This is how porn sites make money

Believe it or not, porn is everywhere. It’s in people’s mobile phones, laptops, hard disks, and of course on the internet. It’s been mankind’s discreet sidekick for centuries, nurturing our voyeuristic side. Thanks to the taboo and the stigma that comes attached to it, Indians would rather not discuss porn in an open forum and try and tuck it safely into the secret pockets of their lives.

At a time when the country is torn with the porn controversy, Business Insider India digs into the dynamics of this ingeniously sneaky trade to find out how it really works.

For starters, porn statistics are notoriously hard to get hands on. Judging by the fact that many of these enjoy over 5 million hits per month, one can safely presume they are making serious moolah.

However, when you turn to a porn site, its free content, and most ads you see are of other porn sites. Also, after piracy hit online porn hard and the recession struck harder in 2009, most adult movie producers admitted that profits have tanked 30-50%. So how did they stage a comeback, and how are they making any money now? Let’s decode the financial model of the porn industry.

How big is it?
Porn is worth over $100 billion globally – that’s bigger than some of the biggest corporations across the world. Around 10% of that comes from the US alone; however the numbers are shrinking, thanks to free porn. However, just to give you an idea, there are 25 million porn sites worldwide and they make up 12% of all websites and over 30% of all web traffic. Around 11,000 hard-core porn movies are shot annually at the global hub for porn - California's infamous San Fernando Valley, where porn as we know it was born.

However, the 2009 recession left this industry helpless, thanks to piracy and tanking DVD sales. A mid-sized adult entertainment would cash in around $350,000 a month in DVD sales before the recession, and the figures dropped as much as 50%. However, the numbers are recovering, and with more diverse mediums to choose from, the industry has been forced to innovate.

But it’s all free!
Contrary to public perception, free porn may be more widely available, but it forms a small part of the entire gamut of products the industry offers and the audience it caters to. Look beyond the ‘free’, and you’ll see ‘premium content’. These include HD videos, no ad/pop-up promises, unlimited downloads, online Live Cam streaming, and so on. Paid users can ask the website to deliver content to their email, or physical addresses. While you may never know, many do sign up for it as they like the convenience it offers.

But how do they earn?
The allure really is that subscriptions offer priority access to new content from your favorite ‘star’ that would take months to seep into the free world. There is also the allure of personalized sex toys that offer the experience of being with your favorite star, adult chat rooms and dating sites. These premium services come at a cost, and when millions sign up, it’s a profitable business to be in.

Porn sites are also smart. They offer a wide range of payment options to choose from daily, weekly, monthly, quarterly and even yearly. Just like your common newspaper/magazine subscription, the longer you sign up for, the more discounts you get offered, and the more your brand loyalty increases. These subscriptions cost anywhere from $1-15 a day. While it might be too much for you for a mini bathroom session, there are millions who sign up for it.

While a website may earn primary from subscriptions, it also cashes on man’s primitive lust for flesh. It makes money off traffic from other similar websites which it redirects. That explains why you only have porn ads on porn sites. These ‘similar services’ refer to adult dating sites, online adult stores, enhancement drug stores, adult gaming sites and so on. This forms a intricate and complex nexus of websites, all making money off each other, and cashing on your instincts, and that is what funds the ‘free mini clips’ you get to see. What to see the full video? Pay up.

To give a sense of the traffic, Xvideos, world’s biggest porn site enjoys 4.4 billion page views and 350 million unique visits every month. If Google data is anything to go by, the other four of the top five porn sites combined enjoy more traffic than Wikipedia (take that!).

How else do they make money?
3D porn has also made a red carpet debut onto the global porn arena. With TV companies going bonkers over their latest 3D TVs and Smart LED screens, some of the more mature porn markets are ready to pay for 3D porn that’ll give you the sense of…of…ahem ahem. Anyway, these leave you poorer by around $10 or more, and there are people queuing up to pay. Porn sites had the foreboding that DVD sales would wane, and have also rolled out ‘video on demand’ services to adapt to the transforming user-base.

Also, there are the actors, and the loyal fan-base they come with. While we don’t have any such event in India, in the US, UK, Australia and many other places special events are held where you could get to meet your favorite porn stars, click a selfie, and if you’re really polite and nice, even get to touch a body part. Passes to these shows are of course not free. There are also porn award programmes and the TV viewership they garner.

Last but not the least are the major hotel chains like Marriott, Hilton and Westin to name a few. These bring serious money to the industry without ever a mention of the same in their official reports. Adult titles are available across the world as ‘in-room entertainment’ in most countries around the globe and a fare share of the money hotel guests pay goes to the studios.

Consider this reach across genres and the millions of independent artists who run their own websites (it costs nothing really, just a cam and a few spare dollars), and you might get an idea of how big this business actually is.

However, the unwillingness to pay to have a good time is what is biting at the knees of this burgeoning industry. A lot of commercial porn studios blame the tube sites pick up ad revenue from page views. Fact is these sites at least pay royalty for the free porn billions view.

Long story short, while the adult industry is not a license to mint money anymore, but where there is loyalty, there is money, and human lust never comes with a recession.

Image credit: Indiatimes