It Is a Small World, After All

Stephen Yagielowicz
When looking at the worldwide opportunities in any market, the key issues go well beyond simple supply and demand to include many other factors, such as the customer’s ability to pay for your product or service.

Within the adult webmastering community, this discussion typically revolved around the latest online payment platforms and service providers, but since the world economic collapse, the topic really centers on whether or not the customer has the money to pay.

While here in the U.S., the economic outlook remains challenging enough to occupy operators’ attention, there is a much broader audience for the adult industry’s wares — making the question of “So, how’s the world doing today?” extremely relevant to profit.

We look to the United Nations Development Policy and Analysis Division, which has published its latest World Economic Situation and Prospects (WESP) report, for answers.

This report offers “an overview of recent global economic performance and shortterm prospects for the world economy and of some key global economic policy and development issues,” and serves as a reference point for UN discussions on economic and social issues.

According to the WESP mid-2010 update, important weaknesses in the global economy remain, with policy changes required to broaden and solidify the recovery.

“While the world economy continued to improve in the first half of 2010, leading to a slight upward revision in the United Nations outlook for global growth, the pace of the recovery is too weak to close the global output gap left by the crisis,” the report states. “It also points out that the recovery is uneven across countries, with encouraging growth prospects for some developing countries, but lackluster economic activity in developed economies and below potential growth elsewhere in the developing world.”

An economic collapse several years in the making will not be reversed overnight.

“After a sharp, broad and synchronized global downturn in late 2008 and early 2009, an increasing number of countries have registered positive quarterly growth of gross domestic product (GDP), along with a notable recovery in international trade and global industrial production,” the report adds. “World equity markets have also rebounded and risk premiums on borrowing have fallen.”

While suggesting that the world economy is on the mend, the report also contains numerous indicators of the scope, severity and continuing aftermath of the recent global economic meltdown — citing for example, the 2.2 percent drop in world gross product (WGP) during 2009 — which marked its first contraction since the end of World War II.

Things are getting better however, and with continued support from governments and other stakeholders, the UN predicts a mild growth rate of 2.4 percent for 2010 — which is seven percent less than it may have been without the economic crisis.

Think about that: during these recent hard times, seven percent of the business done on planet earth essentially stopped. That is a big chunk of revenue and doubtless includes the discretionary income that many folks might have otherwise spent on porn.

At the projected growth rate, we may still be looking at three more years of lackluster growth before breaking even — a time that will test the mettle of many companies, both within the adult entertainment industry and beyond. A time when diversifying into global markets will be more important than ever, in an attempt to spread out the risk and reward.

The world is slowly getting back up to speed, and when it does, pent-up consumer demand will mean new success for those merchants that survive — or those new ones that will take their place. Just remember that the first signs of this opportunity may occur across the ocean and not across the street.