The Economy of Porn

Internet Porn and Economic Similarities to Social Media

The Economy of Porn
November 18, 2015

Commercialization of the Internet took a toll on many traditional industries, forcing them to adapt to the new paradigm or disappear entirely. It also had an effect on non-traditional industries, especially an offshoot of one of the "oldest" ones, so to speak — pornography.

The Internet offered multiple new benefits to customers of porn, such as a massive increase in supply, the potential for greater anonymity, and the ability to connect easily with others having similar proclivities and form communities. It also flooded the market with mostly, if not entirely, free content. How could the local "adult" bookstore compete with that?

The Economist examined the adaptation of porn to the Internet age in a recent article and noted the similarity to social media websites in their evolution. How do we get from porn to Facebook and Twitter? It has nothing to do with the content; it is all about the business model and how money can be made within a particular field.

In the early days of Internet porn, it was relatively easy to make money. Oddly enough, the law worked in the favor of pornographers. Phone-sex lines were required to get a credit card number from their customers to prove they were of sufficient age, thus pornographers had a ready-made e-commerce infrastructure and experience with a revenue stream. The evolution to porn sites was simple. Load the pictures, set up the subscription system for access control and billing methods for payment, and business would follow.

Porn sites were easy enough to find through simple searches, making advertising relatively unnecessary (not that advertising porn is straightforward), and sites could easily be tailored to particular proclivities to distinguish themselves from alternatives and create a loyal customer base. It is estimated that over 3,000 porn sites took advantage of the opportunity in the early 2000s.

As the number of sites grew, it became necessary for a site to stand out. Sites began to give away free "teasers" to attract customers. Meanwhile, amateur postings added to the free content, and clever folks began to aggregate the free material through link collections. Availability of free porn began to take a toll on pay sites.

Expand this philosophy with each technological advancement, and it is easy to see how revenues have fallen off within the porn industry (or so it is thought, as Internet-porn revenue is not generally public information). The evolution of speed, storage capability, and simplicity of uploading/posting information introduced massive amounts of videos and other manifestations of Internet porn that are either free or inexpensive.

Finally, "tubes"— content aggregators that are the porn equivalent of YouTube — began to collect huge quantities of content, making free porn even more readily available. But how is money to be made? Advertising.

The ability to collect data through massive amounts of traffic on the "tubes" means that advertisers can provide highly targeted ads reaching specialized niche audiences, making them far more effective. In turn, content providers are forced to work out deals with tubes to carry their content and give tubes a cut of the revenue from successful click-through traffic.

Do you see the connection to today's social media sites? Social media sites like Facebook and Twitter are on the same path, having evolved from simply linking content into hosting it and providing new services to increase traffic. Meanwhile, they struggle to establish their share of long-term revenue.

A market has huge demand. Thanks to technological advances, free material overwhelms the market and forces participants to find new ways to monetize services. Successful distribution and delivery systems find their role and expand their offerings. Once-profitable content producers are squeezed by the distribution. That model fits both porn and social media reasonably well.

Even though the form may change over the years, porn is here to stay, as is social media. That is one more area of common ground.


Photo ©iStock.com/GVision

  Conversation   |   12 Comments

Add a Comment

By submitting you agree to our Terms of Service
Erin | 11.18.15 @ 21:02
I suppose there is a lot of money to be made in that industry. Sex always sells, right? You just have to be a step ahead of the game to make tons of money.
Amanda | 11.18.15 @ 21:02
Well as it saids, porn is here to stay, there will be always a way to get it out there. So no surprising news here.
Bobbie | 11.18.15 @ 21:03
Funny to think that so much is available for free now, and that "ranches" in Nevada are closing up.
Daniel Dohlstrom | 11.18.15 @ 21:03
This industry has survived so long no change in technology is going to stop it
Beverly | 11.18.15 @ 21:06
To some facebook and twitter is their porn, so I'm not surprised they would follow the same basic ideas.
Carla Truett | 11.18.15 @ 21:07
I don't see porn ever going away. It is a growing industry.
Irene | 11.18.15 @ 21:08
I know they say sex sells but with so many free sites I didn't think many people were spending on porn anymore. You can practically trip over porn on the internet there is so much of it that pops up when you are doing an innocent search and not even looking for it.
Christina | 11.18.15 @ 21:08
Sex sells - I find it interesting that FB and Twitter are evolving the same way, from linking content to creating it.
Alec | 11.18.15 @ 21:12
It's a little sad exactly HOW MUCH advertising is done though. Not just for that and social media. All the "free" sites are constantly adding more and more ads, including unskippable video ads. It makes a lot of money overall but it's upsetting for people who want their content.
Heather | 11.18.15 @ 21:13
What worries me the most is how easy it is for kids to find these sites online. Its harder for them to access it when it's at an adult bookstore environment but when there is no one at home to police what the child is looking up they can find anything.
Leslie | 11.18.15 @ 21:14
It just goes to show that nothing is 'free' anymore. It makes you wonder where advertising is going to show up next considering that it's everywhere already.
Andrea | 11.18.15 @ 21:27
Quite the lucrative business. I used to manage an adult store that would sell thousands of dollars in movies and "accessories" daily.
$commenter.renderDisplayableName() | 12.08.16 @ 04:06
{comment}

  Our Professionals Are Available to Help!

  Can't find What You're Looking For?