Recession in Porn Business Has Lessons for Mainstream Advertisers: Faster, Smaller, More Expensive

Last Updated Jan 12, 2010 12:35 PM EST

Pornograpy marketers are still gripped by the recession but are finding new ways to advertise their products and generate revenue, it emerged at the Adult Entertainment Expo. AEE is a porn business conference held in parallel with CES, the giant technology conference held annually in Las Vegas. Both just ended.

And while the business media pays much more attention to CES, advertisers know that it is AEE that often presages the future of their industry. It was porn that laid the economic groundwork for VHS, DVDs, and paid web downloads. Where porn leads, advertisers and traditional media soon follow. That's why AEE this year had panels such as "Online Marketing: Your Key to Success in the New Economy" and the conference sponsor, Adult Video News, reports in excruciating detail on the FCC's latest universal broadband access plans.

The news from AEE was mostly grim. Gram Ponante reports:

The show [AEE] has been shrinking since 2005, with fewer and fewer companies renting booth space. What once took two floors of the Sands Convention Center took one this year around.
Nostalgia abounds:
... each year those who remember the good old days lament the days when even something God-awful would sell 30,000 units at $79.95 a tape.
Those days are gone. Porn is suffering from the same ailments as the music, TV and movie businesses: They can't compete with free content offered on the web, Ponante says:
... frankly, some people were starting to sound a little desperate. "I would be so appreciative if you would buy my movies," I was told by Belladonna [pictured], arguably the world's most recognized porn star, stressing the word "buy."
New promo media and cash streams are starting to look very different from even just a few years ago, when the business was dominated by DVD sales. This year, the watchwords seem to be "faster," "smaller," and "more expensive."

In terms of promotion, porn has its own version of Twitter: PornStarTweets. Performers (who are verified to weed out imposters) upload rotating galleries of photos to accompany their tweets. The experience makes Twitter look lazy.

Full-length movies may eventually be replaced by bite-sized downloads. Clips4Sale offers offers clips (surprise!) for around $1 a minute. Clips tend to be 2 - 5 minutes in length, from a search-able database.

Another new technology is LipStream, in which consumers can call a performer's "home" phone number and chat with them for a per-minute fee. The phone connection is actually an internet-enabled voice protocol that disguises the true location of the performer. Lipstream has widgets to allow voice chat on performers' personal websites, Facebook and MySpace pages.

How these innovations might be adopted by the packaged goods marketing business is anyone's guess -- but they suggest that the future is less about the mass marketing of full-length product, and more about slicing and dicing ever-smaller chunks of content for lower total prices (but higher individual fees), in addition to offering premium customers remote virtual access to stars (or brands).

Old-fashioned bricks-and-mortar retail stores, oddly, may be faring the best. AVN reports:

... chains have barely been affected [by the recession], with Peekay's California stores up 15 percent from last year, and their Washington state stores up a whopping 36 percent--even with an uncommonly snowy holiday buying season. Franks didn't provide specific figures, but indicated that his 18-store chain had scored good profits as well, and that his company is about to open its newest outlet--in Wasilla, Alaska, home of a certain failed vice-presidential candidate.