Porn companies feel online piracy’s pinch - and don't like it

By Alex Zaharov-Reutt
Monday, 14 January 2008 15:16

Opinion and Analysis

Faced with the threat of piracy through X-rated video sharing sites, at least one adult content producer is suing their video sharing competition, while the on-demand nature of online video dents DVD sales.
Reuters’ report on the adult content/porn industry facing up to the same kind of challenges that the traditional media world has faced with sites such as YouTube is fascinating, if for nothing else the fact that for once, the porn industry is following the media industry, rather than leading it.

For years, adult content has spurred the development of VHS, DVD movies, adult channels on cable TV, pay-per-view, video streaming, online payment systems, adult channels on mobile phones and more.

Yet even though adult video content has been available on peer-to-peer sharing systems for years, it took good ol’ traditional non X-rated video, whether user generated or copied from commercial content, to take YouTube from non-existence to a company scooped up by Google for US $1.6 billion.

Ever since, the race to be the next ‘YouTube’ has hotted up, with hundreds of me-too sites, some of which now exclusively offer adult content, much to the chagrin of adult content providers who sell movies on DVD.

The adult company suing an online video sharing site is Vivid, who are suing the Adult Entertainment Broadcast Network (AEBN). Steven Hirsch, the co-founder of Vivid told Reuters that: “We're dealing with rampant piracy, tons of free content".

Free content makes it very hard to make money from products people are no longer buying, causing traditional adult content providers to worry about their profitability and ability to produce future content. Vivid are reported to have had 80% of their $100m profit in 2006 derived from sales of DVD movies. Sales in 2007 of DVDs delivered only 30% of their profit, showing just how big video sharing's impact has been, at least at Vivid, arguably the biggest producer of traditional adult content.

Sites such as XTube, RedTube and PornoTube host user-generated content as well as inevitably having commercial X-rated content uploaded to their systems. These sites make money through advertising – just as most other commercial sites do today.

How have the adult companies tried to co-exist with video sharing sites? Please read onto page 2 to continue...