Rise and rise of the adult Internet industrySocial roots of an emerging marketAstonishingly it has taken the adult industry only a single generation to overcome the entrenched social taboos and values of a thousand years of Catholic and Puritan doctrine. The social stigma and indignity of obtaining pornography from seedy back streets has been replaced by a universal availability and anonymity. A limited range of sleazy products in brown paper envelopes has been superceded by a stunning variety of slick products and polished corporate marketing. Perhaps most significantly, the guilt of the back street counter has been usurped by the relaxation of the bedroom computer and cable and satellite TV. |
Just as the Kinsey report (Sexual Behavior in the Human Male (1948) and Sexual Behavior in the Human Female (1953)) shocked American society with its candid analysis of self-reported human sexual behaviour, so the increasing public exposure of a modern generation to the new wave of adult film celebrities in all media has changed perceptions of both deviancy and sexuality. The public are given exposure in chat shows and magazine articles to adult “porn” stars who, other than their recorded explicit sexual antics, come across as being essentially normal everyday people with whom the public can identify. A society which had until recently been “repressed” by a social order completely intolerant of public nudity, which it termed “indecent exposure”, and which portrayed the naked human form as inherently wicked and impure, was suddenly liberated by the explosion of a new adult medium which it was powerless to censor. Magazines, television, video, DVD, web sites, newspapers, broadband satellite and bill boards have suddenly come to revere the naked human form as an icon, to be universally worshipped, admired and adored. One could almost start to imagine that a latent ancient primeval human race had once again started to relax in celebration of its natural state.
Finally technology was able to supply a limitless stream of naked and explicit images of the human form in all forms of sexual activity, ever more rapidly, ever more readily and ever more privately. At last the inhibited user could be assured complete anonymity and join the growing mass of consumers of adult material. Adult images could be piped on demand to any home, hotel room, private club or office by cable, satellite or the Internet. Adult content providers could now distribute discretely to a wealthier, more socially conscious and more sexually sophisticated consumer.
Perhaps society’s greatest conscious denial is the essential truth that our bodies serve above all else as the carriers of genes, and as such, our behaviour is principly directed towards sex, reproduction and survival to this end. Attractive bodies and faces must therefore carry attractive genes, and to an adult of reproductive age, or an sexually developing teenager, there can be no greater eye candy than a sexually fertile and fit naked human body. Behavioral scientists have even gone so far as to suggest that all social behaviours, other than those directed at elemental survival, must be interpreted as giving some sexual or reproductive advantage. Thus the adult industry is perhaps the oldest and most central of all human industries, as it most closely defines the reason for our social existence. Thus sex is the reason why we crave better cars, bigger houses and better bodies. The adult industry provides images and standards for this fundamental market, defining sexual attraction with new human icons, rather than existing as some bizarre new fashion through which consumers can dispose of residual income.
Given the nature of the industry, and the unknown size of its black market cousin, estimations are many, varied and at best imprecise. However the tip of the iceberg is visible, and, as a rule of thumb, we are able at least to gain an insight into the growth and scale of the industry. Of course the industry itself is given to exaggeration, as in all financial boom sectors. Being social beings, and given our apparent obsession with maxima and minima from the profits on Wall Street to the size of human genitalia, we crave measurement as fuel for our collective imagination.
Nielsen Net Ratings estimated that 34 million Americans visited porn sites in August 2003 alone, or about one in four Internet users in the United States. According to the Web-filtering company N2H2, in September 2003 there were already in excess of 1.3 million sites providing around 260 million pages of erotic content.
One estimate puts revenues of the Adult industry in the United States at over $10 billion annually, with up to $2 billion spent on adult Internet sites. The Free Speech Coalition (FSC) claims that the on-line sector had a gross annual profit in 2001 of between US$10 and US$12 billion, greater than that even of Microsoft, although other estimates are closer to $2 billion. The FSC and Video Software Dealers Association declared that 1999 adult video sales and rentals figures from adult product stores in the US alone at around US$4.1 billion, with mail order video sales contributing a further US$400 million to an industry focused in California, where an estimated 70% of films are produced, and Tampa. Estimates for future growth appropriately occupy the realm of fantasy and science fiction, with a 2001 report from UK group Analysys predicting that broadband erotica would be worth US$3 billion by 2003, and rivals multiplying that figure by a factor of ten. In February 2003 the Company VisionGain forecast that the value of the "online pornography market" would be US$70bn in 2006, US$4bn of which might derive from 3G mobile services".Adult video rentals and sales peaked in the United States in 1997 at $4.2 billion, with a subsequent fall due to the emergence of the Internet and increased subscription to cable and satellite television. Indirectly large-capacity hard drives, recordable CDs and VCRs provide the hardware for home recording, an activity encouraged by the adult industry if not the film and music industries. In addition to the rapid growth of X-rated sites on the Net, the popularity of adult entertainment can be tracked through the growing number of video titles being produced. Ten years ago 1,275 hardcore titles hit the market, compared with 11,041 for 2000, according to AVN who claim that the increase in video production is continuing to escalate, aided by new technology that makes it much cheaper and easier to produce.
Of course the Internet is but one head of a global hydra, and it has been suggested that as long ago as 1986 there were some 500,000 sex workers in the US with a combined annual revenue of US$20 billion. The National Task Force on Prostitution suggests that over one million people in the US have worked as prostitutes in the United States, or about 1% of all American women. Figures for the number of people employed in production, distribution, hosting or otherwise involved in the online adult content sector vary greatly. The size of the black market of illegal brothels, call girls, escorts, strip joints and illegal sex workers cannot even begin to be estimated, and undeclared profits from the black market may even exceed those of the legitimate adult industry.
In 1999 the legal sales of pornography in the United States was believed to have exceeded $10 billion, a market so lucrative that even blue chip companies such as GM and AT&T have taken advantage of liberalized attitudes to provide cable and satellite distribution. This represents but a small fraction of Corporate America’s interest in the adult industry. The U.S. News & World Report claimed that America Online (AOL), despite its public denials to the contrary, is still is the primary provider of choice for the US pornographic Internet visitors, with nearly 16% of the Internet's adult sites being accessed through its portals.
The global adult market is estimated at $56 billion, and major corporate players such as Hilton Hotels, Marriott International, EchoStar Communications Corp., On Command and LodgeNet Entertainment all have large financial investments in the adult industry. For instance Hilton and Marriott hotels distribute X-rated shows, whist On Command and LodgeNet serve as adult content providers. The Wall Street Journal reported in November that Comcast Corp., Cox Communications Inc., Cablevision Systems Corp., Charter Communications Inc. and Insight Communications Co. all carry the Hot Network porn channel, which both AT&T and GM have signed. Owned by the Vivid Entertainment Group, the Hot Network quickly is becoming one of the best-selling commodities on cable and satellite television. Vivid, an adult content producer and distributor, has unashamed ambitions for the global market.
As the future moves towards wide screen integrated entertainment, with combined TV, computer and Internet applications, this market can only be expected to increase in the face of greater use and availability. On-line adult sites have succeeded all expectations by developing new technologies and original marketing strategies. Danni's Hard Drive first made its debut in 1995 and continues to surprise market analysts. Danni Ashe fuels her softcore adult empire through subscriptions alone with no banner advertising and reportedly earnt $8 million in 2001. Larry Flynt Publications, a conglomerate of movies, strip clubs, sex emporiums and Internet sites is currently estimated to have a value of $400 million. Another industry leader, the Internet Entertainment Group (IEG), claims more than 700,000 paid-subscribers with over 40% growth each year. At one point in 1998, IEG reported making $40,000 per day from live Web casts on one site alone.
It is often said that "Pornography is the handmaiden of new technologies" and the advent of 3G phone handsets only promises yet further growth in the adult industry. Indeed Penthouse and Playboy have already entered into basic licensing deals with mobile phone firms, and the early focus will be on "3G as a marketing channel to drive consumers to magazines, videos and the Internet" rather than as an adult content delivery system. That is until the technology speeds up within an ever faster cycle of development. Strategy Analytics considered that a legitimate market exists for mobile adult-oriented services which may amount to $1 billion by 2008, some 5% of projected mobile entertainment service revenues.
The Forrester Group have suggested that at least 19% of North American Internet users are regular visitors to adult content sites. Rather than supporting the popular prejudice that such people are lonely, single males, nearly 1 in 4 are women, 46% are married, and 33% have children. There have been studies conducted by two universities that suggest that at least 200,000 Americans now are addicted to Internet pornography, almost certainly held to be an underestimate. According to Nielsen NetRatings, over 20 million Web surfers visited porn sites from their homes in October 2000, an upwards trend. More seriously 16% of office workers connected to the Internet clicked onto adult content sites as well.
Corporate America has been negatively impacted by Internet pornography since upwards of “20 million people in North America are believed to use the Internet, with as many as half gaining access primarily at work.” (New York Times, 1996). Nielsen Media Research, Inc. found that three major corporations together lost more than 347 eight-hour days of employee time in a single month to the Penthouse magazine web site alone (Wall Street Journal, 1996).
The National Council on Sexual Addiction and Compulsivity estimates there are 2 million sexually addicted Internet users, with individuals spending as many as 15 to 25 hours a week surfing adult sites. Dr. Christine Samuels, Director of Sexual Addiction Treatment and Training Institute in New York states that putting a adult Internet addict in an office is “like sending an alcoholic to live in a distillery”. She also suggests that “Cyber sex also causes subtler damage to people’s ability to handle real relationships, depletes their sexual energy, and creates fantasy objects that no spouse can compare to, making intimacy so much harder.”
Some fear changes in social behaviour. One 26 year-old business man claimed that all of his friends were so obsessed with Internet adult imagery that they couldn't sleep with their girlfriends unless they acted like adult stars. Not a representative sample certainly, but certainly a concern amongst behavioral psychologists. "Just imagine the adolescents whose... sexual coming of age has totally coincided with the Internet and high-speed connections. This contrasts with the 13-year-old boy who before the Internet existed was lucky to find one Playboy magazine.” Like it or loath it, the Internet adult industry is here to stay, and the key, according to sex therapist Laura Berman, is to keep it in check. "There's always a role for pornography and for fantasies, if it's used to the benefit of the couple.”
Pornography may also affect crime on two distinct levels. Live adult or sexually oriented businesses such as strip clubs or massage parlors, attract crime to a community; and the general content of pornography is suggested to support the “rape myth” that women enjoy forceful sex and is instructional in nature. “Almost half of a group of rapists surveyed said they used pornography depicting consenting sex to arouse themselves before seeking out a victim.” (Marshall, 1988)
Whatever the future does hold, the market must by definition saturate, as only so much adult material can be consumed by a given population. Unlike computers, human sexual systems are driven by hormone production, which is quickly exhausted. Doubtless we have yet to see the summit of the mountain, but as with all previous universally available lifestyle products, such as cheap air travel and the automobile, the market will eventually saturate and will eventually downturn in an economic recession. But as the old marketing adage goes, sex sells, and as long as humans walk the earth there will be a market for beauty and sexual imagery. So perhaps you should hold on to those AT&T shares a while longer yet...