Friday February 10, 2017

Porn-o-nomics: Why a multi-Billion-dollar industry is having so much trouble actually making money

Listen 18:00

Porn is everywhere. It's on people's mobile phones, laptops, hard disks and it's all over the internet. There are now thousands of free clips just a click away, but despite the ubiquity, porn is an industry in upheaval.

As online porn producer Mike South tells Day 6 host Brent Bambury, adult entertainment isn't the money-maker it once was.

South, who's been in the business for more than 20 years, says porn's migration to the web and the subsequent pirating of copyrighted material triggered the end of an era.

"We had a goose that was laying golden eggs at one point in time," he says. "We were going around collecting the eggs but we didn't really protect the goose."

As for the people behind the product, South says it hit them in the pocketbook too.

"Most of them had to apply for unemployment," he says.  
 

"We had a goose that was laying golden eggs at one point in time." - Mike South, porn producer

South adds that the period of transition was particularly hard on the performers who entered the business at a time of prosperity and got comfortable with lifestyle it provided. When the money dried up, some of those performers explored other revenue streams to supplement their income, including prostitution.

"When I came into the business in 1992, we were very tight-knit. Nobody in the industry was prostituting and if they were, they were keeping it way, way under the radar," he says.  

He says they were extremely self-conscious about contracting and sharing STDs so escorting was also frowned upon.

"Nowadays, I can actually count the number of girls who don't prostitute on one hand."
 

Adapting to change

South, whose real name is Strother (South is his porn name), used to be a high-end software engineer and managed databases at NASA's Marshall Space Flight Center in Huntsville, Alabama. He was also a computer consultant before getting into porn.

His background helped him make the switch from the traditional DVD/Blu-ray model of distribution to the web, a move that gave him total control over his product at a time when he felt out of step with industry trends.

"It seems the product has gotten more aggressive, violent and portrays sex in a manner I'm not that comfortable with," he says.
 

Mike South

Mike South produces and directs adult films.




South now produces and directs his own films in in Atlanta, Georgia and releases them on his website, mikesouth.com. He was also a renowned porn industry blogger before recently giving it up.

The local porn scene in Atlanta is tiny compared to California's San Fernando Valley, a.k.a. 'Porn Valley,' but that's how South likes it.

He's more comfortable having more control, and he's still working while some of the biggest adult entertainment companies in L.A. have seen significant cutbacks.

"Vivid no longer produces any product at all. Wicked Pictures cut their production 75 percent from where it was 10 years ago because the market simply isn't there."


The new money model

South says it's unlikely that the industry, as it was, will ever rebound. But there is a new model for making money that doesn't include prostitution.

"The future of pornography is the girl who gets with her husband and makes her own product and markets it to her own audience," he says, adding that operating a subscription-based porn site offers independence and income.

"I can name a half dozen girls you've never heard of that could buy Jenna Jameson with the money they have in their purse right now."

Montreal-based porn actor Shana Lane is putting this into practice. In a video filmed for Day 6 (below), Lane says that, among other things, increased interactivity is helping performers like her reclaim profits.

"You have to be really interactive on your website. You have reply to your clients," she says. "You have to show people it's really you."

Porn-o-nomics: Shana Lane2:56


​Webcamming: here and now

Lynn Comella just attended two of the biggest adult entertainment showcases in the U.S. and offers another perspective on the future of the business.

"One of the biggest changes is the arrival of the webcam industry as a major player," she says.

Comella, a professor of gender studies and sexuality at the University of Nevada, Las Vegas, says webcamming is here, it is now and it is generating big money for performers and for those who own webcamming studios.

"People are paying to play in the world of adult webcamming." - Lynn Comella, UNLV professor 


Lynn Comella

Lynn Comella is an author and an associate professor of Gender and Sexuality studies at the University of Nevada, Las Vegas (Lynn Comella)


"Unlike more traditional forms of pornography that are shot at a studio in L.A. and packaged into a DVD or uploaded online, webcamming offers models a chance to interact directly with customers," she says.

Customers pay for that interaction and the opportunity to collaborate with the performer regarding what he or she might say, wear or do on screen.

Like any business, Comella says the key to success is attracting a lot of customers and performers are doing this with social media.

"Someone might go on Twitter and say I'll be doing a show that starts in ten minutes. Anyone interested in watching can use this affiliate link," she explains.

If the performers can get customers to visit their website through an affiliate link, they get a bigger cut of the profits from the company.


The rise of VR porn

A lot has been made of the potential of virtual reality porn but Comella thinks it's still too new, too unproven and too expensive to hit the mainstream.

"Companies are taking a wait-and-see approach. They're not yet entirely convinced that the consumer demand is there for them to invest in another business infrastructure," she says.

VIRTUAL REALITY

An attendee tries the Oculus VR Inc. Rift Development Kit 2 at a Los Angeles trade show. There is rising interest in virtual reality platforms for online pornography. (REUTERS/Kevork Djansezian)

She also points out that virtual reality — at this point — has it's drawbacks, including price, clunky headsets and the need to boot up, so to speak.

"It takes the spontaneity out of watching porn because you have to put the technology into place," she says.

Comella believes webcamming and virtual reality porn offer different experience, but which one are customers more likely to pay for? Comella says webcamming.

"The jury is still out when it comes to VR porn," she says. "But I don't think the jury is out with webcamming. People are definitely paying to play in the world of adult webcamming."


To hear Brent Bambury's conversations with Mike South and Lynn Comella, download our podcast or click the 'Listen' button at the top of this page.

And come back next week for Part Three of our series "Porn-o-nomics."