After 11% less sales in 2006, the drop of sales reached the 20% mark in 2007 - i've seen even higher figures mentioned, but research that for yourself.
Now it may come as a surprise here that business insiders do NOT claim piracy/filesharing for these losses. But rather the emerge of web 2.0 sites like YouPorn, PornoTube, DialyMotion etc etc. Vivid, the largest adult company, even expressed plans to puchase YouPorn and establish it as a brand and/or platform for a new style of business ventures.
They also praised YouPorn as a stronghold for amateur style content. Something Vivid obviously doesn't have.
OK, i must admit that i hardly ever go to those sites. For me they are a complete waste of time. What you find there are hundreds, if not thousands blurry 1 min samples of mainstream movies. Or homemade flicks, usually extremely grainy and dark. Maybe, when you search for many hours, you might find something worthwhile. I don't have that time.
Clear facts: These sites have huge traffic. Alexa f. ex. ranked YouPorn as the #32 world wide. OTOH the content on these web 2.0 sites is completely different compared to what Vivid and other companies are selling - low resolution samples or amateur clips versus full-length high resolution movies. The only edge these sites have is being free and having a plethora of content as unpredictable as a jungle.
So how can there be a competition after all? To begin with, most people do not have the thorough knowledge of the biz like me. Thus my ignorance of these sites ain't representative at all. However the average user:
- just can tell the names of a few names of his favorite porn stars,
- has seen tiny images of the box covers of DVD releases with them (thus having little indication if those are worth buying)
- knows they are on something like 25 paysites (each charging $25 or more) with only a few scenes presenting a particular porn star.
Now this person might more or less give up on the mainstream content. And just spend hours on YouPorn etc. Now a very trivial circumstance kicks in: People have to work and take care of their lives in general. And after spending 2 - 3 hours on YouPorn there simply isn't much time left to spend on shopping for other content. They may still buy a few DVDs. But way less than before. Here's your simple reason why the web 2.0 porn sites cut into the adult DVD sales.
I expect this tendency to continue. But not that it will kill the adult industry. Far form that! But i expect the business to change considerably. Maybe in a way similar to the music industry. For example that the star will become more important than the company. That those models/stars who are coming up with distinctive and unmistakable content will play a role like independent acts in the music industry. Such as having a loyal fanbase, with people willing to pay for their creations. In case they can find them easily - like when they have their content bundled on one place, like a personal site. Or when they work only with a few companies.
So far the web 2.0 sites have affected DVD sales more than mainstream paysites. Simply because physical media is getting less attractive anyway (downloads are more convenient). But there's also the competition web 2.0 sites versus mainstream paysites - assuming that we've just seen the start of web 2.0 sites, with many more to emerge. People still will be willing to spend money on porn. They will become much more picky. But they also spend their bucks because of loyally liking a model.
