Bad Times Ahead

A money manager for prominent pornographers told a friend of mine that they expect bad times ahead in their business and are taking the requisite steps of retrenchment and diversification.

SykkBoy posts to JBM:

We’re at about the mid-way point through 2007 and have had a few things go down, but where do you see the industry going the second half of the year?

Do you think we’ll stay on course and things will continue as is, or do you think they’ll improve or go down the shitter.

Will there be any obscenity prosecutions?

Will we get a final verdict on USC 2257 regarding primary and secondary producers?

Will tube sites and torrents take us to a point of virtually giving away every piece of content?

What lies ahead for us in the second half of 2007?

Paul Markham posts:

The sky is not falling in but it will be different.

I see a bigger move over to PPV, VOD and sites offering a shorter membership and smaller package to surfers. The majority of surfers clearly does not want a 30 day membership, sites that cater to what the customer wants will win out.

Will there be any obscenity prosecutions? The day they come after me will be a cold day in hell, so not worried about it.

Will we get a final verdict on USC 2257 regarding primary and secondary producers? Yes and I predict secondary producers will be held responsible for the porn they publish. The FBI can visit me any time they want. Even though the law does not apply in CZ I comply with it.

Will tube sites and torrents take us to a point of virtually giving away every piece of content?

No but they will force us into meeting the surfers needs more. The problem is not with these sites popping up. It’s with our apathy towards stopping them stealing our content, using the same billing companies as we do and the fact that the surfers prefer them to us. We need to meet customers needs first. Or let other sites and methods take the business away from us because they did. And please do not tell me the surfers prefer them because it’s free. Because it reveals how little you think.

The future is going to be hard for those who run on yesterdays business model.

If you produce extreme porn, related to where you live, you will always be at risk to prosecution for it.

If you publish porn it’s only common sense that you should be responsible for it being legal.

The business is changing. Few surfers need what we are selling them. Until recently they had no options, it was $30 or nothing. Now with PPV, VOD there is.

Also what sites like Torrent and Megarotic clearly show there is money to be made catering to the surfer. Please don’t tell me they can offer what they do because they steal content. Content is not the expense they are saving on. They have expenses on running those sites, nothing is for free.

I saw a program last night about the Adult Net, sex.com, Kremen and Cohen. Had a few people also giving their opinions, one was our friend J$tyle$.

There was a great comment made about how the Internet is an excellent vehicle to view porn. It’s there in your home, it’s always available and it has a great selection.

A porn movie scene, which is what most porn consumers want at one sitting and the reasons are obvious, costs 5 cents in BW and another 5 cents in server/hosting costs.

To buy it can costs from $10 to $1,000 unless very special. Selling it to 1000 members a month over a year makes the cost of a $500 scene 4 cents. The cost of admin, programming and processing is slight but let’s say another 14 cents. Total cost of the scene to sell to a surfer is 28 cents. Selling the scene for $1 gives us a profit of 72 cents.

Now the flaw in my scheme is "traffic" I have not plugged in the cost of traffic. But figure out the surfers reaction as he sees the Internet split into 2.

Those who need him to spend $30 for his 1 scene needs and those who need him to spend $1. How long do you think it will be before the surfer forces the business to change?

About as long as it takes sponsors to take advantage of a different way of selling what the customer needs. The more people offering it, the less chance for the survival of those who don’t.

This will not happen in the next 6 months, it will happen though.

It costs money to run a porn site, some costs can be got around, like stealing content. But others have to be paid, like servers, hosting, staff to run the sites, processing and other costs. The biggest threat to us and how we currently work is not from guys in their bedroom sending porn to people for free. It’s from large sites run as a business and supplying a product at a fraction of the cost we do.

Forget about closing them down, as that’s not going to happen. We are going to have to compete with them. If others can deliver what the customer needs for less than we do, then we will have to compete with them.