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Obscene Losses
Portfolio.com ^ | November 2007 Issue | Claire Hoffman

Posted on 10/23/2007 9:40:21 AM PDT by Lorianne

DVD sales are in free fall. Audiences are flocking to pornographic knockoffs of YouTube, especially a secretive site called YouPorn. And the amateurs are taking over. What’s happening to the adult-entertainment industry is exactly what’s happening to its Hollywood counterpart—only worse. ___

On Friday, May 18, Steve Hirsch, founder of Vivid Entertainment Group, the world’s largest producer of adult videos, was expecting a mysterious visitor. But Stephen Paul Jones was late. When Jones, an unknown figure in the pornography world, finally arrived in the all-white reception area of Vivid’s Los Angeles offices at 2 p.m., he was apologetic. His private plane had broken down, he explained, and he was forced to fly commercial. Hirsch, dressed in a T-shirt and jeans, found that excuse a little slick. But he was eager to speak with Jones, so he let it slide and introduced him to two Vivid colleagues. When the four men sat down in the company’s conference room, Jones got right to the point: He wanted Vivid to buy his website, YouPorn.com.

As its name suggests, YouPorn lets users upload and watch a virtually unlimited selection of hardcore sex videos for free. The user-generated clips on YouPorn—like those on YouTube, the site it mimics—range from the grainiest amateur footage to the slickest professional product. Also, like YouTube, the site has far more traffic than income. Just nine months after going live, in September 2006, YouPorn was on pace to log about 15 million unique visitors in May, Jones told the Vivid executives, and its audience was growing at a rate of 37.5 percent a month. Today, YouPorn is the No. 1 adult site in the world; Vivid.com, a pay site, is ranked 5,061. According to Alexa, a website-ranking company, YouPorn’s overall rank is higher than CNN.com (84), About.com (114), and Weather.com (195). (Those numbers are averages for the three-month period from mid-June to mid-September.)

Blond, barrel-chested, and wearing a sport coat, Jones oozed Silicon Valley confidence. According to Hirsch, he mentioned his Stanford M.B.A. repeatedly. He offered reams of documents and audience data, emphasizing YouPorn’s global reach. (Only 12 percent of the site’s traffic comes from the U.S., he said.) Jones told the men that he and one other executive, a young Malaysian man living in Australia, were the owners of YouPorn, and he stressed that with the site’s traffic, its opportunities were manifold: dating, gaming, mobile content, pay-per-view, webcams (“already very popular in China”), and more. He shared his vision of turning YouPorn into a “very cool brand, perhaps the Virgin of adult entertainment.” As Jones rambled on, Hirsch and his executives traded raised eyebrows. Malaysia?

Still, they were intrigued by YouPorn—and more than a little intimidated by its size. In recent years, competition from the internet had cut deep into the porn studio’s revenues. DVD sales, once Vivid’s financial bedrock, were down almost 50 percent since 2004, and the proliferation of cheap Web-based videos was stealing market share from the company, which specializes in high-end sex films. Vivid and its top rivals—Wicked Pictures, Evil Angel, Digital Playground, Red Light District, Penthouse Media Group, and Hustler, to name a few—had lately been getting an unwanted glimpse of the overnight crisis that the file-sharing revolution brought to the music industry and Craigslist brought to newspaper classified ads.

The meeting lasted an hour. As Hirsch listened to Jones’ pitch, he considered the risks of acquiring YouPorn. Hirsch had been in the adult-entertainment business long enough to be mindful of its legal pitfalls, and that was a chief concern. How do you verify the age of the participants in these thousands of sex videos—or, for that matter, the age of the audience?


TOPICS: Business/Economy; Culture/Society
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Synopsis via Slate: An article in the November issue of Portfolio reveals the undoing of the pornography industry, primarily at the hands of a free-porn site called YouPorn. The decline of DVD sales makes the porn world's struggle "directly analogous to what's happening to the music industry, but worse."—D.S.
1 posted on 10/23/2007 9:40:22 AM PDT by Lorianne
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To: Lorianne

There is a free YouPorn site available? Now we all can enjoy universal porn. Wonder what this will do for Dem campaign fund raising?


2 posted on 10/23/2007 9:46:42 AM PDT by Jigajog
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To: Jigajog
"Wonder what this will do for Dem campaign fund raising?"

Heck, what will the 'rats be left to provide free for the voters? Nobody will be interested in gov't services anymore, they'll be glued to the 'net.

3 posted on 10/23/2007 9:57:43 AM PDT by Paladin2 (We don't fix the problem, we fix the blame!)
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To: Jigajog

You hit on something there.... If the porn purveyors can’t make any money off porn because its being given away, there won’t be the millions available to keep throwing fundraisers for the leading Dem candidates. Who else will Meathead keep getting to fill out all those tables at Hillarys constant birthday celebrations?


4 posted on 10/23/2007 9:58:22 AM PDT by bpjam (Harry Reid doesn't even have 32% of my approval)
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To: Lorianne
He shared his vision of turning YouPorn into a “very cool brand, perhaps the Virgin of adult entertainment.”

Sometimes the jokes just write themselves.

I'm surprised that there isn't a porn NetFlix out there. You order the DVD, it arrives in the mail, you watch it and send it back. PornNetFlix then disinfects the DVD and sends it to the next person asking for it.

5 posted on 10/23/2007 10:05:16 AM PDT by KarlInOhio (May the heirs of Charles Martel and Jan Sobieski rise up again to defend Europe.)
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To: Lorianne

So in essence, its a spin off on the old saying “Why buy the cow, when you can get the milk for free?”


6 posted on 10/23/2007 10:06:14 AM PDT by Paradox (Politics: The art of convincing the populace that your delusions are superior to others.)
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To: KarlInOhio
I'm surprised that there isn't a porn NetFlix out there. You order the DVD, it arrives in the mail, you watch it and send it back. PornNetFlix then disinfects the DVD and sends it to the next person asking for it.

Right. And they could save money by using only those mini-DVD's, after all, those hold about 30 minutes of video, who needs more?

7 posted on 10/23/2007 10:07:47 AM PDT by Paradox (Politics: The art of convincing the populace that your delusions are superior to others.)
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To: Lorianne
Only 12 percent of the site’s traffic comes from the U.S., he said.

Sad to see that we're outsourcing pr0n but they're only, ah, doing the...er, stuff...that Americans won't...oh, never mind.

8 posted on 10/23/2007 10:11:08 AM PDT by Billthedrill
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To: Lorianne

It’s not really like the music industry problem. There aren’t a plethora of “amateur bands” out making music and posting it, and consumers aren’t flocking to crappy amateur music instead of well-produced professional albums.

The music industy’s problem is that people are stealing their intellectual property and setting up sites to give it away.

The PORN industry’s problem is that porn doesn’t have to be professional, and in fact many people seem to enjoy it more when it seems real, rather than faked. Once the porn industry saw how much money they could make selling DVDs of amateurs having sex, they should have realised they were “screwed”.

After all, at that point they were simply distributers of a product that can easily be distributed directly through the web at virtually no cost.

So if people are willing to not get paid, they can produce and distribute porn for free, at no cost to themselves.

The Porn industry’s only hope seems to be to pass laws severely restricting easy access to on-line porn. They need laws that heavily regulate who can appear in a video, like proof of age, proof of protection, regular medical exams. They need a minimum wage law for appearing in movies, they need web sites to be forced to restrict access to people who prove they are 18, and to restrict videos to those who have spent big bucks to prove the actors are all legal and willing.

In other words, all the stuff the Porn industry has been fighting for years, was the only thing that would save them.


9 posted on 10/23/2007 10:13:36 AM PDT by CharlesWayneCT
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To: KarlInOhio
KarlInOhio: I'm surprised that there isn't a porn NetFlix out there. You order the DVD, it arrives in the mail, you watch it and send it back. PornNetFlix then disinfects the DVD and sends it to the next person asking for it.

There is such a "service". I read about it once. Don't recall the name of it or the cost or anything (not a fan of the stuff myself), but it does exist. There are services for video games, too.

Ewwwwwwwwww your comment re: disinfecting

10 posted on 10/23/2007 10:20:03 AM PDT by mountainbunny
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To: KarlInOhio
There is...

Just put "porn netflix" into a search engine. There are several such services.
11 posted on 10/23/2007 10:26:09 AM PDT by Codeflier (Implement Loser Pays)
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To: Paladin2

I remember back in 2000 that a newspaper article said that the distributors at a porn convention (in Atlanta?) all agreed that they would try to help elect Al Gore.


12 posted on 10/23/2007 10:26:32 AM PDT by DeweyCA
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To: CharlesWayneCT; Lorianne
In other words, all the stuff the Porn industry has been fighting for years, was the only thing that would save them.

One might even say they are "hoist by their own 'petard'"... /grin

13 posted on 10/23/2007 10:34:17 AM PDT by tarheelswamprat
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To: CharlesWayneCT

Yep. Just like Indian Gaming paying off congresscritters to ban online gaming.


14 posted on 10/23/2007 10:35:31 AM PDT by lesser_satan (READ MY LIPS: NO NEW RINOS | FRED THOMPSON '08)
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To: Lorianne

We learn so much useful stuff on FR. :)


15 posted on 10/23/2007 10:44:53 AM PDT by Schnucki
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To: Schnucki
We learn so much useful stuff on FR. :)

As always, there seem to be a lot of expets on this this thread :)

16 posted on 10/23/2007 11:00:50 AM PDT by Born Conservative (Chronic Positivity - http://jsher.livejournal.com/)
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To: Lorianne

I don’t know whether to laugh or cry. Serves the Flynt wanna-bes right, but it’s just making porn that much more easy, free and enormously widely distributed... and easier to access for children.


17 posted on 10/23/2007 11:11:38 AM PDT by pianomikey (Freedom is never more than one generation away from extinction. -Reagan)
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To: CharlesWayneCT
In other words, all the stuff the Porn industry has been fighting for years, was the only thing that would save them.

Fairly common in industries where any schmoe can deliver a similar product, to want government to step in to regulate it. I remember Maine crab fishing lobbies attempting to regulate and restrict private enterprises out of existence.

There is an interesting spice of irony that the porn industry's best chance to protect itself is to support changes that would do the most to protect children, both from exploitation and from consuming adult entertainment.

18 posted on 10/23/2007 11:30:58 AM PDT by pianomikey (Freedom is never more than one generation away from extinction. -Reagan)
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To: mountainbunny

“Ewwwwwwwwww your comment re: disinfecting”

That was the entire point of the post, I’m sure ;) Good joke, tho


19 posted on 10/23/2007 11:32:09 AM PDT by pianomikey (Freedom is never more than one generation away from extinction. -Reagan)
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To: CharlesWayneCT

I don’t want to disagree with your general point, but why would you say that there aren’t a plethora of “amateur bands” out there? That’s exactly what the situation is. With full access to the CD replication business and no overlords to support or cater to, there are thousands of independent artists making good money in the music business. Go to CDbaby.com or diskmakers to get a feel for how big, and how lucrative this business is.

The decline of the music industry is at the Titan-end of the food chain, not for little-guy performers who are prospering and reveling in their access to nationwide audiences.


20 posted on 10/23/2007 11:41:45 AM PDT by VaFarmer
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