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What to Expect in 2007

What to Expect in 2007

January 31, 2007
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" If this business were a person, s/he would be approaching middle age (with a wife and a couple of kids) and still living at home, unwilling to grow up or move out. "

I don’t make specific forecasts about the porn industry and I am not going to start now, but I have been saying of late (and do believe) that 2007 is going to be a very divisive year, filled with an increased number of lawsuits, accusations of fraud and general mayhem. It won’t be cataclysmic (the biz tends to thrive in chaos), and no one will die, but it is going to feel very much like a painful transition, though toward what is the question. There will, of course, continue to be many substantial business opportunities available to the smartest and most dedicated — or ruthless — members of this weird industry, but the overall sensation (experienced by many) will often be one of uncertainty and desperation.

But the signs of a sort of industry malaise are already more than apparent to anyone who cares to look. Business is down in both the online and offline sectors, companies are increasingly consolidating, being offered for sale or going under, and there is no reason to believe that the forces that have created this low-level depression are going to go away anytime soon. Indeed, they will become all the more pervasive and perpetuate a sense of inevitability combined with a desperate lack of preparation by many members of the industry, which will continue to contribute to what I like to call adult sectarian violence.

Now, to avoid accusations of undue pessimism, let me just say that to a certain extent most of the worst things I see happening are unavoidable because they are the result of market forces beyond anyone’s control. They will not happen because of actions taken by the government or any other external entity, but as the result of technological advances and an increasingly sophisticated and demanding consumer base. It is the pain borne of growth and maturity, something every industry goes through, and which this industry seems determined to put off as long as possible. If this business were a person, s/he would be approaching middle age (with a wife and a couple of kids) and still living at home, unwilling to grow up or move out.

So if we assume that 2007 will be a transformative year whether we like it or not, and that “Adapt or Die” is the motto by which most companies will either survive or not, then the only thing we have to look at is how we individually and collectively prepare for and react to forces beyond our control. The lessons we take from this, and the way in which we face adversity, is of course something not unique to adult but something that informs everything we do. If a company fails to prepare for the future and instead holds on to its current business model come hell or high water, it cannot very well complain about falling behind. If two or more companies attempt to exploit the same opportunity, they cannot complain about the competition. If a company had a virtual monopoly in a certain sector (say, the media) for a number of years, and failed to adapt quickly enough to the changing marketplace, allowing another company into that space, they cannot very well cry (or play) foul!

But cry and play foul they do, and we have not seen the last of it by a long shot, because the field is narrowing, the stakes were never higher and the potential rewards never greater. It is going to be interesting to see what people are capable of as 2007 unfolds.


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