Why Buy The Cow?

A major media segment has indicated that the Internet has pulled down a significant portion of their profits through the proliferation of free content. The net effect of amateurs supplying content where the professionals had a near-monopoly has the industry contemplating pay-for-play Web presences, focusing on Web-exclusive content. The long-term outlook for this segment looks bleak, as its players try to revamp their infrastructure to meet tougher profitability conditions than they have faced in their entire history.
Is this the newspaper industry? Weekly news magazines? Not exactly:

“Free porn” just might be the two most exciting or frightening words in the English language, depending on your point of view.
And they’re especially threatening to the adult film industry, which has made billions through the sales of DVDs, videos, and sex products.
After two decades of phenomenal growth in profits, the porn industry is facing some major challenges as its X-rated DVDs and Internet content lose out to free videos and photos distributed by amateurs on the Web.
Sales and rentals of adult DVDs fell 30 percent in the last two years and sales of Internet-based porn, while still growing, have started to plateau, according to industry estimates.
“The DVD market is a battle that we’re losing,” says Drew Rosenfeld, the creative director of Hustler Video Group. “Looking back historically, we’re at less than half in numbers. Even a line like Barely Legal, which is our hero brand, used to be off the charts and it’s gone down to a third of what it used to be a few years ago.”

The porn industry has discovered an old truth passed down from mothers to daughters since time immemorial. They warned that no one buys a cow while they get the milk for free. Pornographers who helped transform the Internet into a cornucopia of pornography and leapt towards broadband as the industry’s biggest distribution channel found out that the new technology is a double-edged sword.
In many ways, this mirrors the problems of the traditional media. When everyone can become their own publisher, then content explodes — and potential customers suddenly have a lot of choices, much of it free. Newspapers and other traditional media have an advantge in that they create content outside of the reach of almost all of the New Media pioneers, hiring reporters around the nation and around the world. That creates a bright-line separation between them and the bloggers and independent journalists, even if the quality and the bias leave the product open for well-deserved criticism.
Quality counts, of course, in the blogosphere and on places like YouTube, but production values have never been exactly the porn industry’s forte. They have spent decades turning out dull, repetitive crap in bright packages. It should come as no surprise that their customers can turn out equally dull, repetitive crap, and for free.
This puts the porn industry in a tough position. Having created the demand for prurience on the Web, they have undermined their position in other distribution channels, such as adult book stores and mail-order. None of the other channels have the impulse access that the Web does, and they have too much overhead to compete with the freebies and the small-business model operations that have kneecapped them. They may have helped their own industry into the grave, thanks to their former customers who feel empowered to give the milk away for free.

17 thoughts on “Why Buy The Cow?”

  1. Homemade Porn Killing Adult Film Industry

    ABC’s Marcus Baram reports,
    After two decades of phenomenal growth in profits, the porn industry is facing some major challenges as its X-rated DVDs and Internet content lose out to free videos and photos distributed by amateurs on the Web. Sale…

  2. Interesting, but apt, comparison between the porn industry and the MSM. It astounds me that neither industry saw this coming, so to speak.
    It is telling that their arrogance and hubris blinded them to the legitimacy and creativity of the amateurs. Apparently, these amateurs can sit in front of their computer screens in their pajamas and produce compelling articles and productions without the bias and overhead of bricks and mortar behemoths who preach instead of teach.
    There is a vast pool of knowledge and talent in the blogsphere in the process of being utilized. It is long overdue as we move from a biased, patronizing editorial page to our own front pages.
    Read it and weep, MSM! You either adapt or your paper is your own obit!

  3. The internet is probably doing this to a lot of traditional businesses. For example, I purchase most movies and books on-line. It is also possible to get better deals on firearms and ammo from on-line dealers than from local sporting goods and gun shops. This is also true for clothes, shoes, sporting goods, etc, etc, etc. What store, no matter how large, can compete with the staggering variety available from the internet marketplace? Further, an internet “store” doesn’t have to spend money on an attractive building and sales staff: in effect, can be nothing but a warehouse with a small customer service staff and a large shipping / receiving department.
    As for the adult industry itself… Why spend money on a magazine or DVD when the same content can be downloaded for a fraction of the cost or even bootlegged for free? I imagine that the porno studios are facing the same problems as the recording industry in this regard.

  4. To me the downfall of the papers is that they rarely met with constructive criticism in mass before.
    It was rare for papers to dispute each others “facts” and the sparse number of letters to the editor were also chosen and controlled.
    The web gives an expandable letter to the editor page up to the limits of the criticism due a story or set of stories until it has been fully examined.
    This is a new capability that is in essence word of mouth on steroids.

  5. Hey, the sky’s the limit when they get that Virtual Reality porn thing perfected ……… LOL

  6. lets not pile on the porn industry. just as bars and prostitutes settled what became most of our towns and cities during the “manifest destiny” era, the porn industry was and still is, to a lesser extent now, the central driver of the internet. most of the innovations we take for granted on the web came from those folks…….
    http://www.msnbc.msn.com/id/10952475/
    myself, i’m holding out for a holodeck!
    http://en.wikipedia.org/wiki/Holodeck

  7. Patrick
    I’m old enough that I thought it was a step up when I ordered a subscription to the Braille issue of Playboy for the “enhanced” centerfolds.
    Just a shame they never came out with the “Scratch and Sniff” edition.
    LOL

  8. yup, the old scratch and sniff….. led to perfume ads in high brow magazines. once again porn leads the way!!

  9. Free or not, porn watchers don’t get much sexual satisifaction. Poor things, I feel sorry for them.

  10. Look at the newspaper and porn business and then look further down the road at even more profound changes coming.
    Ask yourself “Why is the city you live in located where it is and not in some other place?”. The answer is because of the past inefficiencies in transportation and communication and as those inefficiencies go away, those cities will gradually disappear with them. A perfect example is the city that I live near; Minneapolis. Its here, and not some other place, because this is as far north as a steamboat could get on the Mississippi River in the 1830’s and the timber and grain from the Northwest had to be moved by steamboat. Since then, the railroad and the Interstate Freeway system and Fedex and Air Cargo service have moved to spread out what needed to be concentrated back then and since the American economy is much less about goods and services than it used to be, the question now becomes “What’s the city for?”.
    In addition, one can just as easily ask the same questions about the large integrated business units like corporations; “What’s corporate headquarters for?”. When information processing and analysis no longer requires that people be concentrated in high-rise towers, where will we work? And if we no longer have to all come together in lumps every morning to accomplish our tasks, where will we live?
    And finally, if the core city becomes irrelevant for economic purposes that brought it into being, then what happens to municipal finance? How do we pay for the infrastructure whose usefulness is eroding out from under it?
    Look at the newspaper business and think; you ain’t seen nothin’ yet!

  11. There’s even another lesson here, regarding the natural paradox the seems to be the rule–but an overlooked rule. How many years have people spent trying to block access to porn and formed committees to try to stop the spread of porn? All of these efforts had the opposite effect, making it more desirable. But it seems as though the industry built their own gallows.

  12. “They have spent decades turning out dull, repetitive crap in bright packages.”
    Captain Ed – porn critic, has kept track of the porn industry’s offering for decades, and found it dull and repetitive. But he likes the packages.

  13. I read an interesting argument the other day regarding the porn industry. The $2.6 billion dollar industry is not really $2.6 billion.
    The industry is a great place to launder ill gotten gains.

  14. I am reminded of an exchange from the movie, “Boogie Nights”:
    Porn financier Floyd Gondolli (Philip Baker Hall): “This here’s the future. Videotape tells the truth.”
    Porn director Jack Horner (Burt Reynolds): “Wait a minute. You come into my house, my party, to tell me about the future? That the future is tape, videotape, and not film? That it’s amateurs and not professionals? I’m a filmmaker, which is why I will never make a movie on tape.”
    In 1979, the future was videotape and home VCR viewing, and those sleazy theatres went out of business.
    But with the rise of YouTube and internet streaming, could “Jack Horner’s” vision of actual porn films, with actual acting, elaborate storylines and professional production values, make a comeback on DVD? In other words, make an arty porn product that people might want to buy for its own sake?
    (Think of it as an update on the straightlaced, and often conservative, men who read Playboy “for the articles” which were witty and well written.)
    Probably not, because too many of the porn consumers are just interested in getting off and that’s that.

  15. I am reminded of an exchange from the movie, “Boogie Nights”:
    Porn financier Floyd Gondolli (Philip Baker Hall): “This here’s the future. Videotape tells the truth.”
    Porn director Jack Horner (Burt Reynolds): “Wait a minute. You come into my house, my party, to tell me about the future? That the future is tape, videotape, and not film? That it’s amateurs and not professionals? I’m a filmmaker, which is why I will never make a movie on tape.”
    In 1979, the future was videotape and home VCR viewing, and those sleazy theatres went out of business.
    But with the rise of YouTube and internet streaming, could “Jack Horner’s” vision of actual porn films, with actual acting, elaborate storylines and professional production values, make a comeback on DVD? In other words, make an arty porn product that people might want to buy for its own sake?
    (Think of it as an update on the straightlaced, and often conservative, men who read Playboy “for the articles” which were witty and well written.)
    Probably not, because too many of the porn consumers are just interested in getting off and that’s that.

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