The U.S. market has long been among the most lucrative for online adult entertainment, but as 2015 gets underway, many operators are reporting lackluster sales — raising the question of whether or not online content consumers are still willing to become paying customers. For perspective, I looked to the broader digital media industries, including music and movies, as a gauge of the adult industry’s success.
Despite the differences in content types, this comparison is valid, because like porn, movies and music are available digitally, and thus susceptible to profit killing piracy — while the demographics of porn’s target audience closely match those of the movie and music industries.
There is still money to be made in porn, but it will take creativity and value added presentations to convince consumers that the experience your site offers is more than the sum of its content.
According to Statista.com, the American music industry generated $15 billion in 2012, making up 30 percent of the total $50 billion generated by the global music industry. This figure is important as it shows that the U.S. market (often considered the biggest and best), represents less than a third of the paying audience in today’s global marketplace.
“Despite constant shifts in the way music is enjoyed by fans — the sudden rise of music file piracy, the development of online music streaming services and digital music sales — music lovers have not disappeared,” the Statista report notes. “Nevertheless, illegal downloading and person-to-person file trading have taken a substantial bite from the music industry’s global revenue.”
Trade the word “music” for “porn” and you have an equally valid statement.
Statista explains that global music sales declined from $25 billion in 2002 to $17 billion in 2012, with paid downloads and CDs representing a third of sales in 2011. This downward trend shows signs of reversing, however, due to the rise of inexpensive online streaming services, with revenue from these sites topping $1 billion in 2012, and fewer consumers acquiring music files illegally.
Beyond the fate of the music industry’s evolution, the movie industry can provide additional data points — especially when we focus not on the market as a whole, but on the subset of American theatre-goers.
According to Statista.com, U.S. movie theatre box office receipts rose steadily from around $2.75 billion in 1980 to $7.45 billion in 1999 — the year that Netflix launched, fueling the popularity of streaming video and ushering in new alternatives to theatres and physical media such as DVDs for viewing movies. Nonetheless, revenues continued rising, reaching $9.38 billion in 2004, then dropping half a billion to $8.84 in 2005 — the year that YouTube debuted, further popularizing the concept of “media sharing.” U.S. box office revenues then rose to $10.92 billion in 2013.
These numbers reveal that despite technological innovations that have provided free and/or lowcost alternatives for movie viewing, American audiences not only remain willing to pay a premium price for the premium experience of seeing a movie in a theatre, they are also spending more than ever before to do so — and this trend continues to rise.
It is also important to note that while technological advancements enabled widespread content piracy, technology has also provided solutions for combating this loss of revenue. For example, cinemas have invested in technology such as 3D, digital audio, IMAX and more, and enhanced the user experience through updated theatres with improved stadium seating (and even high-end reclining leather seats), adding an extra dimension to viewing comfort for a truly first class experience.
In today’s top theaters, you are no longer “watching a movie” — you are “experiencing” it.
It is a lesson that I learned while selling paintings in the pre-Internet days, where prospects were not just looking for a pretty picture: It had to be the right size to fit where they wanted to put it (I hope those of you who have yet to make your site mobile friendly are paying attention). The painting also had to be the right colors to work with their existing drapery, wall finishing, flooring, furniture and other décor, and it needed to have the right frame — which can make all the difference in the world — the finishing touch that can turn a browser into a buyer.
At the end of the day (or at the beginning of 2015, if you prefer), there is still money to be made in porn, but it will take creativity and value added presentations to convince consumers that the experience your site offers is more than the sum of its content. Remember, a picture is something you look at, but put it in the right frame and it becomes a visual experience that viewer’s may value enough to pay for.
