First of all, those of you who are flaming Paul for starting a conversation regarding a valid point about this industry should be ashamed of yourselves. Here's a guy who has been around for a long time. Agree or disagree, but for christ's sake show some respect. You guys show little intelligence and self respect by foolishly attacking a veteran in the biz. If you don't like his posts, get the hell out of the thread.
With that said, I think we all agree that the problem is that as technology advances, and the barrier of entry into the business is lowered, the market becomes saturated. When a market becomes saturated, prices drop and in this case the bottom end is free. Let's face it, the days of making money by putting porn (even high quality porn) on a webpage and charging for it are over. In my opinion, Porn must be unique for people to pay for it. It's only common sense that if people can get decent quality for free, they won't pay.
The only thing I can see safely selling into the future are the hardest sites to manage and to successfully create...solo girls sites, here's why. You have a model exclusive to you, People cannot see her anywhere else. You promote her as a personality, it's about the girl, not the act she's doing. You need to make people fall in love with her. Make her their virtual girlfriend. The reason people go see movies with Robert Denaro is that they cannot see him anywhere else and they like HIM. Tube sites and blogs are only trendy delivery systems for the same old porn and they fizzle out relatively quickly. And let's stop throwing the same old porn at different distribution outlets too, nobody is jerking off to their cell phone or ipod...it's still the same old porn.
Other than promoting a particular model, I don't see any niche that is safe forever. Even the reality model got tired and there are a million bangbus copies. Mixing entertainment with porn is one way, but let's face it, people buy porn because they want to jerk off, not laugh.
I say this from fifteen years of leadership and M & A work, and I've had to evaluate company models and industry trends many many times. The only type of porn I see lasting and continuing to be profitable is the FTV model, and that's if they present their girls with personality so they are not just another hot chick because they are a dime a dozen too. The moral of the story is that knowledge, money, and/or drive is not enough anymore, you have to be lucky enough to discover At least that it's my opinion.