6 Fascinating Charts On The Future Of The Adult Entertainment Business

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XBiz, the trade newswire for the adult entertainment industry, just released its 2012 market research report.Don’t laugh, this is serious business: Sales are thought to be $14 billion a year, although that number is murky because so many companies are privately held.

And media and marketing executives know that the porn industry tends to precede the mainstream market in the adoption of new technologies and distribution methods: VHS tapes weren’t widely adopted until after the adult business began selling movies in that format. Same with DVD. Porn also pioneered e-commerce on the web.

The next frontier for porn appears to be web TV, according to the XBiz survey. Top executives such as  Hustler president Michael Klein and Wasteland owner Colin Rowntree expect usage to increase as soon as companies like Google or Apple figure out a way for viewers to switch easily between regular TV and web video. Interestingly, the industry is highly sceptical of 3D movies.

The report is based on a survey of “6,000 adult entertainment industry executives and qualified stakeholders,” XBiz says,  including “operators of leading adult websites, content producers and licensers, distributors and wholesalers, models and performers, retailers, payment processors, software and IT providers, mobile-solution providers, industry media and associations, providers of legal, marketing and consulting services, traffic vendors and ad networks, and providers of other industry-related products and services.”

You can download a full copy of the report here.

3D Porn is not expected to be big.

The report says Hustler Video has already developed a line of 3D movies (including This Ain't Avatar XXX 3D) and has teamed with Funky Monkey Media which only process 3D adult video.

Scott Taylor, president of New Sensations, told Xbiz:

'In terms of saleability on DVD, I have not seen a sufficient demand to warrant a substantial budget. Generally people simply don't look that good naked -- well, close up at least.'

'The content of the material will be the driving factor over the gimmicks. Make a better movie and the world will beat a path to your door. The novelty hasn't worn off on broadcast. I think that drives some studios to make 3D products. But in hard goods, I am not excited by its current potential. That said, I would, love to make a 3D fully interactive product.'

The mandatory condom rule is unpopular and regarded as unenforceable.

Steven Hirsch, co-chairman of Vivid Entertainment:

'Our position remains the same. We are a condom-optional company and we believe the current testing procedure works or we would absolutely mandate condoms.'

The new .XXX top-level domain is regarded as an unnecessary burden.

Michael Klein, president of Hustler:

'My answer is no, I do not see the value and I do not support .XXX. We have been very vocal in our feelings about .XXX, which we feel all it does is cause an unnecessary financial burden to adult companies having to regis- ter all their domains under .XXX at ridiculously high prices whereas there is no value as consumers can easily find what they want at any .com site. This also leads to the risk of politicians forcing adult websites into this .XXX ghetto and then setting up structures to block all such sites from cities, states or even countries. The only one who benefits from .XXX is ICM.'

Mobile usage is increasingly rapidly.

Allison Vivas, president of Pink Visual:

'We base this response on what we have observed in the data collected from our own network of sites, as well as third-party data on consumer usage trends.'

'The data shows that mobile web browsing has increased rapidly, with no signs of slowing down any time soon.'

Peter Acworth, owner of Kink.com:

'I would say that mobile devices are a very important delivery method for adult content, which is why we chose to make all of Kink's websites not only viewable but optimised for mobile users. While these devices probably won't become the primary viewing method in the short-term, they are certainly growing at a fast rate.'

The proliferation of free porn is hurting the adult biz.

Michael Klein, president of Hustler:

'Clearly the abundance of free content on the web due to all tube sites has the biggest effect on the current online adult entertainment. It has made the larger companies change the way they structure their business and had a lot of smaller companies going out of business or selling their business. Unfortunately, tube sites are not going away but if you are smart with the way you work around it and with it, you can still maintain and grow your online business back. And with all the law suits filed against a lot of the illegal sites along with the DMCA notices and other methods of combating piracy, the effect is being diminished from what was a huge hammer against the industry a couple of years ago when these tube sites first started to flourish.'

Porn producers would like to sue the pirates.

Allison Vivas, president of Pink Visual:

'We heavily support all copyright holders' rights to sue anyone, including individuals, for copyright infringement. Ultimately, it comes down to a business decision and evaluation of the risks versus benefits. I think over- all as an industry we benefit from consumers' awareness and respect of copyright law.'

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