Ill ask you both and anyone else that wants to chime in on this business problem.

Your brand new to this business and you have a pay site you want to get foot traffic to it so that potential buyers can turn into members.

You refuse to use any form of free site or promotion because it could potentially hurt your business.

How do you do it?

[Jace]

Originally Posted by gonzo

This could turn out to be a great discussion. Ill play devils advocate and maybe we can all brain storm a solution together.

Ill ask you both and anyone else that wants to chime in on this business problem.

Your brand new to this business and you have a pay site you want to get foot traffic to it so that potential buyers can turn into members.

You refuse to use any form of free site or promotion because it could potentially hurt your business.

How do you do it?

well, technically EVERY site is a free site, so you can't other than advertising offline

I guess I should have been specific for the thick heads.....when I say free site I mean sites that give away insane amounts of content for free

like:
rapidshare
shooshtime
torrent sites

this is sad times we are in right now in the online porn industry....the old timers have shot the newbies in the feet and are expecting them walk across the mine field

someone posted this on another board today

Seriously. This is getting to the fucked up stage.

I've been a full time affiliate for many years, earning substantially more than I did as a full time programmer, but it's getting to the stage where you're getting shafted by:

a) search engines - as soon as you are identified as an affiliate site, your domain is finished (times that by 300 sites at the moment all need a total revision / disposal).

b) program owners - no comment.

c) ppc companies. always a discrepancy of thousands of hits per week between supposed clicks, and affiliate program reporting. someone is lying.

d) general spyware / aff code swapping scum sucking pigs

So what is an affiliate supposed to do - create some bullshit review sites, hiding their shallow affiliate facade underneath a veneer of glossy front pages and naff caricateurs for the benefit or search engines? Policeman, I ask you....

Only a few conclusions:

- run your own programs so you can rip a new one for all and sundry like others do
- try to do different things on a weekly basis as an affiliate - for others to rip the idea within X weeks of doing each
- quit
- other

I seriously think the days of Affiliates making a living from this schiz are numbered.

So, what next...:Oh crap

[gonzo]

Complaining isnt a solution though.
And granted Ive complained about these very things 3 years ago. Look thru the archieves here and you will see.

The problem is noone cares as long as they are getting their slice.

That post on the other board left out thieving processors who run away with your money and your full buying client base email addresses to sell or spam away.

Lets peel the layer back more even. Potentially these companies that provide a cascading solution could be your biggest competition. They have remote access to your ENTIRE business plan.

• Where your traffic comes from
• Who your affiliates are and where that traffic is generated
• Which sites preform best
• And finally your paying customer base

No one wants to talk about this either. And I caution you to make damn sure of who you are doing business with in this regard.

Ill toss out one solution. Ive seen one mainstream traffic engine that offers up ZERO content and is pure organic SE rich.

I wonder if the mad scientist Robin Nixon has us all looking in the other direction as he develops this tool for porn? A solid idea if he did!

[Jace]

Originally Posted by gonzo

Complaining isnt a solution though.
And granted Ive complained about these very things 3 years ago. Look thru the archieves here and you will see.

The problem is noone cares as long as they are getting their slice.

That post on the other board left out thieving processors who run away with your money and your full buying client base email addresses to sell or spam away.

Lets peel the layer back more even. Potentially these companies that provide a cascading solution could be your biggest competition. They have remote access to your ENTIRE business plan.

• Where your traffic comes from
• Who your affiliates are and where that traffic is generated
• Which sites preform best
• And finally your paying customer base

No one wants to talk about this either. And I caution you to make damn sure of who you are doing business with in this regard.

Ill toss out one solution. Ive seen one mainstream traffic engine that offers up ZERO content and is pure organic SE rich.

I wonder if the mad scientist Robin Nixon has us all looking in the other direction as he develops this tool for porn? A solid idea if he did!

the only solution as I can see it is keeping everything in house

develop NON-affiliate based sites that you push all the traffic to yourself

I know one couple that spend all day buying spots and promoting their own paysites...they are pulling 400-800 joins a month on their own, to their own sites

now 400-800 joins may not sound like a great deal, but this is pure profit and for a married couple, they don't need 6000 joins a month (but it would be nice)

keep it all in house, period

everyone is buying and selling everything....even when they say they aren't, they are

[gonzo]

Using your solution still requires that pesky free site owner. Granted they arent the massive free sites but I think promo sites are here to stay. Unless the govt moves in.

I know they are useful in other industries.

[Jace]

Originally Posted by gonzo

Using your solution still requires that pesky free site owner. Granted they arent the massive free sites but I think promo sites are here to stay. Unless the govt moves in.

I know they are useful in other industries.

ug, you aren't even getting what I am saying

there is a BIGF difference between sites that offer everything for free and an affiliate site that is free

I am speaking of the free STOLEN content sites

ug

[gonzo]

Originally Posted by Jace

ug, you aren't even getting what I am saying

there is a BIGF difference between sites that offer everything for free and an affiliate site that is free

I am speaking of the free STOLEN content sites

ug

Stolen content is an entire different problem.
DCMA takes care of most siutation except for those fuckers where the law wont reach.

If programs would truely band those thieving fucks there would be no reason for them to steal.

[Jace]

Originally Posted by gonzo

Stolen content is an entire different problem.
DCMA takes care of most siutation except for those fuckers where the law wont reach.

If programs would truely band those thieving fucks there would be no reason for them to steal.

free stolen content sites is what I have been referring to this whole conversation...LOL..said it a few times too

it is killing online porn

[gonzo]

Originally Posted by Jace

free stolen content sites is what I have been referring to this whole conversation...LOL..said it a few times too

it is killing online porn

How do those 2 sites you mention monitize their efforts?

[Toby]

Originally Posted by Jace

free stolen content sites is what I have been referring to...

...it is killing online porn

I couldn't agree more. These sites are ripe with stolen member area content. Large video files and zip/rar files of complete photo sets. Since they are located outside the US it makes DMCA all but useless.