A Look Back, A Look Ahead

Stephen Yagielowicz
As 2008 comes to a close, and with it, the Republican administration of George Bush, there is a measured feeling of hope and optimism within the online adult entertainment industry that a Democratically-controlled Congress and new Obama administration will find other priorities than to be engaged in a morals-based witch hunt. While there is some truth that pandering to the Religious Right may not be high on Obama's "to do" list; the far left that makes up a substantial portion of his support base, including feminists, tend to oppose porn — not as "a crime against God" but as "a crime against women and children" — and they may demand a bone in exchange for their support during America's recent election.

But it's really the economy — or more properly, the media-driven fears about its future — that is front and center in the minds of many industry operators.

It's no secret to operators that the adult industry has grappled more or less successfully with a variety of profit-eating issues over the past few years; including a glut of free porn in the form of TGPs, MGPs, P2P, Torrent and Tube sites — the development of each heralding "the end of Internet porn" — along with sharply declining DVD sales; a slow Blu-ray adoption rate in the aftermath of the latest format wars; as well as the rampant piracy interwoven into this declining sales equation. And while most of the other issues impacting the industry can be mitigated to one extent or another — even to the level of convincing someone that knows he doesn't need to pay for porn to buy it anyway. But how do you sell something as unessential as porn to someone that either has no money or is afraid to spend it? The answer, sadly, for many in this industry is "you can't anymore."

Sure, some folks (who can afford it) will always pay for porn — and some of them will pay an amazingly high amount for it over the course of a month — but it's increasingly hard to not only reach these people, but to provide them with something more than they can get for free. For example, the studios and their high-quality content are flooding onto the Internet and bringing with them a level of production value that is sending many of the traditional online content providers reeling. While there will always be room for innovation, the consumer is now faced with so many choices that making a bad choice is no longer the only option — in other words, content saturation in nearly every legal niche or genre is at a bursting point and consumers no longer need to settle for the only offering available in their area of interest. Yet the machine keeps blindly producing its wares.

Thankfully, the old saying that "when you've seen one, you've seen them all" really isn't true; and so an eternally insatiable audience will continue to demand bigger, better, faster and more — driving content production until its no longer profitable to continue shooting — and even then, the amateurs will still be pumping it out…

So what's a company to do in order to succeed in 2009 and beyond; when there isn't a "need" for consumers to purchase its products? While some adult content companies have adopted litigation as a business model, pursuing copyright and other intellectual property thieves for profit; other operators talk about trying to offer advertiser-supported "open member's areas" (despite the ongoing difficulties in obtaining a slice of sponsor's declining advertising dollars); others still are eyeing the overall trend of convergence and consolidation and are positioning their companies as attractive targets for acquisition by larger entities.

For example, Private's acquisition of GameLink provides a synergistic mix of content and distribution with experienced management and the financial strength to weather all but the most prolonged economic downturns. But what about the generic "me too" guy with a free tube script and expensive bandwidth bill — or any of the other countless, marginally profitable online adult and small studio operations — will they be able to survive yet another year? For many operators, the answer will undoubtedly be "no."

But then what? Will a cadre of experienced webmasters, hardened by years on the adult battlefield, turn their skills and infrastructure towards mainstream projects and in doing so extend some of the same competitive influences and business practices that caused their successes and failures in adult? Will groups of smaller, like-minded adult operators coalesce into larger content consortiums in a move to self-consolidate while they can? Will embittered operators turn their attention towards the market and other forces that they perceive as causing them their woes and devote renewed vigor to being competitive? All of the above and more are likely to occur in 2009.

Whether it's lawmakers looking at online age verification and violent Internet porn; filtering systems that keep children — and porn-purchasing employees working behind corporate firewalls — from our wares; a spate of localities trying to tax websites in general and adult operators in particular; or a mass migration of American users to a proposed free — and porn free — national wireless Internet; plus a whole raft of other issues, opportunities and ongoing challenges; it's very clear that the future holds great promise for those able to work it all out.

Of course, I have to believe that if any group of individuals can wield the technical skills and creative inspiration that is necessary to continue operations into the future, it is the adult webmasters that built a multi-billion dollar global industry literally out of thin air. Some, sleepy from years of success and complacency, or of pursuing other opportunities, are poised like sleeping giants; benign while undisturbed, but troublesome when aroused. As some of these players are forced into action, motivated by financial necessity, greed, anger, lust, revenge, or any of the other human emotions, the current industry landscape will change once again. Some of these folks will reenter the adult business; pesky comets swirling around a galaxy of stars — wreaking havoc in the process. Others will simply go away quietly to retire or on to other ventures; while all will be impacted by the loss to our industry's collective brain trust.

In the end, the online adult entertainment industry is merely a microcosm of society as a whole; and the forces that shape the latter also mold the former. How we channel those forces is up to us. I wish you all the best of luck and success in 2009 and beyond.


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