Nobody wants to pay for their products.



Reuters

The smut business just isn't what it used to be.

The early days of the Internet were a bonanza for major pornography studios, as the web transformed adult entertainment into an instant, unlimited, and completely private experience -- always just a credit card charge and a cable modem away. But what the Internet giveth, the Internet taketh away. As the most recent Bloomberg Businssweek recounts in its feature on the rise of the new and controversial .XXX domain, the big production companies have seen their profits shrink by as much as half since 2007, as audiences have fled to aggregators such as XTube and YouPorn that offer up a never-ending stream of free naked bodies.

Stuart Lawley, the entreprenuer behind .XXX, has a plan to try and reclaim some of that lost revenue -- micropayments. Per Businessweek:

Next year, ICM plans to introduce a proprietary micropayment system. This service, Lawley promises, will help blue-chip pornographers fight back against the proliferation of free and pirated smut online. "We're going to do for adult what Apple (AAPL) did for the music business with the iTunes store," he predicts. Consumers who have become conditioned to grainy, poorly shot giveaways, Lawley says, will get reacclimated to paying for higher-quality hard core. Price, quantity, and specificity are key. Rather than the traditional model--$24.99 upfront for all-access monthly memberships--porn consumers will shell out 99¢ apiece for short clips of niche material (akin to buying a favorite song, not the whole album). Perhaps more compelling, people seeking porn on their mobile devices will have a convenient way to purchase a quickie on the run.

Yikes. Comparing your business plan to Apple is pretty standard corporate trope these days, but in the case of porn, the iTunes analogy is hopelessly inapt. Here's the problem: Pornography is mostly a commodity product. Music is not. People have favorite bands and expect a certain level of production value in their music. Bruce Springsteen devotees aren't just as happy listening to Bob Seger or an a cappella rendition of "Born In the USA." It's at least a little rarer to have favorite porn stars. And the audiences aren't demonstrably sensitive to production values. Worse yet, the tools for do-it-yourself filming are improving every time Apple upgrades the iPhone's video camera.