Internet pundits like to suggest that the Web is built on porn: If it weren’t for the popularity of smut and its associated advertising and subscription revenue back in the late 1990s, other media business may never have figured out how to profit from online offerings.
So they say. Why, then, is venerated magazine pornographer Playboy Enterprises losing money on its digital products while newspapers and movie studios are making gains figuring out how to shift their businesses to digital? Playboy’s revenues decreased 8-percent to $78.5 million in its first quarter, announced Tuesday. Digital revenues specifically fell 3% down to $15.2 million from $15.7 million in the same quarter lat year. "Our publishing and domestic entertainment businesses continue to face unprecedented change in the way consumers access and use media content," said CEO Christie Hefner.
That means that porn consumers aren’t buying as many magazines, but they’re also less likely to pay a subscription to view Playboy’s online stuff. Free sites that rely solely on advertising revenue are taking Playboy’s place. If Playboy wants to stay relevant, it needs to find a way to encourage people to pay up for content. Newspapers haven’t succeeded yet with this method, and many of them are taking down their "paywalls" and offering archives for free. But movie studios, faced with increasing piracy and popularity of peer-to-peer video sharing sites like BitTorrent, are learning to sell their films on the Web without making buyers come to individual studio or movie Web sites. It is slow-growing business, but at least it is growing, not shrinking like Playboy’s digital revenues.
If you’re a forward-thinking movie watcher who wants to download a copy of "I Am Legend" to view on your computer, you go to the Amazon Unbox store or the Apple iTunes store, not the Warner Bros. web site. If you had to visit every studio’s Web site, you probably would stop buying movies online. Similarly, Playboy fans shouldn’t have to visit Playboy’s site to buy their fix — that’s asking too much. Instead, perhaps there’s a business opportunity in one-stop online porn shopping. Whether Playboy’s movies will show up on an X-rated section of the iTunes store is definitely up in the air.
Porn video sites that offer streaming video similar to YouTube, are popping out with no sign of stopping. While the film and music industry face piracy on a daily basis, they have managed to find other avenues for return. Apple’s iTunes store is definitely one avenue. Many music artists are even taking tunes directly to listeners. Playboy’s strategy would have to take all these factors into account. Hefner et al will have to find new methods of distribution and subscription or simply produce more porn.
