Unfortunately, the post itself will disappoint—just a test to see if I could bait people in with that headline. Here is Wired magazine:
In the popular imagination, the eternal trope is that the porn industry drives the adoption of new technology; that it accounts for some astronomically large portion of all Internet traffic; and, yes, that it generates equally enormous sums of money for all the faceless people who run its operations. We picture these people as sleazy Southern Californians wearing pinkie rings and polyester. Or, if we’ve come to realize that the pinkie-ring caricature makes absolutely no sense in the age of the Internet, we see them as ruthlessly clever businesspeople with a sixth sense for where the big money lies. That’s the stereotype Silicon Valley embraces. Later in the episode, when Hendricks turns up at an adult industry conference, we encounter an army of porn execs dressed like bankers.
But it isn’t like that at all.
Some of it may have been true in years past. But no longer. A colleague of mine calls this a meso-idea, an idea that has ceased to be true but that people continue to repeat, ad infinitum, as if it still was. With the rise of mobile devices and platforms from the likes of Apple and Google, not to mention the proliferation of free videos on YouTube-like porn sites, the adult industry is in a bind. Money is hard to come by, and as the industry struggles to find new revenue streams, it’s facing extra competition from mainstream social media. Its very identity is being stolen as the world evolves both technologically and culturally.
. . .
O’Connell, Adams, and McEwen pull in yearly salaries somewhere in the low six figures, after paying “competitive” wages to a handful of coders in Seattle and Eastern Europe. “None of us own a yacht,” O’Connell says. Or as McEwen puts it: “You can’t understand the obstacles that are in our way.”
‘The Perfect Storm’
She doesn’t mean obstacles of morality or law. Yes, many people frown on porn, calling it exploitative and debasing. But many others just see it as a part of life—a big part of life. There’s an enormous audience for porn, and whatever it signifies, whatever emotions it stirs in critics, this audience isn’t going away. McEwen means economic obstacles, business obstacles, technical obstacles.
It wasn’t always this way. In the early aughts, online porn was ridiculously lucrative. Colin Rowntree, a porn producer, director, distributor, and member of the Adult Video News Hall of Fame, was a just mid-level player, and in those days, he and his wife, Angie, earned millions each year. But at the end of the decade, just about everything changed. Apple introduced the iPhone, which moved so much of our digital lives onto mobile devices while officially banning pornography in its App Store. Google pushed porn to the fringes of its search engine. And as The Economist and Buzzfeed have described, an army of “Tube sites”—essentially Youtube knockoffs with names like Youporn and Pornhub—began offering a smorgasbord of online porn for free, much of it pirated, making it far more difficult for pornographers and distributors to make money. All this happened as the worldwide economy tanked.
. . .
The porn biz can issue DMCA takedown notices and threaten legal action like anyone else, but it doesn’t have the clout to enforce the notices on a wide scale—or make anyone care that it’s being ripped off.
“The adult industry isn’t able to enforce its intellectual property protection,” says Kate Darling, a researcher at the MIT Media Lab who explored the economics of the adult industry in the 2013 study What Drives IP without IP? A Study of the Online Adult Entertainment Industry. “It’s not that much different from others industries—except that policy makers don’t really look at the adult industry and aren’t interested in helping the adult industry.” [Emphasis added]
So when the government stops offering copyright protection (and other barriers to entry), it becomes far more difficult to amass large profits. Incomes fall close to the free market competitive rate of return.
Paul Krugman talks about how the growing inequality of incomes reflects the increasing power of the elites. This example suggests to me that it’s not so much market power that is key, but rather political power. Some industries have it, and the porn industry does not. Too bad America can’t make all its industries look more like the porn industry (in terms of political power, obviously.)
PS. Wired also explodes some other misconceptions about the industry:
Meanwhile, with the rise of Netflix and YouTube and so many other mainstream video services—including Facebook and Twitter—porn is no longer the dominant form of online video. It’s hard to tell how much porn streams across the ‘net—no reliable operation tracks this, including Sandvine, the primary source for internet traffic research—but it doesn’t account for 37 percent of all traffic. It’s not even close. Mikandi declines to discuss its traffic. But a better barometer is the Pornhub Network, which now spans several of the major Tube sites. Pornhub says its network receives about 100 million visits a day, and at least on part of the network, the average visit lasts about nine minutes.
(Thank God it’s not “more than 4 hours”!)
If you extrapolate, that’s somewhere in the range of 450 million hours of viewing a month. Meanwhile, Netflix serves 60 million subscribers, and these subscribers watch over 3.3 billion hours of programming a month (10 billion a quarter). Youtube claims hundreds of millions of hours of viewing daily.
So we are a bunch of disgusting hypocrites, but not quite as disgusting as we had previously assumed.
PPS. The term ‘porn’ has become an overused metaphor, as in food porn or architectural porn. But if we are going down that road, why aren’t we calling a certain type of GOP campaign “political porn”? I can’t precisely define it, but I know it when I see it. The version aimed at downscale voters can be called “political porn”, and then when other candidates espouse a more sophisticated version of the same hot button views it can be called “political erotica.”