YNOT – The adult entertainment industry really didn’t need any more evidence that its major market has moved from pay-per-view television and home video sales to the internet. Apparently mainstream pundits did, though. A recent rash of articles in mainstream rags, online and off, have concluded broadcast porn may not be dead, but it’s definitely mortally wounded.
According to market analyst SNL Kagan, porn revenue declined from $1 billion in 2008 to only $899 million in 2010. The Hollywood Reporter, picked up on that, combining it with quarterly reports from various premium television service providers to note that three of the largest pay-TV providers — Comcast, Time Warner Cable and DirectTV — reported “lower adult buys” as primary causes for weaker-than-expected second-quarter pay-per-view revenues … and consequently, balance sheets that disappointed investors.
Time Warner Cable’s chief executive officer has been quoted ad nauseam saying that even though adult content makes up a small part of TWC’s business, the decline of porn pay-per-view revenue is notable because the category is one of the more profitable.
“There’s been a fairly steady trend over some time period now for adult to go down, largely because there’s that kind of material available on the internet for free,” TWC CEO Glenn Britt said during a shareholder conference call.
Meanwhile, venerable The Wall Street Journal averred, “It is hard to get a fix on how much porn contributes to cable and satellite companies’ bottom lines because the companies aren’t transparent about it. But adult content has been a consistent source of profit, because cable operators have leverage to command margins that can exceed 90 percent on rentals of generally interchangeable porn movies, analysts say.”
One such analyst, Craig Moffett of Sanford C. Bernstein, told the WSJ, “[Porn is] a relevant business simply because of its profitability.”
All is not lost for those who rely on adult content for at least a portion of their income, though, according to Vivid co-chairman Bill Asher. He told the WSJ that just like adult companies discovered when the internet began taking big bites out of more traditional porn markets in 2000, mainstream porn pushers must adapt to consumer desires. Asher said his company has embarked upon a number of initiatives to compete with free and cheap internet porn, mostly by offering attractive prices and content that can’t be found anywhere else.
“I don’t think you want to get down in the trenches and slug it out with cheap porn on the internet,” Asher told the WSJ. “Our job [and by implication, broadcasters’ jobs, as well] is to come up with unique, interesting content, not just more of what’s out there.”
