Tough times in the porn industry
 

"We always said that once the Internet took off, we'd be OK," he added. "It never crossed our minds that we'd be competing with people who just give it away for free."

http://www.latimes.com/business/la-f...386,full.story

If this morning wasn't already depressing enough.

Yep - we're moving into interesting times. The saddest part is that so many people are turning to cheating, and that reduces the market even further. The last thing we want now are cross-sales and trojan installations.

A real sign of the end of times...

Things are not looking great that is for sure. But I think it will end up okay for us all, afterall even those giving it away for free need to make money.

"Why would anyone pay for porn?" is a question I see a lot these days other non-porn boards. People just expect free porn and think memberships are stupid.

This is not the end of times, this is the time for the idea guys to come up with new and more profitable ideas. We need to offer stuff the tubes cant give away for free. If we can make it through these tough times, we will only be stronger when the market turns around. The illegal tube sites will eventually kill themselves by either not being able to pay their huge hosting bills or by companys persuing legal action. Atleast thats what im hoping|huh.

I was at the gym yesterday and two different people that I know there came up to me asking how business is lately. The first one is a guy that runs HIV gay cruises and he was telling me how bad business is due to credit card declines. The second person is a woman who runs a well known mainstream book and magazine store that is located in walking distance of our downtown and a major hospital that told me the same thing about credit card declines.

While I'm sure tube sites and other sources of free porn hurt sales I believe the major reason that sales are so bad is we are in a major recession and credit has dried up along with very restrictive scrubbing by the credit card companies.

When times are good expensive bottled water sells well despite water being freely available.

Free water in England is now a health risk. Free porn on the tubes is a health risk for your PC. Maybe we can learn from the marketers of mineral water.

I agree the recession has had a major impact. I personally think the recession is helping in driving people to the tube sites.

Those people will leave the tubes once the economy picks up.

It might be free porn but the quality is horrible. People will return so that they can actually watch video's full screen rather than pixelated crap at 400x300

Especially considering high definition screens are reasonably affordable and will become even more so over time and consumers are already demanding quality products which display well on their HD screens.

You all are right. I think everyone should quit, except ME. What not a good idea? Ok Ok I will go stand in the corner |escape|

They just don't seem to understand the concept that making stuff cost $$$s. If people aren't making money, they aren't going to spend money making it. |catfight|

That applies not only to porn, but also mainstream. |cry|

Will Hollywood keep spending million$ making movies if everybody just downloads it for free from the thiefs. |club|

All true, but will people pay for quality? When mp3's became popular, no one cared they sounded like crap compared to CD's...people downloaded them, illegally, and quit buying CD's because CD's cost money and mp3's were free.

And what's to stop illegal tubes from upgrading their quality? Hollywood has the right idea..it's fucking HARD (at least for me) to make a copy of HD movies. Even my DVR charges me $5.99 everytime I want to watch a PPV. Does porn have a similar digital license encoded in the content yet? If not, it should...

Actually, that might not be a good example. People were still buying CD's until the music industry went after the pirates. CD sales nose dived shortly after Napster was shut down.

And quality sound has really never been the primary force in peoples buying habits when it comes to music. The 8 track tape was a much better sounding medium but cassettes sounded ok and were cheaper and more robust.

CD's may be a higher quality, ie. higher bit rate but I'd bet the average person couldn't distinguish the difference in a blind side by side test.

The CD is now basically dead for the same reason as every other format in the music industry died. Something acceptable came along that was more convenient.

Carrying an iPod is much easier than carrying a CD player especially when you can carry your complete library of music on it.

I read an article that Forbes magazine are looking at some Tube sites to include as the most lucrative money makers.. ouch.

This is the case and I'll give a personal experiences. My uncle who has a 700+ credit score, had his main credit card account closed by the creditor after 12 years because he got up to over 50% balance to credit line.

Also Ive noticed that the we are getting calls from anyone doing services (propane, wireless phone, home phone) within 2 or 3 of receiving the bill and at least 2 weeks before the bill is due..as "reminders" of when the bill is due. Its tough all over, not just porn.

and I do love the analogy Cleo about water and porn, very good twist.

30% down from last year....

I have tweak my blogs, brushed up on my SEO skills, created more traffic, promoting heavy on webcam sites,.....I am climbing back slowly but surely.

The recession has forced me to become better at what I do. If you can survive this down turn you will emerge stronger. I have seen the mighty fall....adapt or die.

In 04-05 I did almost half a mil $.

Every year since then it has dropped, and the 07-08 financial year was the worst for me with profit so far down I was starting to worry. But, in 08 things turned around because I stopped doing the same old garbage I was pumping out in 2002 ... that stuff doesn't work anymore, and approached people I had helped in the past who were doing very well for advice on what was working in today's market. I also did something most are incapable of doing ... i took the advice instead of asking around until I got the answer I wanted. Profit is back on the rise and things are good ... while ratios aren't what they were, there is definitely no recession in my office! If I had of been a stubborn bastard and refused to accept the changes then I would be one of the people complaining on the boards all day about how its not fair.

Thing is guys you have to adapt. The very nature of surfing has changed so radically in the youtube age that surfers simply aren't going to gravitate to sites using outdated methods. Surfers have faster internet, are used to content on demand, social networking, being able to get what they want to see and quick, and these surfers still signup when they find something they really want. Best of all SE's are moving towards getting those types of sites higher in their rankings because in the end they want a more rewarding search experience for their users. How many tube sites dominate top spots? ;)

The problem with veteran webmasters is often their ego gets in the way of progress. This industry is maturing, and unfortunately those who don't update their methods and strategy are going to be left behind. I personally am excited by the radical changes in the industry! :)

Bring it on I say ! |thumb

Finally someone has seen the light.

There has ALWAYS been free porn on the Internet. Since day one. The problem is we are in the biggest recession we've seen in our lifetimes. Sales are down EVERYWHERE.

Vivid says "sales are down 20%". Well, they are lucky. The local Wendy's up the street from my house closed down. A nearby gas station also closed down. One out of four houses on my street (five out of twenty houses) are empty because they lost their jobs and couldn't pay their mortgage. Discretionary cash is at a minimum; People are afraid to spend because they are afraid they might be next to loose their job.

Do tube sites hurt us? They sure do. But they aren't killing us. Our industry is seeing what all industries are seeing.

I pretty much agree with you that credit card issues / discretionary spending are where the main problems are at the moment. That and summer. I'm still seeing similar levels of clicks to sponsors but drastically fewer sign-ups. (I even saw a sponsor posting to see if any other program's ratios had suddenly doubled recently - that was refreshing honesty!)

People still click links and go through the tours but I'm guessing either their CC won't work, or they don't have the money for a subscription at the moment, or they'll only spend on something that's really special to them and, unfortunately, I just don't have the right sponsors to meet that need at the moment.

I wouldn't exclude tube sites as being part of a problem though - if you run (or ran) a tgp or mgp then tubes have pretty much just nicked half your traffic and taken your submit pass revenue with it, as well as the revenue from that traffic. But, I have seen some TGP / MGP people say that although their traffic has dived, revenue has't decreased by the same amount - so maybe the people who flock to tubes really are just lookie-loos who like to wank themselves sore.

The one thing that people always forget is that having "free porn" drastically increases the market size of potential porn purchasers.

I don't know if I believe it is mainly the economy. Remember a decade ago when 1:100 ratios were common? Before all the free porn out there?

Also I have one sponsor who has relatively rare content. They are doing about 1:50 RAW so far. My theory on that is that there is hardly any free porn out there for this fetish so people are willing to pay for it. Business basics: Supply and Demand. Sure the economy has something to do with it but all of the free porn available and the saturation are probably more of the reason for the skyrocketing ratios which go higher and higher every year.

PS- by free I mainly mean pirated.

No surprise there, especially considering the crazy amount of traffic some of the bigger ones get. Times sure are changing faster than ever that's for sure.

One thing I have noticed is that membership prices have stayed the same or increased. Sure there are sites with free trials, but they limit the content within those offers.
I am not a business expert by any means, but it seems like if you lowered membership fees you would get more sign ups.
I've noticed that a lot of the big sites charge at least $30 a month. I wonder how many more sign ups they would get if they dropped the fee $10 per month or offered a bi-weekly membership option.

I have to agree 100% with you, free porn has existed for years, off cause if there were no free porn we would sell more, but the decline in sales and ratios is caused by the financial crisis, people are still being laid off and people are rethinking every decision when it comes to spending money! The buying what you want days are over for now, you'll have to go for what you need....my guess is that dating sites are selling better because there you can get sex for free....especially if you're not too picky! ;)

Kind regards
Sodo :)