Why porn and journalism have the same big problem

The early days of the Internet were a bonanza for major pornography studios, as the web transformed adult entertainment into an instant, unlimited, and completely private experience — always just a credit card charge and a cable modem away. But what the Internet giveth, the internet taketh away. As the most recent Bloomberg Businssweek recounts in its feature on the rise of the new and controversial .XXX domain, the big production companies have seen their profits shrink by as much as half since 2007, as audiences have fled to aggregators such as XTube and YouPorn that offer up a never-ending stream of free naked bodies. …

In other words, convincing people to pay for to watch sex is a much taller task these days than getting them to pay for a song. …

What holds for journalism in this case holds for sex. In both cases, the competition is so broad that customers are likely to go elsewhere rather than pay. There are, obviously, exceptions in the case of newspapers — the Wall Street Journal has a profitable paywall, and the New York Times appears to be having some early success with its own. But that might be cold comfort for the adult entertainment world.