overview

This profile looks at the online 'adult content' industries, variously described as having a trillion dollar turnover, a model for commoditisation of cyberspace and an object of journalistic hype or political disinformation.

     contents of this profile

This page considers the overall shape of the online adult sector, debate about its size and regulatory issues. The following pages cover -

consumers - audiences, consumption patterns and consumer issues

business - a discussion of industry sectors and players

networks - debate about online adult content as a driver for commercialisation of the web, profitability, economic relationships and pointers to major resources.

     industries

What are the 'adult content industries'? The lack of agreement about basic terminology bedevils much of the writing about what one purist dubbed the 'X Internet' and others have sought to quarantine in a special X gTLD.

Few government statistical collections offer a tight categorisation of 'adult' goods and services, including online content and retailing of tangible products. In reading the following paragraphs and some of the cited writings it is worth noting that some authors bundle everything from fees for hosting amateur erotica through to fully commercial (pay per play) streamed video and Amazon.com style etailing of vibrators and knickers.

Some key sectors are -

• publishers of erotica (eg text, still images, film/video and games) for free or paid access
• generators of that content (eg video producers and syndicators)
• age verification services (AVS) that underpin restrictions to online access
• other providers of services, such as intermediaries for the processing of payments

We've discussed particular industries in the following pages.

     turnover

How much is the online adult sector worth?

Your guess, we suspect, is likely to be as accurate as that of most commentators. Uncertainty reflects -

• the lack of comprehensive government or academic studies
• the absence of basic metrics
• disagreement about the value and prevalence of non-commercial self-publishing (much of which appears to involve content appropriated from commercial sites or offline publishers)
• the dubious (and often notably self-serving) nature of many industry claims - "an industry where they exaggerate the size of everything"
• the innate difficulty of tracking consumption patterns, investment and revenue that is often illicit

One promoter claimed in 2002 that

the Adult Internet industry generated over US$900 billion in revenues in 2000 making it account for 13% of all revenue generated on the internet and making it the #1 product/service on the Internet today!

Another estimated that

the pornography industry in the United States earns revenues of over $10 billion annually. Of that amount, it is possible that up to $2 billion is spent on porn Web sites, with steady growth forecast

and went on to claim that US Baby Boomers account for most of an estimated US$5 billion per year on adult videos. William Lyon of US industry advocacy group the Free Speech Coalition (FSC) claimed that the online sector had a gross annual profit in 2001 of between US$10 and US$12 billion (significantly more than that of Microsoft).

Frederick Lane, author of Obscene Profits: The Entrepreneurs of Pornography in the Cyber Age (London: Routledge 00) and the Sexbizlaw.com site, claimed in 2000 that the global "online adult market" was worth around US$2 billion a year, about three-fourths of it from subscriptions.

He'd elsewhere referred to the operators of "porn sites" as riding high on a sea of cash although, alas, hasn't provided a detailed map of that sea's depth or extent. One sounding was provided in claims during litigation over the Sex.com domain name that the site generated revenue of at least US$95.5 million in a year and scored 25 million visits a day.

Donna Hughes' 2000 paper The Internet & Sex Industries: Partners in Global Sexual Exploitation highlighted claims that the US market for adult content involved annual sales of US$10 billion to US$14 billion.

Such estimates are questioned in Blaise Cronin & Elisabeth Davenport's thoughtful paper 'E-rogenous Zones: Positioning Pornography in the Digital Economy' in volume 17(1) of The Information Society, in Laura Kipnis' Bound & Gagged: Pornography & the Politics of Fantasy in America (New York: Grove 96) and other studies noted in the Censorship guide on this site.

A 2001 article in Forbes, a publication generally not distinguished by its scepticism, attributed claims of US$10 billion pa for online erotica to uncritical recycling of news about a 1998 report by Forrester Research and claims by Adult Video News (AVN) that US consumers spent US$4 billion on adult vide rentals in 2000.

That report concerned the online "adult content" industry, with annual revenue estimated at US$750 million to $1 billion, with three groups of sites enjoying revenue of US$100 million to US$150 million. Forbes claims that a higher figure is improbable - even if turnover for adult video, sites, phone service, sex toys and publications was bundled together - and questioned claims that US consumers spent US$4 billion to buy/rent adult videos in 2000. It was echoed in commentary (here) in the Online Journalism Review.

Specific features of the Forbes analysis were not particularly convincing for us but the article usefully places claims by adult content industry proponents in context.

The US consumer magazine market for example grossed US$7.8 billion (sales plus advertising) in 1999, with broadcast television at US$32.3 billion, cable tv at US$45.5 billion and professional/educational publishing at US$14.8 billion. Sale and rental of 'legitimate' videos were estimated at US$20 billion in 2000, with cinemas turning over US$7.67 billion. A 1999 estimate by Jupiter Communications, a competitor of Forrester, was that the US market for online pornography was under US$175 million.

Interactive Consumer Broadband: Sex, Sport & Shopping, a 2001 report from UK group Analysys, bravely forecast that broadband erotica would be worth US$3 billion by 2003 on a global basis. Competitors have simply added another digit to such figures.

How many sites and people?

We've noted claims that there are 30,000 to 60,000 "pornography sites" on the net. Researchers at the OCLC suggested that globally there are around 74,000 commercial sites; US industry group UAS/IFA offers an "educated guess" that there are around 200,000 sites. The 2002 US National Academies' report on Youth, Pornography & the Internet suggested that there were over 100,000 subscription sites in the US (with around 400,000 sites across the globe).

That reflected research such as the 1999 Accessibility & Distribution of Information on the Web paper by Steve Lawrence & C Lee Giles discussed in our Net Metrics & Statistics guide and Childproofing on the World Wide Web: A Survey of Adult Webservers, a 2001 paper in Jurimetrics by Daniel Orr & Josephine Ferrigno-Stack.

Others assert that 'adult content' (however defined) is available on millions of pages, in line with estimates of a billion-plus pages on the web, with much of that content being published by enthusiasts and having an ephemeral existence. One 2001 back-of-the-envelope study reported that an AltaVista search for 'porn' identified three million pages (roughly half the number for 'god').

Figures for the number of people employed producing, distributing or otherwise involved in the online adult content sector vary widely. Few are supported by details that would allow a rigorous assessment.

Australia's Eros Foundation, promoting the sector as a non-marginal industry that deserves respect by government, claims that 640,000 Australians are on adult video mailing lists, with around 250 adult shops having a turnover of A$100 million. Supposedly there are 800 legal and 350 illegal brothels, escort agencies and sexual massage services, accounting for 12 million visits to sex workers.

And how many consumers?

A much quoted figure is that "four out of every ten people using the Web have visited an adult site in the last week". That appears to be well off the mark, based on extrapolation from a problematical sample and inconsistent with a range of studies about normalisation of the online population. The following page of this profile examines particular claims in more detail. Other figures are supplied in our Demographics profile.

     regulation

We've highlighted online content regulation regimes in our Censorship and Governance guides.

Key features of those regimes are -

• attempts, often quite successful, to exploit regulatory choke points or otherwise establish borders in a supposedly borderless and unregulated cyberspace
• disagreement about whether online content requires special treatment, with claims for example that in an effort to address substantive problems regulators have prohibited online content that would be legitimately accessed offline
• tensions because what is illicit in one jurisdiction is legitimate in another nation/state (or merely that restrictions are not enforced).

The cost of regulation is unclear and is as contested as its benefits. Some observers have tried to attribute regulatory costs on a per site or enforcement action basis, with for example a very problematical claim in 2002 of $14,364 per item 'taken down' under the Australian regime.





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