The future of the porn industry
 

Summarized: free porn will win.

Not summarized:

At the moment, the traditional online porn industry is losing the fight against the web 2.0 version. There's no denying it - just take a quick look at the Alexa top 1000. Sure, many people in the traditional industry will continue to make great money for years to come, but the "pay to watch" model is doomed in the long run - even if hell freezes over and we defeat those who use content illegally.

Not too long from now, more people and businesses will start figuring out that buying content and distributing it for free is a viable model. Create a youtube-like site, only put full scenes on it, support it with ads and upsells (eg, selling downloadable hd versions), and you're in business.

There is no possible way for the traditional model to compete with that. Sure, certain specific content that isn't available anywhere else will continue to sell, but most of the generic porn sites are doomed.

There are only two things that can prevent this from happening: the end of net neutrality, and worldwide government intervention.

The end of net neutrality could possibly lead to an increase in bandwidth prices, which would give paid porn an edge again. Could, though - there certainly is no guarantee that it will go down that way.

Government intervention is actually likelier. A business model like this would clearly give anyone, regardless of age, even more access to free porn than before. That could upset quite a few people, and could possibly be a reason for governments to tighten the laws, or even to block foreign porn sites which give free access to porn.

The way it looks now, though, the age of the paysite is nearing its end.

:2 cents:

The government will crack down hard and people will be wondering why and porn will go back in to the brick and mortar stores. lol

I'm not too sure. Remember TGPs?

TGP's is not the same thing as giving away full scenes of hardcore porn

Not to us, the porn sellers.

To the government, though, giving out full access to hardcore porn might not be much different from giving out limited access to hardcore porn that still shows everything very explicitly.

If the content producers can't monetize their intellectual property, they will stop producing and there will only be free, amateur content.

With no industry to support free speech issues, the conservative Christians will win because there will be nobody left to challenge them.

Then BS regs like 2257 will kill off the free sites in this country.

Another step in America's march to theocracy......

"the government" you speak of isn't my government. my government accepts porn as normal. Not an issue. No crackdown here.

I would have to say it would suck to be in the free porn business and be living in the US.

sorry its not the same,thats the excuse given but its not the same. The worst it gets,it will reach a peak and then the clamp will come down very very hard. I think all tgp's should cost a buck to get in and that could be credited to a purchase. It qualifies the buyer and it gets rid of 85 percent of the kids.

You make one wrong assumption: If the "pay" porn model die, so does the ability for 99% of the producers to make more, legal porn. There might be a while that people enjoy the back catalog, but it won't be long before the masses will be bored and will become more willing to pay for fresh sexy girls doing naughty things.

The method by which this porn is sold may change, but there will always be a strong "pay" porn business.

As a side note, I suspect that the torrent and tube sites will soon start to fuck themselves over, packing thier sites with viruses, toolbars, and other crap to try to make the most most possible, effectively pissing off all their clients and limiting their futures.

the questions is how LONG WILL PORN CONTINUE the way is CURRENTLY is ...

1-2 years??

This thread really goes without saying.. i meanlook at all those porn youtube sites out there..

Right now they dont care but its gets over the top say 100x worse than it is now. I think that would change. Also lets face it the US buys a large chunk of porn purchased, the government shut that off. It kills a large part of the industry. Also people will say that could never happen it can and at the end of the day no one will stick up for porn.

Tony, you miss it: The US government cannot and will not ban porn. Even Asshat Gonzales was smart enough to admit that some porn was protected free speech. The reason for 2257 laws and similar is because they are trying to make it very difficult to be in the porn business... because there is no legal way for them to just ban porn.

2257 is the federal government's attempt to use burdensome regulation to kill the industry, and is similar in intent to complicated zone laws used to keep adult movie theaters, book stores, and strip clubs out of certain cities. They can't say "no adult businesses", but they can sure make it almost impossible for meet up with the zoning requirements to get a business permit.

well, maybe if those sites that give away licensed content without authorization are penalized, for content theft, and the webmaster community built tube like sites with promo content it should be fine I guess...

Read the post again.

I am actually talking about free sites buying the porn they give away for free.

Sure, that would cause content prices to go down, and it would cause a decrease in the amount of porn being made, but it certainly wouldn't kill 99% of porn production.

I see your points but these are elected officials the pressure gets great because free porn has grown 100x from what it is today. Trust me it will be gone, they wont end porn.They will just end porn on the net, it will go back to brick and mortar, cable TV where it can be controlled by adults.
I wont give examples but I can think of two very easy ways off the top of my head, without much effort.

From your lips to Gods ears. lol

People said the exact same about TGPs

Stop being a pussy. Research. Adapt.

People love throwing the word adapt around, like thats the answer for everything. Giving more and more away is not the answer and its not innovative.

The problem with our industry, its full of short range thinkers and thats going to be our downfall.

"adapt" - that is the simple way of saying "give up or give in". The reality is that the TGP model that was started was similar to Fusker... and guess what, that didn't survive either. TGPs today aren't what the first ones were, that was an unsupportable business model and it was replaced by something else called TGP that is what we have today.

Napster and MP3s... music started out being given away is huge amounts, and that was an unsupportable business model. Too many people, the general public, everyone had napster and was downloading music for free. The music industry pushed and replaced it with such things as Itunes. There is still a huge problem with free music, but the music industry ended up with a pay model that works. yes, the adapted, but they also didn't stand around and let the sites like Napster to just keep going. If they hadn't, the music industry would have pretty much disappeared already.

Give in. Nope. Come up with new ways to make money WHILE protecting copyright, sure.

I'm saying what adapting consists of: moving away from paysites, and moving to free porn.

Honestly, I don't think this has to be a bad thing. It just means the industry will change quite a bit.

I agree with you.

I remember a lot of mainstream internet companies going down the toilet on the give it away for free and ads sales will pay for it model of business.

That's because bandwidth was more expensive and selling adspace online wasn't a well-developed industry yet. These days, we have things like youtube and megarotic showing that giving away stuff for free actually works, when done right.

Yes... Usenet will be the downfall of porn. Lmfao.

i think alot of people will be watching the youtube 1 billion case very closley.

Actually, the book is still being written. These guys are having a helluva time monetizing the video content enough to claim success.

As it stands, unless you are doing the site from a very cheap country, the business model isn't as much about making money as it is about amassing enough traffic to attract investors and buyouts.

Yeah, YouTube probably was a bad example.

I'd say things like Megarotic, Rapidshare, etc. are pretty good examples of the business model apparently working, however. There are tons of sites following their business model.

The limiting factor here are bandwidth costs vs advertising revenues, though. In the long run, bandwidth prices are going to go down, simply because things like HD content require loads of fairly cheap bandwidth.

At some point, it's going to become viable to add the costs of large amounts of (probably non-exclusive) content to the bandwidth costs. In fact, it might already be viable. Either way, when that moment comes, most paysites (except those offering very unique content) are going to get hit hard.

Think of it this way: In the beginning, conversions were great. Then came TGPs. Those had lower conversions, but got lots of visitors. Then came MGPs. Lower conversions again, but these too were willing to sacrifice margins for volume.

What I'm describing is simply the next step in that process: it will decrease margins, but will make up for that with volume. That volume it will get, of course, by taking traffic from the traditional sites.

Megarotic, Rapidshare are poor examples because they use stolen content that costs them nothing. Now take a site where they pay for production and say give it all away and use ads to pay the bills.I doubt that would work.

First off, as Tony said, Megarotic and Rapidshare are both terrible examples, because they are copyright challenged. They have NO production costs, nor do they feel compelled to use the content to promote the site, program, or DVD that it comes from. They are the types of services that are sending us all to hell.

To decrease margin for increased volume is a business model discussion. Giving away dollar bills for free and hoping people will tip you back more isn't a business model. It's insanity. Pre-TGP conversions were 1 in X and life was great. TGPs made more traffic, but conversions dropped to 1 in X times 3, MGPs moved it to 1 in X times 10. When the conversions gets too far out of hand, the cost of acquiring the customers starts to exceed the net income.

I could go on, but safe to say when the business is compressed down to a 5% margin business, very very few companies will be left making porn. That day is coming much closer all the time.

Change or be left behind

They're good examples, because they show that the bandwidth part can be covered. And the bandwidth part is the killer, because it goes up with volume. On the other hand, with enough volume, the content part becomes a lot less costly, since it does not increase with volume.

The volume/margins issue would be a big problem if sites like these were to sell the same stuff they're giving away for free. So, obviously, they should not do that. Instead, they should advertise other products. Even with TGPs, we've seen this - galleries promoting AFF or Fleshlight, for example.

I agree with you that the amount of porn being produced and the number of companies involved in it will decrease, though. Moreover, the quality will drop. American and Western European producers will, most likely, face rough times.

The only companies I see doing well in such a future are the ones that either produce very cheaply - most likely Eastern European, Russian, South American and South-East Asian ones - as well as those that produce very unique products, such as very specific fetishes or very high quality.

Actually to have the amount of content they have , production would be the killer and its not static because it has to be constantly updated. You cant base your theories on thieves.

Also mark my words if free porn becomes mostly what's online countries before that tolerated it wont anymore.No one wants the net to become a big cess pool.

While I don't agree that the "pay" porn model will ever die, it's definately in for a much rougher ride.. I was talking to a model who just got back from a eastern european country and she was telling me about how much more mature the industry is over there. Beautiful girls.. very professional productions... They speak english more and more... and you can shoot all the content for a DVD for probably a 10th of what it costs in NA and Europe. As margins continue to shrink, porn production in NA etc. will slowly die and be transplanted to the cheaper regions. We're already seeing it happen and it will accelerate. As long as porn companies can find cheap talent, the pay for porn model won't go away.

You wouldn't need the amount of content they have to outcompete most traditional companies. Also, remember that this is most suited to large companies aiming for volume. With even a few hundred thousand dollars a year being put into non-exclusive content, they can quickly gather thousands of scenes.

Ironically, the biggest bar to this kind of site right now are the tube sites that steal content. If those are allowed to continue their growth, though, the adult industry is still pretty much fucked (just check out the traffic graphs of youporn and megarotic on alexa). If they are stopped, on the other hand, this model will probably prosper.

In fact, I wouldn't be surprised if, when the tube sites run into legal troubles, some switch to this model.

In the case of unique content, such as specific fetishes or uncommonly beautiful models, I agree with you. Those things are not easily replaced, and often the volume of the "have to have" crowd is too small to justify spending enough on it to draw it away from the paysites.

In the case of generic porn, I see no reason why the traditional model should survive. For the surfer, it is easily replaced by other generic porn, so a free service that offers it will be chosen over a paid one. For the webmaster, it is viable because any piece of content is likely to be relevant to a great many people.

hey everybody look...

the sky is falling.

again.

The sky isn't falling, the industry is merely heading for some large changes. If you actually read this thread, it should be obvious that what I'm saying does not spell the end for the adult industry. At the end of the day, it will still be a multi-billion dollar industry, just a fundamentally different one.

It's a bit odd, how people in this industry believe this scenario is absolutely impossible. On a typical day, one might watch several free, ad-supported television shows, watch a free, ad-supported movie on tv, read a free, ad-supported newspaper (either online or offline), look up something in a free, ad-supported dictionary or a free encyclopedia, look up a free, ad-supported recipe, listen to some free, ad-supported music on the radio, read some free, ad-supported articles, etc.

Why would porn be any different?

That is a temporary deal. Just as porn online seems determined to make itself into a 5% profit business, the modeling end of things always goes to shit as well. Someone will come into the market, pay the girls 20% more to get them to work for him, and the spiral will start. Soon enough, those countries will no longer be the low dollar provider, and everything will shift around again.

Libertine, if megatroic was paying for content, they would go broke. To keep up with the volume of content on that site, they would be shooting probably 50 - 100 scenes a week. That would be something like 50k - 100k a WEEK for content. You cannot base the concept of an acceptable business model on a site that doesn't pay a large percentage of it's true costs. They are covering the bandwidth and making a profit specifically because they aren't paying for content. If they did it all above board, they would be sunk in a minute.

If they were using the amount of content they have now, and only using exclusive content, then yes, they would go broke. But non-exclusive content is much, much cheaper. And yes, people would sell to them, especially if they were buying in bulk.

Hell, a slight drop in bandwidth costs (which, in the long term, is inevitable) would give them enough financial room to purchase tens of thousands of non-exclusive scenes a year.

Of course, right now there simply is no reason for them to buy content.

Id love to see some porn movies with super effects and cool casting. Like that mafia girls movie that was posted here last night. Porn movies today SUCK!!!!!!

There isn't that much non-exclusive available. They would be good for a while, but sooner or later, they would hit the dregs. The appealing part of tube sites is the "you ain't seen this before!" mentality, because it is all freshly jacked from other sites. If they were paying for content, they would hit the wall pretty quickly.

How much content do you think megarotic goes through every day? I am thinking something like 40 scenes a day gets burned there. 14,600 scenes every year. They would have to be buying the rights to a ton of porn of every sort to keep it going and up to date.

Bandwidth isn't a negligible thing, because they are extremely popular with surfers. Think about it. The drudgereport claims 10 million visits per day. According to Alexa, megarotic gets 10 times more visits then drudge. So they are pushing out 100 million visitors per day, 10 clips each, 1 billion clips at say 10 meg each? 10 billion meg of bandwidth daily. You can't tell me that bandwidth is just a rounding error in their business model.

This is a very interesting thread.

As I said before, a legal site doing this would not need to have the amount of content they have to outcompete traditional adult sites. Right now, ironically, the biggest barrier to entry for legal sites doing this are the illegal ones doing it.

As for non-exclusive content being available... I believe WorldWideContent has some 60,000 scenes available. I'm fairly sure that would keep the average surfer happy for a few years.

And no, bandwidth isn't negligible. In a business model like this, bandwidth is the main cost - I already said so earlier in this thread. Compared with the millions being paid in bandwidth, buying content would only be a relatively small percentage of total costs.

Let's say, for the sake of argument, that they're paying a million dollars a month in bandwidth, and making a profit. If that's the case, and bandwidth prices were to drop by 10%, they would suddenly have an extra monthly 100k to invest in content. At $100 a scene non-exclusive, that's about 33 scenes a day - more than almost any surfer would watch.

Bandwidth prices eventually *will* drop by 10%.

that is the biggest reason why surfers don't want to pay, the content SUCKS!
most of it is shot by a fuckwad who is blind in one eye and can't see out of the other!
if this is a straight movie, why the hell is the camera pointed up the guys ass? I want to see the chick that is giving him a BJ. I am straight I like girls.
Most internet porn simply isn't worth paying for.
This isn't the 1990's, anything you put up will sell.
This is 2007 and your production standards had better reflect it or you are going back to McDonalds.