Why Porn no Longer Drives Innovation
The Downfall in Chronological Order
For centuries, the porn industry has been the catalyst that has launched and pushed technology forward and that later on became the standard for non-porn compliant products. But they lost it. And here is why.
The Internet is really really great… FOR PORN!
I’ve got a fast connection so I don’t have to wait… FOR PORN!
There’s always some new site… FOR PORN!
I browse all day and night… FOR PORN!
It’s like I’m surfing at the speed of light… FOR PORN!
The Internet is for porn!
The Internet is for porn!
Why you think the net was born?
Porn! Porn! PORN!
These lyrics were heard 2003 in a musical show called Avenue Q. It is a really hilarious song with catchy lyrics, but honestly speaking, the internet is not only for porn. The internet is mainly because of porn.
Source: https://www.youtube.com/watch?v=j6eFNRKEROw
Back in the 1970s porn killed Betamax
During the big videotape format war between JVC’s VHS and Sony’s Betamax over who would emerge as the preeminent format, porn played a crucial role.
Betamax was, in theory, the superior recording format over VHS. The resolution was better, the sound was slightly superior, the image was more stable, and Betamax recorders were also of higher quality construction. But at some point Sony ultimately decided against allowing filthy movies to be recorded onto their format, although in the 1970s pornography was more popular and more socially acceptable than ever. But still, a theater did not grant the same privacy and freedom that home video did. And to be honest, watching porn in a theater can be also kind of very weird. So, by the end of the 1970s porn movies accounted for over half of all videotape sales in the USA which for sure helped the downfall of Sony’s Betamax.
Porn built a consumer base for the internet and turned it into a beast
Maybe bandwidth growth and the invention of streaming content is porn’s greatest contribution to the internet since porn sites today attract more monthly visitors than Amazon, Netflix, and Twitter combined. At any given moment during the day, there are around 30.000.000 unique visitors viewing porn. No wonder that a 2004 Nielsen/NetRatings study found porn along with online music sharing to be one of the biggest factors behind broadband penetration in Europe. Long time before YouTube or Facebook live-streams, porn companies were trying to perfect this technology in order to deliver live webcam shows directly to consumers. It took these programming pioneers to develop the technology that would deliver streaming movies of copulating people to consumers hooked up with a dial-up modem, so Netflix can today stream in HD in every household.
So, if we believe that the military was the inventor and creator of the internet, then porn was the entrepreneur who brought the internet to the masses.
Dear Netflix, porn’s also got your customers used to paying for content
The concept of e-commerce, which is now becoming the most important part of the world economy, owes much of its early existence to porn. Netflix and all the other streaming sites who sell subscriptions to their customers can thank Richard Gordon for this. Gordon founded a company called Electronic Card Systems in the mid-1990s, which pioneered credit card transactions for a wide range of pornographic sites; among others, a site called ClubLove, which published the Pamela Anderson-Tommy Lee sex tape. Gordon made a fortune by taking a commission for processing sales on these sites.
Now that the genie was out of the bottle, the big players could cash in by distributing content to paying consumers who could access porn in the privacy of their own homes.
Three indispensable technologies built by the pornography industry
Innovation was always driven by smut: Bandwidth, streaming and e-commerce, porn has quietly led the way to the status quo that we all know and enjoy.
And the reason for this is quite simple. The people in the industry weren’t geniuses or tech visionaries, but they were forced to experiment and take risks just to survive, because the adult industry was always marginalized; so the technological advance was much more a product of their marginalization than any sort of vision.
So, what happened? It is a fact that pornography had an accelerating effect on technological development, but that obviously stopped years ago. The porn pioneers lost it and became simple copycats, and not even in a good way.
Three innovations missed by the pornography industry
The three biggest innovations in the last years are marked by companies like eBay (1995), mySpace (2003) and YouTube (2005). It doesn’t matter if they still exist or still play a leading role in their field, each of them opened doors for new trends that shaped the way we use and understand the internet.
The entire globe becomes a marketplace for small entrepreneurs
eBay was, in 1995, the first the first marketplace that enabled everybody to participate in e-commerce on a big scale. It enabled private persons to buy and sell all kinds of goods as well as small business owners to extend their market on a global scale. A truly revolutionary idea that was not based on improving technology, but on mixing existing ones into a new interface that connects seller and buyer. It created a huge trend that gave birth to products like the Amazon Marketplace and Alibaba. It was never easier to do e-commerce as a small entrepreneur than it is today.
The first solo camming sites in the adult industry appeared in 1996 (JenniCam) and 1998 (AmandaCam) paving the way for camming sites who act as a middleman by hosting thousands of independent models. LiveJasmin, one of the worlds largest camming sites today, launched in 2001. Others big players like Chaturbate (2011) or MyFreeCams (2002) started even later. Clips4Sale, a porn version of eBay for videoclips launched in 2003.
No social media for content creator in the porn industry
But the porn industry missed the following train completely. As mySpace launched in 2003 the area of social media began. Facebook (2004) and Twitter (2006) are today household names. Facebook had more than 2.2 billion active users in January 2018. The porn industry was never able to build a counterpart, every attempt was just a miserable clone that ended up being a paid dating service, not a social media service for adults. And this evolution decided the destiny of the porn industry as a whole. Facebook, Twitter, Instagram and others perfectly complement the uprise of the e-commerce marketplaces because they turned into a marketing beast for brands. Today, every small entrepreneur can not only sell their products on a global scale, but can also advertise for just a few bucks and build an audience that they can communicate with at any moment in time. Social media and e-commerce are interlocked. Facebook alone generated an ad revenue of USD 40.63 billion in 2017.
So, again, it was never easier to do e-commerce as a small entrepreneur than today — if you do not work in the adult industry of course. Indeed, then you are able to sell your products to your customers, but you won’t be able to build an audience for it because mainstream social media sites don’t like you. Just post a NSFW pic on Facebook and you will be looked out of your account for a number of days. Instagram is well known for its approach to pictures of nipples, and Twitter, while pretty sex-positive in its rules and policies, started to shadow-ban users with NSFW content. Tumblr, usually a porn heaven, just doesn’t take off as a site that connects people. Regarding peer-to-peer e-commerce, the adult industry remains in a deadlock.
User generated video killed the adult e-commerce star
The only time the porn industry was very fast to copy a new trend was when YouTube introduced the concept of user generated content in 2005. YouPorn launched in 2006; XVideos, Redtube, xHamster and Pornhub in 2007. And it made things worse for the industry. These tubes sites turned very fast into file sharing sites for pirated porn content. And it shook and shaped the industry completely.
While the music industry today, for example, gets a license fee for every music snippet played on YouTube, the porn industry started to upload their trailers to the tube sites paying them a commission for every sale generated on their pay-sites. The response to the challenge of sites with user generated content has been very different in the mainstream and in the porn industry. I’ve never heard of the music industry starting to upload their own content on The Pirate Bay and asking them for a commission afterwards for the generated direct sales on iTunes. The music industry took the case to court while the porn industry surrendered. As a result of this, a lot of big pornographic movie studios then got acquired by the owners of the tube sites who killed their business in the first place. For example MindGeek, a Canadian based company, acquired the pornographic movie studios Babes.com, Brazzers, Digital Playground, Reality Kings, Twistys, and Men.com. Mindgeek also operates Pornhub, RedTube, Thumbzilla, Tube8, and YouPorn.
Maybe this happened because the porn industry knew that they would not have a lobby supporting them in public while going down the legal path to defend their intellectual property rights over their content in court.
Anyhow, now the porn industry is in a vicious circle where the only traffic source are tube sites and content creators depend on that traffic to earn money, so they give away their content for free. So, prices are dropping, conversion rates are dropping, budgets are dropping, numbers of over all productions are dropping. Models and producers find fewer jobs for less money.
As a side note, the path that the music industry took was also not the best one. They now have other nightmares that they face: iTunes, Spotify and others are now their gatekeepers, dictating the rules of the game. But this is not an article about the music industry…
The wind of change
“Porn is free.” This short phrase describes the situation of the porn industry the best. Thanks to the massive popularity of the tube sites, this is exactly what consumers think. And there are many. I know, nobody is watching porn, but “nobody” is somehow translating in 2.76B monthly visits on Xvideos, 2.64B monthly visits on Pornhub, and 1.28B monthly visits on xHamster. And these are just the Top 3.
Porn is not free. It takes money to produce it. It’s not only the actors who have to be paid, there’s a whole team behind them — make-up artists, camera crew members and so on; not to mention the locations and the expensive equipment. The industry still generates 100B a year, but it’s in decline.
Things have to change and things are changing. There are new kids on the block, encouraging content creators to be entrepreneurs and sell directly to their customers.
ManyVids, a company co-founded in 2014 by former porn performer Bella French, does exactly that. Independent models and studios can sell video clips, live shows, custom made videos, messaging and more to their fan base. And ManyVids encourages content creators to connect their ManyVids profile with Twitter to drive traffic and build their own audience — that is a pretty new approach in the industry.
There are other new services like OnlyFans or FanCentro that allow models to sell monthly subscriptions directly to their fans. Stormy Daniels, the porn star who got quite famous having a supposed affair with the US president, has for example 4.400 paying subscribers with $14,99 a month on OnlyFans. That’s quite a deal and a good way to monetize her 778.000 Twitter followers.
Also, the old players are working on their business model. Pornhub just announced the launch of Modelhub, a website where independent models can sell their content, on their own terms, directly to their fan base. Pornhub also runs a model program where they share ad revenue directly with the models. xHamster also offers with xHamster Premium a platform to sell content directly to fans. XVideos just launched XVideos Red where they share revenue with content creators directly.
The porn industry is moving more and more into a market where content creators see themselves as entrepreneurs who sell directly to their audience. There are now only two obstacles left: a platform to build their audience and a way to get paid.
The last frontiers
Right now, content creators in the porn industry are cut off by two things that they would urgently need: Social media platforms and payment methods that work for them.
The first one, social media, simply does not exist for them. All traditional platforms like Facebook, Instagram, Snapchat, even Twitter ban or shadow-ban NSFW content, so it’s hard to build a fan base there.
But there is also a new kid on the block that tries to close the gap. Sharesome is a new adult social media platform that is designed for content creators and porn fans. Sharesome allows and encourages verified content creators to advertise their pay sites or cam sites, while fans can discover and share new content in their feeds or in topics. Since the launch of the platform in January 2018, the site is growing in double digits every month. We will see where it goes.
Regarding payments, the porn industry is seen as a high risk industry from the payment sector. That’s why credit card companies charge high fees and even cancel contracts on a regular basis. This is one of the reasons why the adult industry is looking into crypto currencies. Pornhub started to accept crypto currencies like Verge, Tron and ZenCash. xHamster Premium accepts Bitcoin and several Altcoins. Also Sharesome announced the launch of a crpyto currency called FLAME token.
The porn industry might be the first vertical for a mass adoption of crypto currencies. For content creators Bitcoin must be the best thing ever invented. Transactions are cheap and anonymous, and once received, there are several wallet providers already on the market where one can cash out in fiat or even with a credit card at hand withdraw fiat at an ATM. The Bitcoin ecosystem is growing fast and it’s just there to be picked up by content creators.
With the adoption of crypto currencies and the rise of social media platforms, designed for the porn industry, the future of porn looks bright. It will enable content creators to build their own audience and produce high quality content. And it will get professional studios out of the dependency of tube traffic.
And, one time more, the porn industry will be the thriving factor in the mass adoption of a new technology: Bitcoin.
Disclosure: I am an investor in a blockchain company, which has an ownership stake in Sharesome.
