You might say the pornography industry has been hoisted on its own … well, let’s not go there.
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.
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