The Wall Street Journal tapped into its naughty side today with a feature about how the Internet is effectively killing off “pornography” provided by cable and satellite television service providers.
Because pornography is so readily available for free online, reports WSJ‘s Sam Schechner and Jessica E. Vascellaro, fewer customers are subscribing to video-on-demand and pay-per-view adult content.
While this fact likely seems entirely obvious to basically anyone who’s ever spent anytime online, this is the first time cable and satellite providers have been willing to discuss just how much of their business is dependent on adult films.
WSJ reports:
“On Thursday, satellite provider DirecTV cited ‘lower adult buys’ as a cause for weaker pay-per-view revenue in its second quarter earnings. That followed Time Warner Cable Inc.’s admission last week that shrinkage in the adult category was responsible for more than a third of a $14 million drop in video-on-demand revenue. While only a sliver of the cable company’s $4.9 billion in revenue for the quarter, porn is one of TV providers’ most profitable segments.”
So the television industry is experiencing “shrinkage,” eh? That’s a classy way to put it.
The downsizing isn’t restricted to lower revenue from pornography. Cable providers and TV networks have reportedly begun to cut back on the number of shows they make available online the day after the show airs on TV. Some believe this cuts into ratings and increases the number of subscribers who cut their cable package altogether, and opt instead for Internet streaming options exclusively.
The television industry saw a peak of pay-per-view and on-demand pornography revenue in 2008, which topped at about $1 billion total, for the entire industry. By last year, that number had dropped to about $899 million, according to research firm SNL Kagan.
Part of the reason for the drop is that television providers charge far too much for an adult film rental, about $10, or twice as much as they charge for a regular Hollywood flick.
While it’s difficult to gauge exactly how much money TV providers are making from adult content — they aren’t particularly willing to expose such details — a look at some of the content providers’ revenue gives clues to how bad the situation is. Revenue for Playboy Enterprises, for instance, which broadcasts Playboy TV and Spice (among others), has seen revenue drop from $75.6 million in 2007 to only $44.4 million in 2010.
Fortunately for you, er, connoisseurs out there, some adult industry leaders are responding to the challenge by upping their game, and creating better-quality content.
“I don’t think you want to get down in the trenches and slug it out with cheap porn on the Internet,” said Bill Asher, co-chairman and co-owner of Vivid Entertainment. “Our job is to come up with unique, interesting content, not just more of what’s out there.”
