LOS ANGELES — Media reviews of the state of the adult entertainment industry and its impact on popular culture are nothing new, but these days, the inner workings of the industry’s economic realities are getting more attention from outside observers seeking to characterize the dynamism within.
BuzzFeed reporter Charlie Warzel recently took a look at porn entrepreneurship, in an article entitled, “If They Build It, Will We Come? Meet The Tech Entrepreneurs Trying To Take Back The Porn Industry.”
The article profiles a number of the adult entertainment industry’s movers and shakers, including such luminaries as Colin Rowntree, Nate Glass, Stoya, Veronica Vain, Cindy Gallop and Brian Shuster, as well as provides observations from the 2015 XBIZ 360 Digital Media Conference in Los Angeles.
Warzel’s report reveals what many adult industry insiders already know: nobody wants to pay for porn.
Despite this stumbling block, however, experienced industry veterans and fresh blood alike are striving to solve what is not only a marketing problem, but a dilemma caused by a cultural shift, where younger consumers expect free content online — and do not see “sharing” as bad — laying the seeds for porn’s protracted piracy problem.
“Since 1998, there’s been an average of 70 percent drop in revenue on standard paysites,” Rowntree tells an audience of XBIZ 360 attendees. “You simply need to diversify. If you work 10 times harder than you did in the ’90s, then you can get close to getting back to the old revenues but not quite.”
“The room nods solemnly in agreement,” Warzel reports, underscoring the ubiquity with which these conditions have hit the market. “To an outsider, this is a brutally honest portrait of an industry in crisis.”
Warzel cites statistics such as estimates that 36 percent of all Internet downloads are pornographic, as is 12 percent of online content, along with traffic stats such as a 2012 report of YouPorn receiving around 100 million daily page views (up to 4,000 page views per second), and a 2014 PornHub report of 18.35 billion visits with 78.9 billion video views (or 11 videos for every person on the planet).
This popularity doesn’t always equal profits — or at least profits beyond razor thin margins — which is cramping liquidity and causing companies to seek outside investors, with little luck, or restrictive terms.
“If online porn was built by technically proficient, big-dreaming smut innovators, it’s now under siege by, essentially, technically proficient, deep-pocketed, shell corporation-constructing scoundrels,” Warzel writes. “Consumed and overwhelmed by the fruits of its own technological innovations, the adult world must once again return to its entrepreneurial, iconoclastic roots if it wants to reclaim its industry.”
Warzel examines piracy’s impact on the industry, as well as efforts to reverse the trend — such as the launch of the Boodigo.com search engine by Rowntree that de-values tube sites, and the efforts of Takedown Piracy owner Nate Glass to remove copyright infringing content.
Other initiatives require creative spark to unlock new business models, such as a project now underway between adult performers Stoya and Kayden Kross, called “TrenchcoatX,” which allows fans to preview video clips and buy them on a scene-by-scene basis — not a revolutionary concept by any stretch, but one that the team hopes to put a unique spin on.
“When you hit these kinds of walls some people go one way and stagnate and with others it forces you to innovate,” Stoya told Warzel. “Pay-per-scene exists with something like [the massive amateur porn site] Clips4Sale but it feels like Costco almost. We wanted this to feel like a brick-and-mortar store.”
“Ten to 20 years ago you’d literally put a naked person on a DVD or on the Internet and money just fell from the sky, to hear the old guard tell it,” Stoya added. “And so today you look at performers and there seems to be a bit still of confusion. It’s this idea that, ‘Hey, wait, my job is a job now!’”
Other performers are taking their careers into their own hands as well, including former Wall Street intern Veronica Vain, who brings mainstream notions of product placement and advertising to adult — and who told Warzel that a seminal moment came for her when she released her first video, promoted by a free 13-minute clip on PornHub. Fans could buy the full video from EvilAngel.com, but where the clip on PornHub received more than 2 million views, the Evil Angel clip was seen only 4,000 times — providing a powerful lesson for Vain on the value of alternative content monetization techniques.
“The younger generation has less qualms with porn and most companies that aren’t Folgers Coffee want porn watchers to buy their shit. They want them as the recurring revenue stream,” Vain told Warzel. “Mommy and Daddy are dying soon.”
For an example, Vain points to her first film, “Screwing Wall Street,” which pitched casual dating site Arrangement Finders. The site reported a 426 percent increase in signups within two days of the video’s listing on PornHub.
Vain is seeking financing for what she calls the “Hulu for porn,” entitled, Bangbox, which she hopes will tackle more than porn’s piracy problem, by combining the best of free tube and premium paysites into one customizable and searchable platform.
“It’s just easier getting content for free than buying it. Even if you’re game to buy porn, it’s easier to get more of [a performer’s] content in one place on a tube than it is with a subscription,” Vain explains. “Nobody has captured the impulse buy that you see with in-app purchases on phones. The way I see it, each guy has three to five girls he likes and if he could have something to surface that, preview it, and casually watch their stuff in one place, he’d be happy to buy it.”
For her part, Cindy Gallop seeks to transform “porn sex” back to “real sex,” with MakeLoveNotPorn.com, but like other operators, faces financing difficulties.
“High-profile VC firms can’t bounce my investor profile back fast enough. You’d be amazed how many fucks are given when it comes to sex tech,” Gallop explained. “It goes like this: I meet with somebody who’s interested and captivated by the idea. We have a great conversation, and then talk to spouse or a friend who will say, ‘What the fuck?!’ and all of a sudden the dialogue just disappears.”
This reluctance on the part of the financial community to invest in adult entertainment is leading some to rely on self-financing, such as Brian Shuster, who is betting heavily on the future of virtual porn and its ability to reshape human sexuality and interaction — and doesn’t want to see the industry sabotage its own success.
“This time around, let’s not be stupid,” Shuster says of the advancement of what he calls the sexual singularity. “This is the merger of adult entertainment and sex and human relations. We have to own it.”
“I believe Brian stands alone and there’s really nobody else in terms of the complexity of what he’s doing to make a foray into the future,” XBIZ founder Alec Helmy told Warzel.
“The sexual singularity, from a casual Internet user’s vantage point in 2015, feels about as probable as a three-way with your Roomba and Siri,” Warzel opined, illustrating how the industry still has a long way to go in capturing consumer consciousness about the future of VR porn, but he also notes that there is hope on the horizon. “Porn’s uncertain, technology-driven, piracy-laden years have, in a weird way, forced the industry to grow up, creating the conditions for the Rowntrees, Vains, Gallops, and Shusters of the world to make their mark on the business.”
Warzel’s full article can be found here.
