Explaining Southern California's economy

Freebie Nights: Why the porn business in California is struggling

If you check in with porn-industry advocates, they'll probably tell you that the last thing the pornography industry needs right now -- from a business perspective -- is an HIV scare coupled with a 2012 ballot measure that would require condoms to be worn by performers. But an HIV scare it has gotten, one that's temporarily shut down porn production in LA, the nation's smut capital and creator of a reported $12.6 billion in yearly sales (the totally SFW map at right shows Chatsworth, the center of the region's porn industry).

This is happening at the same time the AIDS Healthcare Foundation is rounding up signatures to put a ballot measure in front of voters next June that would require condoms in porn media permitted for production in LA. On balance, this doesn't sound outlandish, but certain groups within the porn industry argue that mandatory condom use will create an underground non-condom trade that will be less safe. 

This has been disputed. But the fact is that the porn business is under the same relentless disruptive pressures as other long-standing California industries. I've already written about this in the context of a looming grocery strike. In the porn game, the stress is perhaps even greater. Not least because porn is turning into a commodity that allegedly nobody needs to pay for.

This is from a 2009 MSNBC report, quoting the late Jack Kyser, Chief Economist with the Los Angeles Economic Development Corporation:

“They are definitely struggling…They are subject to piracy like the mainstream industry is, and that siphons revenue away. Then there are a lot of amateurs in the online industry, which is growing rapidly, and they don’t charge for it."

Don't care about quality? You can get plenty of free porn online, according to Paul Fishbein, chairman of AVN Media Network, also quoted in the MSNBC story. This argument is of a piece with "the future is free" position that Wired magazine's Chris Anderson laid out in a famous 2008 article and subsequent book:

The rise of "freeconomics" is being driven by the underlying technologies that power the Web. Just as Moore's law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster. Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero.

Before you get too, um…excited, please note that there's a counterargument, proffered by those pornsters who don't think that mandatory condoms will either drive the nasty underground or send it far, far away from its California homeland. AIDS Healthcare Foundation's Brian Chase mapped this out in no uncertain terms for LA Weekly last year. And LA Weekly concurred with his view that a big business like porn isn't under grave threat from the DIY crowd:

It's true: Perhaps the biggest revenue streams for the adult film industry these days are hotel pay-per-view rentals and cable and satellite channels -- all of which lean toward more slickly produced, tamer fare.

To be honest, it's hard to tell who's really right here. Common sense suggests that not requiring condoms is indeed hideously irresponsible, but you can't discount a certain economic reality, which is that the porn business seems to have been in a near-constant state of disruption since the heyday of "Deep Throat," when porn showed that it could make serious money. 

What's raised the complexity factor is the impact of the Great Recession. Porn was once thought to be recession-proof. But as the MSNBC story I've cited above indicates, the last downturn has challenged that received wisdom. Porn may have been with us forever -- and will probably be with us forever. But the porn business? That could be another story.

Image: Google Maps/Chatsworth, CA: Center of LA's porn industry

blog comments powered by Disqus