It's long been taken as a truism in the technology world that when it comes to
exploiting the latest and greatest gadgets and services, purveyors of
pornography have been out there leading the pack, particularly on the Internet.
In fact, it's been estimated that up to 1 percent of Web pages contain the
naughty bits and we didn't really need Google Trends to tell us what folks are
looking for when they search.
Well, according to this story, the industry that made its living and much of
its fame out there on the bleeding edge is now hemorrhaging profits and market
share at the expense of cutthroat competitors and some of that very same
technology - cheap, commoditized camera gear and bountiful broadband.
After years of essentially steady increases, sales and rentals of pornographic
videos were $3.62 billion in 2006, down from $4.28 billion in 2005, according
to estimates by AVN, an industry trade publication. If the situation does not
change, the overall $13 billion sex-related entertainment market may shrink
this year, said Paul Fishbein, president of AVN Media Network, the magazine's
publisher. The industry's online revenue is substantial but is not growing
quickly enough to make up for the drop in video income.
"People are making movies in their houses and dragging and dropping them" onto
free Web sites, said Harvey Kaplan, a former maker of pornographic movies and
now chief executive of GoGoBill.com, which processes payments for pornographic
Web sites. "It's killing the marketplace."
Low barriers to entry: It's a dynamic that would be familiar to many a startup,
in particular, those who arrive a bit too late to any given market opportunity.
"The barrier to get into the industry is so low: you need a video camera and a
couple of people who will have sex," Mr. Fishbein said.
Cheap video camera? ... Check.
People willing to have sex? ... Check.
On camera? ... Not a problem, curiously enough.
The "major studios" say their response to this trend will be to upgrade
production qualities and packaging. It had better work, too, because they
aren't exactly the most sympathetic bunch: I have a hard time seeing them
getting a government bailout ... or even a benefit concert.
