Industry operators have sought to balance declines by diversifying their services.
Los Angeles, CA (PRWEB) November 15, 2013
Online piracy and the rapid emergence of free, ad-supported pornography sites have hampered the Adult and Pornographic Websites industry in the five years to 2013. Larger traditional operators lowered prices to directly compete with free sources of pornography, thus hurting industry revenue. “The emergence of free substitutes was initially driven by the economic recession, which forced many consumers to cut discretionary pornography purchases and seek free sites,” according to IBISWorld Industry Analyst Jesse Chiang. The rapid adoption of broadband connections, which has increased at an average annual rate of 18.8% in the five years to 2013, has allowed consumers to download and stream free videos at rapid speeds. The industry has declined at an average annual rate of 0.9% to $3.2 billion, including a 0.5% decline in 2013.
Operators have sought to balance declines by offering a diverse range of products to lure consumers to paid pornography videos or paid pornography subscriptions. Some operators have diversified services by acquiring multiple sites that cater to niche fantasies and fetishes to attract a broader consumer base. Others have invested in high-definition technology, offering consumers an enhanced visual experience, differentiating products from free, amateur pornography. Major companies such as MindGeek and Vivid Entertainment have invested in mobile sites and applications. Still, the industry has been slow to recover from steep declines experienced during the recession largely due to continued competition from free substitutes.
Emerging demand from mobile and tablet devices will drive revenue growth in the five years to 2018 as consumers are expected to increasingly seek pornography and adult sites on such devices. Demand for pornographic and adult websites from emerging countries will also boost operators; consumption will increase with the adoption of internet-ready devices. “There are looming threats to the industry, however, not only due to free sites and online piracy, which will continue to siphon industry demand, but also because of increasing regulation,” says Chiang. Growing regulation could limit pornographic content and increase costs for operators.
For more information, visit IBISWorld’s Adult and Pornographic Websites in the US industry report page.
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IBISWorld industry Report Key Topics
This industry develops and distributes pornographic content to subscribers via the internet. It generates revenue through advertisements and membership subscriptions. The industry does not include offline distribution of pornography.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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