
In hard economic times, no one is surprised to hear about industries struggling with bankruptcies, unemployment and consumers deserting high quality products to buy poor quality, but cheaper merchandise. We just don’t expect the industry to be pornography.
Yet a roundup of recent news stories on the pornography sector of the economy demonstrates that that’s indeed what is happening. Laments porn star Stormy Daniels, “Porn and Starbucks --- we’re going down.” According to BusinessWeek (yes, THE BusinessWeek):
Companies say people were already spending less on naughty DVDs before the economy went sour, increasingly turning to pirated copies and YouTube-like Web sites that stream clips for free and undercut companies working to sell adult content.
And now, with consumers tightening spending as much as they can, those who work in the industry say paid pornography is the first thing to go…
Daniels, 29, said people have less money but don't want to compromise their viewing habits, and even people who previously held out to avoid supporting Internet piracy are finding it harder to justify spending for content.
"They just don't have any money, they have no choice but to download it," she said.
In the past, the pornography industry was viewed as recession proof, but no longer. Paul Fishbein, chairman of porn purveyor AVN Media reports:
Everybody I’m talking to says the business is down anywhere from 20 to 30 percent. That’s in line with the rest of the economy. People in the retail sector are down anywhere from 10 to 40 percent.
The primary problem for the industry is that consumers are willing to compromise on quality. Jack Kyser, an economist with the LA County Economic Development Corporation, who studies the industry that pumps more than $12 billion into the Southern California economy explains:
They are definitely struggling. They are subject to piracy like the mainstream industry is, and that siphons revenue away. Then there are a lot of amateurs in the online industry, which is growing rapidly, and they don’t charge for it.
The industry is really seeing a change in their business model.
Fischbein of AVN describes it as a “perfect storm.”
There’s too much stuff out there. The economy is bad. And there is a lot of free porn. So it’s a perfect storm that is affecting everybody’s business.
Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis have mused publicly (and presumably facetiously) about asking Congress for a $5 billion dollar bailout. There are some segments of the market that are holding firm. Women’s studies professor Lynn Comella of of UNLV, who studies the industry says:
…[C]ertain segments of the industry are doing well, including retail novelty sellers that cater to women.
Comella said these businesses are having to work harder than ever before to maintain sales, but are still finding customers willing to spend $150 to $200 on high end sex toys.
The sense within the industry is that companies will have to focus on quality -- not quantity -- to survive in a bad economy, Comella said.
"The recession might force the cream of the crop to rise to the top. There's some people who believe that a cleaning out of the market might be a good thing for the industry," Comella said. "2009 might not be all that bad, but it's going to bring the issue of quality to the foreground."
For some customers, reputation is paramount. The Girls Gone Wild franchise is still on top, as CEO Francis reports with relief:
We offer reality product. We don’t do hardcore. We’re heavily advertised. There’s a comfort zone in choosing ‘Girls Gone Wild.’ We’re No. 1 in all categories.
While the bigger players in the porn industry may weather the storm, the small businesses may not survive. Rob Rotten, actor, director, producer and head of Punx Productions decries the “opportunists” who don’t care about quality. While Rotten is practically obsessed with quality: “I have my fingers in everything, including post production and box covers,” others are not so scrupulous:
Rotten believes the adult entertainment business has been hurt by opportunists who try to produce low-quality films and charge exorbitant sums in order to make a quick buck. “It’s a lot of low-budget gonzo stuff released into an oversaturated market,” he said. “I think the general public just got sick of paying $49.95 for a poorly edited, poorly shot, poorly made video.”
Yet Rotten is confident that quality will ultimately prevail:
The movies I put out and are affiliated with, we actually care about them. Even though it’s an adult movie, I try to make the best movie I can within my allotted budget.
There are some companies that are doing better now than they were three years ago, because they never let go of the quality aspect. They’re not just shipping wood.


Salon.com
Comments
The last time I saw Larry Flynt was in the Las Vegas Hilton around 1999 in a private room at the high rollers Texas Hold'em table. He appeared to be doing quite well monetarily. If he's losing money due to his gambling habits, I'm sure as hell not going to bail him out.
Sounds like a great project for an MBA student who will seeking employment in 2009 or 2010.
"This is one industry that if they bail out, I will hide my head in shame."
I doubt it will happen, but in the meantime we can laugh instead of cry about the downturn in at least one industry.
"Is it a leading or lagging indicator of the economy?Are the sales of Viagra and Cialis far behind? Will STD show a decline?"
I don't know about the answer to the first question, but I'd be willing to bet that sales of Viagra and Cialis will hold firm, and STDs will rise. Sex is going to be the entertainment of choice, now more than ever.
"With the last one, it would have depended heavily on who got a kick back."
I bet you're right.
There is nothing inherently ludicrous about a life's work spent supplying lonely men with wank-off material.
It's God's work.
Unless cheap Viagra substitutes become available, I'm sure they will.
As a substitue for sex, porn is unique: It may be the only ersatz product copying something that's free and readily obtainable.
"I hope that was an intentional pun!"
Yes, it was.
"It may be the only ersatz product copying something that's free and readily obtainable."
That's an interesting point. I had never thought of that.
Gee, I forgot what REALLY drives the Internet?
Porn has been a leader in advancing Internet technology, including streaming video technology and credit card processing.
It is humorous but there will be a real economic impact that affects more than just those women with the bad boob jobs and men with uncomfortably long appendages.
and, as another commenter noted, Stormy Daniels' quote "Porn and Starbucks-we're going down...".
Just hilarious.
But, given the lack of quality in adult entertainment, I don't mind.
I hope Rotten is right about quality prevailing, but I fear he is railing against the inevitable, a la Jack Horner in Boogie Nights. Video is king and with it comes a complete lack of creative vision. Joe Francis is just a pervert with money, a camcorder, and a bunch of drunk teenagers- and he's a lousy, unreliable business man to boot (I also know someone who's close to the Private Eye that's suing him). But he's #1, and he'll probably stay that way, even through the recession. Bastard.
"It is humorous but there will be a real economic impact that affects more than just those women with the bad boob jobs and men with uncomfortably long appendages."
I don't want anyone to lose their jobs, regardless of what jobs they might be. I just found it interesting that the porn business is a business like any other.
"Video is king and with it comes a complete lack of creative vision. Joe Francis is just a pervert with money, a camcorder, and a bunch of drunk teenagers- and he's a lousy, unreliable business man to boot (I also know someone who's close to the Private Eye that's suing him). But he's #1, and he'll probably stay that way, even through the recession."
Wow. I didn't know that. It is somewhat surprising to me that their are franchises within the porn industry and that brand names count.
I think it is great, the information age has allowed even small imaginative companies and individuals to find audiences and produce products outside of a once tightly controlled industry. It would stand to reason the porno industry would see the same shift that more traditional medias have. It is the American way.
"Mainstream porn (from The Valley), even with all of mainstream media’s statistics laundering of the industry’s income, is set for a bigger crash than Wall Street’s 2008 wreck. An entire industry built on DVD sales, consumers who now can now choose to watch porn they actually like (online), YouTube-style services such as YouPorn.com and xTube.com that provide not just searchability, but free, authentic user-generated content. It looks like this might finally be the year the business model of churning out 12,000 DVDs a year packed with cookie-cutter starlets and boring sex-by-the-numbers is likely going to collapse like a house of tired old cards ..."
That said, I think this industry is hitting a parallel with newspapers. Are you gonna buy one when it's online for no charge? On the serious side, I'm troubled at how easy it is for anyone of any age to access this. You merely click a button to certify that you are 18 or older.
As for Ms. Daniels and her coworkers, lets hope for a happy ending.
"I think this industry is hitting a parallel with newspapers. Are you gonna buy one when it's online for no charge?"
That's an interesting parallel. Of course the major porn franchisers would argue that you get a "quality" product when you buy their offerings. I'm not sure that anyone else is inclined to see it that way.
How many times can someone replay debbie does dallas before finding it stale? Will there now be a market for used sex toys. Ugh!!
"you didn't indent the last two paragraphs"
Thanks for pointing that out. I've fixed the formatting blunder.
"Never realized porn was considered a discretionary spending item. Always figured those who supported the porn industry would always find a need for new material."
Me, neither. I learned that you can be cost conscious about your porn just like anything else.
Of course those statistics were from the 80s before the Internet became a force, but to me it illustrated a very small majority of all those who have viewed porn actually support the industry.
I think that is true today. Where porn because of the ease of the Internet has may have increased viewers, it has not produced customers willing to pay for it. I wonder if any study has been done to see if the same percentage of core customers are still the main income source for the porn industry.
Porn is like GOD---PORN has always existed and will always exist as long as a human being exist.
The Porn industry is another matter. It is true that the Porn Industry has gone LIMP in these Hard Times (ha, ha,ha) and here is the 'money-shot' why: THE PORN BUSINESS MODEL is not viable in the 22d year of our lord DIGITAL. The Porn industry is suffering from a failed business model EXACTLY as the Music and Motion Picture industry are suffering---and no, Piracy is not the problem/anti-piracy the answer.
Porn is a unique product that doesn't lend itself to Branding /High Quality. Say I am in the mood to ejaculate to a DP scene with featuring a waif-like White Woman is ravaged by two burley, Ex NFL Linebackers? What would you have me I do---drive to a dank, smelly Adult book store, pay $69.00 for a 20 minute DVD that some pimply clerk will mutter 'Sicko-Perv' under her breath---all so that I can OWN my porn, watch it 12 times and then forever banish it to the back of my closet? No. I have feelings. I have shame issues. I also have money issues but that is none of your business!!!
I will be doing what I will be doing AFTER I send you this comment...Googling over to PORNHUB, clicking on DP and scrolling down until I find one where the PORN SKANK screams for dear life, the brutes!!!
Should the Porn Industry be bailed out? Why Not? Obama bailed out AGI and you can't get more morally reprehensive than that!!! My question is SHOULD we bail out companies with failed business models, such as GM and Times Warner and Vivid?
My Fix for the Porn Indy: Better Product, More Respectable Distribution Chains, LOWER PRICES. Vivid should sell PORN at TARGET for $9.95 and I mean the classy, new stuff. People will buy a music CD (with extras) or a BLU Ray for $10.00 as opposed to downloading it for free---they WON'T pay $20.00 for a music CD or $39.95 for a movie they see once and toss in the back of the closet. Porn will have to re-invent itself with more interactive sex scenes, interactive, low cost sex toys and more outlets in order to survive. If it REFUSES to adapt, it needs to die and you know what? Porn being Porn, the Porn Industry may go but it will not be missed, Noelita anyone?!!!