Porn is in rude health

Jun 7, 2012
Adult Business News
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The conventional wisdom is that porn is in crisis. Decreasing profits, increased piracy and a flood of free and amateur porn on the internet are the culprits and, the story goes, the industry is haemorrhaging money. In a recent Guardian article, filmmaker Louis Theroux went as far as to argue that the industry was “fighting for its life”. While profits may be down, it is a mistake to see this as evidence of a dying industry. Indeed, it is actually a sign of a successful, maturing industry that is moving from a “mom and pop” model of small, backstreet players to a more legitimate, mainstream industry characterised by fierce competition and increasing concentration in the hands of a few large firms.

These changes were best summed up by Stephen Yagielowicz, a writer for the porn industry website, XBIZ, when he wrote: “The corporatisation of porn isn’t something that will happen or is happening, it is something that has happened … It’s Las Vegas all over again: the independent owners, renegade mobsters and visionary entrepreneurs pushed aside by mega-corporations that saw a better way of doing things and brought the discipline needed to attain a whole new level of success to the remaining players.”

What has happened to porn is typical as industries grow and mature. The internet enabled rapid market growth and attracted a proliferation of new entrants eager to make what appeared to be easy money. This led to intense competition, falling prices and profits, and, as documented by Theroux, lower pay for the performers. But the weeding out of some unprofitable firms and a wave of acquisitions have led to the consolidation of the industry and the emergence of a few large, more professionally managed businesses operating in multiple market segments through a variety of distribution channels. These big players have gained a level of economic, political and cultural power that is reshaping the industry. It is a sign of the success of the porn industry that it has become a mainstream, legitimate sector that interfaces with credit card companies, mobile technology companies, software developers, venture capitalists and mainstream media corporations.

So who are these major players? People often guess Hugh Hefner of Playboy, Larry Flynt of Hustler, or perhaps Steve Hirsch of the “feature” company Vivid. But few have heard of Fabian Thylmann, a 30-something German businessman who is the Rupert Murdoch of porn. He is the founder of Manwin, a Luxembourg-based conglomerate with more than 700 employees that owns and operates such well-travelled sites as Brazzers and Digital Playground, and, in 2011, brokered a deal with Playboy to manage some of its branded online and entertainment businesses. In its PR material, Manwin describes itself as “the leading international provider of high-quality adult entertainment, delivered through online, mobile and television media platforms. It is the owner of the largest network of adult websites in the world, with more than 60 million daily visitors.”

This is where it gets interesting. Theroux claimed that the porn industry was in crisis due to the proliferation of free and amateur porn. But Manwin, in addition to controlling profitable paid sites, also owns many of the top-visited “free” porn sites, including YouPorn, PornHub, Tube8 and Spankwire. In a clever marketing ploy, Spankwire tells users that this is the place for the “best free porn” that shows “real life sexual escapades in the free sex stories written by the users”. In reality, much of the content comes from Manwin’s and others’ paid sites, and acts as teasers to get the viewer interested so that they can then “monetise” the free porn by diverting him or her to paid sites.

At the same time, the industry is cracking down on pirated porn through legal and technological strategies. This is similar to the business model adopted by the music industry. So, rather than destroying the porn industry, free porn is expanding the consumer base for paid porn. Feras Antoon, CEO of Brazzers, told New York magazine that free porn sites had “vastly enlarged the total universe of porn consumers that the number of those who pay has ballooned along with it”.. The strategy is paying off for Manwin, whose pretax earnings increased more than 40% in 2010.

So-called “amateur” porn has also been blamed for reducing the profits of the porn industry. In industry terms, amateur refers both to the visual grammar (looks homemade), and the “girls” (unknowns) rather than who is actually making it. The big secret is that the mainstream porn industry owns many of these sites. Amateur is just another market segment – along with anal, oral, and interracial porn. As Yagielowicz told ABC: “Many so-called amateurs are not real amateurs … The studios have already figured out how to dress up real porn stars like the girl next door on single-model, subscription-based sites, so I would expect they’ll do the same on user-generated, revenue-sharing sites.”

Many small-time porn businesses are only too aware of how the industry is changing. At a recent XBIZ summit in Miami, Florida, the porn conglomerates were heavily criticised, even heckled, for changing the rules of the game. Indeed, the rules have changed, and now the industry that trades in the debasement and degradation of women is being taken seriously by Wall Street, the media and the political establishment. Rather than an industry in crisis, this is an industry that has reached a level of mainstream acceptance that Hefner and the old gang could never have dreamed possible.

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Carrie
11 years ago

I honestly thought the porn industry was about to go bankrupt, it’s surprising to read that is not the case.

Anthony Kennerson
11 years ago

You do know that the author of that article is none other than Gail Dines, right?? Problem is, Gail probably is as clueless about the reality of porn as Louis Theroux was. Porn is no more going bankrupt than it is consolidating into multicorporations. Manwin may own plenty, but they most certainly don’t own the whole Internet…and there has been plenty of backlash over their exploitation of tube sites and “free porn” from both smaller companies and from home-grown website models. Of course, if Gail really did care about the performers and less about selling her quasi-Marxist claptrap, she would… Read more »

Anthony Kennerson
11 years ago

Also…notice how Gail holds back on her antiporn ideology until just before the end, when she busts out the “debasement and degradation of women” card. Never mind that Brazzers’ content will never be confused with, say, old school Max Hardcore or GagMyCock.com. To Gail, it’s all the same: any sex act done by or to women that doesn’t meet her exact standards of “intimacy” is inherently “debasing” and/or “degrading”. She is simply Shelley Lubben without the kids, the religion, or the looks.

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