Wednesday, Jul 25, 2012    Text size: 

LOS ANGELES — In spite of an economic recession, an oversupply of free porn online and rampant piracy, the business of porn continues to impact the global economy on a multi-billion-dollar level, according to the results of a new industry poll conducted by media organization XBIZ.

The majority of industry insiders place annual gross revenues in the $5 billion-plus range worldwide. The results are based on responses from members of XBIZ.net, the adult entertainment industry’s leading social network.

While revenues have declined sharply in some market segments of the industry since the mid-2000s, the demand for adult entertainment remains strong. In an era where mobile content delivery and interactive entertainment is gaining market share, XBIZ asked industry members: "In your estimation, how big is the porn industry today?”

Of the 311 respondents, 36% believe the industry generates revenues of “more than $5 billion per year,” while 29% say that number is “more than $10 billion per year.” Another 21% estimate the industry to be worth “more than $1 billion per year,” while the remaining 14% say it’s “less than $1 billion.”

The figures represent revenue from all forms of content delivery such as sales and rental of DVDs, membership-based websites, video-on-demand, live webcams, mobile, pay-per-view movies on cable and satellite and more.

Current gross revenues by some estimates have decreased by more than 50% from what was widely recognized as a peak period for adult entertainment in 2005. The video production sector, or DVD sales and rentals, in particular has endured the steepest decline since that time due in large part to the proliferation of free porn online and piracy. Still, many established companies have persevered and remain viable as a result of their embrace of various forms of digital content delivery as well as strategic expansion into areas such as the robust live webcam and online dating markets.

While dozens of traditional porn titles continue to be produced on a weekly basis, sales expectations for even the most elaborate, high-end DVD releases have been curtailed as gross revenues have dropped. And the forecast is less than sunny. By all indications, pre-recorded porn content will only become harder to sell in the short-term. Profits from interactive entertainment appear on track to offset that deficit to some degree, but not nearly enough to prevent the industry from bottoming out.

Several looming questions abound, notably whether technologies such as 3D, augmented reality and haptics present a real opportunity for adult entertainment companies. Those who find ways to innovate and adapt will survive.