Comfort porn during recession?

[gaydemon]

Do you think porn will be hit badly by the recession?

My own theory is that things like porn, chocolates.. small comforts will not be affected (at least not too much). When people can’t afford the big things they allow themselves some small luxuries like a membership to a porn site.

Am I wrong? Will we see porn being hit as well, it just hasn’t happened yet?

[CJ-KJCASH.COM]

I completely agree with you Bjorn. All of a sudden when you have to cut ouot all the big stuff, a buck or two a day for decent porn doesnt sound like such a big deal. Cheaper than a latte at the coffee shop...

[Paul]

I'm not sure...
Two of my credit card companies just doubled my interest rate and my bank charges extra now for automatic payments of >10/month. I've been thinking about dumping one of my memberships until things pick up or trying some of the trial memberships short term to find some new, less expensive sites.

A lot of my friends have been dropping online porn in favor of the DVD by mail rentals.

I hope you are right.

[marcjacob]

I've been thinking about dumping one of my memberships until things pick up or trying some of the trial memberships short term to find some new, less expensive sites.

I think thats what alot of surfers will do. Trials will become more important. Ive made sure I have some nice sponsors with pay per sale and low cost trials.

Certain full price sites are still selling like crazy for me. I think surfers will still buy quality sites, and still retain on sites which give them what they want. Sites which take their money and never update will go down quickly now as both surfers and affiliates move to better sites.

This is a good thing though. Quality sites will earn more, crap sites will die. It might even be a long over due "clean up" of the adult industry.

[dzinerbear]

I've heard from a number of sponsors that members are cancelling, citing the recent economic problems as a reason. However, I think that guys can only go for so long before they're chomping at the bit for something new.

On the downside, the Canadian dollar is sucking really bad at the moment. It's great for me because I get an instant raise when I take those US cheques to the bank. But if I were buying a $24.95 membership, it's over $30, a $39 membership is nearly $50. And consider that over 500,000 Americans lost their jobs last month. So I think we have some challenging months ahead.

Michael

[basschick]

i think we'll see a drop in sales but i suspect that porn will keep selling for the people who aren't in dire financial trouble.

[BabyMaker]

i think for now, for my sales, we are fine, but i had a hard drop at begining of the depression, this is going to be bad, and i think we are not immune, i am not even figuringing credit cards, you have to accept default on debit cards, which are the same we rely on, they die too, from overdrafts and people not having money. People spend more than they have by $1 and get charged $35 they don't have and that ends up being $300-800 in 5 days and they don't have it. They default.

[q1sites]

Its an interesting question, the chocolate effect.

The chocolate effect applies to alcohol, cigarettes and cosmetics, but apparantly not to porn and gambling, according to the washington times (http://www.washingtontimes.com/news/2008/aug/13/recession-proof/). We'll see.

What I find interesting is that these things have in common is that they are not "rational purchases" - there are large elements of addiction / impulsivity/ compulsion / buzz / naughtiness / secrecy / hoarding about them - at least for some.

Some? As an industry, we probably don't want to think we are supplying "addicts". But that's probably what our best customers are. Most of my friends have never or only occassionally joined a paysite, although many look at free porn. But running several sites that are only loosely related in niche, I notice the same members tend to join each at some time, and correspondence from and between members talks about this site and that site that they have also joined.

If you do a search on "porn addiction" you get a whole lot of cranky religious stuff, but some serious scholarly articles that help business when you realise you are selling mainly to porn fanatics. Really it comes down to (1) the psychology and economics of selling and (2) ways of making your site psychologically "sticky", that is re-enforcing the behaviour of joining (or retaining members).

So, one of the early theories about buying porn is about the 3 As - accessibility, affordability and anonimity. According to this, in a recession, more people will have more time on their hands (accessibility). But we need to think about affordability too. People are looking for value - getting a bargain has become a compulsion in itself. Woolworths, empty of customers for years, is now being mobbed cos they have slashed the prices on the same old tat!

So, will sales go up like chocolate? NO. Will they go down? Yes, of course. Will regular buyers still want their porn? Yes, but they will be more picky. And we'll have to be less greedy.

[HunkMoneyLuke]

i am seeing a lot of rebills getting declined last/this month, which is affecting overall profits.

[TropixxxMichael]

i am seeing a lot of rebills getting declined last/this month, which is affecting overall profits.

I think this hit it right on the money. (So to speak.)

Credit card companies are lowering credit limits as we speak.

I think it might get interesting.

[Adam Mason]

This might not be a popular answer, but I think sales will go down. People with less money in their pockets are finding it increasingly easy to get off for free simply by visiting tube sites.

Over the past 3 - 4 months the dollar has grown in strength - as much as 25% to the GBP. While that's been a nice boost for UK companies such as myself, it's now making our product 25% more expensive to buy here in the UK. I will be adjusting my pricing down in the new year as a result.

[Titanmen]

This is the first recession where adult content is so freely available online. In times past consumers still had to pay or rent adult content. This time they can find all the free and pirated content online, so this time it’s going to be different. The days of porn being recession proof are over!

As always good product will continue to sell, while mediocre product will die. It’s always the stuff in the middle that gets hurt the most. The high end and the low end products usually survive, but the mediocre or poorly run companies will get hurt the most. The more different types of revenue streams you have the better chance you have to make it thru.

We are going to need to promote and market our way thru this recession. There are still a lot of people that will buy when the price is right..especially gay men.

[AlexManifestMan]

The days of porn being recession proof are over!

We are going to need to promote and market our way thru this recession. There are still a lot of people that will buy when the price is right..especially gay men.

I could not agree more. In my past life, we always tightened our belts and marketed even harder during rough times. Dumping more cash in as need. The next two years are going to wipe out a lot of folks. In my primary niche we have two main competitors. There will only be two of us when this is over.

Smart companies with good content will do fine. The others, well not so much.

[gaydemon_jr]

Do you think that affiliates and paysite owners will be hit in the same way though, and in the same proportion?

For instance, will free site owners notice an increase in traffic from people searching for free porn, and as a result may make enough sales to stay stable.

[Gaystoryman]

i am seeing a lot of rebills getting declined last/this month, which is affecting overall profits.

I think that is bang on, these days. The trial option might also be revived, or become more dominant, but with slightly longer periods, such as 7 or 14 days.

People gotta have their bit of flesh. :D

[Marcelo Lima]

1) People are spending less on their credit cards for the first time in a decade - people are using cash and debit, basically buying what they can afford in the now. Throw on top of that reductions in credit lines.

2) With the exponential growth of free content and tube sites many people will find ways to satisfy themselves with free content, perhaps occasionally splurging on a pay site - but they will be thinking twice when they reach for their credit card. Expect to see an increase in "Buyers Remorse" and associated chargebacks.

3) Rebills will continue to decline. As new sites continue to emerge (and this will continue to increase as webmasters bring new projects to market, desperate to continue to eek out a living in this industry) people will spend a month here and there at different sites. Why rebill, you can join for a month, and then try something else out, the next month etc. etc., maybe come back for a month in 6 - 9 months and catch up on all the stuff you missed.

This is the trend as we see it today after 11 years in this business..

Our only hope is that at the very least there is stability on the 3rd party processing front - but with times like these, we aren't holding our breath.

[Mickey]

i am seeing a lot of rebills getting declined last/this month, which is affecting overall profits.
yes i agreee, hitting it right on the head here Luke..

Decline in rebills clearing and people canceling due to "money issues" is way up for us...

[Marcelo Lima]

Titanmen wrote : "We are going to need to promote and market our way thru this recession"

I agree... but keep in mind this is a double edge sword...

As everyone pushes hard and doubles up on their marketing effort we are increasing the supply of free content out there - basically flooding the market further. Add to that fact that there will be people out there (most likely those on the verge of going under) that will really push the boundaries and start to give away really good content in hopes of luring in customers...

Well, when there is more out there, and possibly better free stuff then there is now, people won't have a need to join. They will have more than enough to get off on.

The ones that will take a big hit in this scenario will be anyone dealing in a saturated niche, or dealing exclusively or extensively with licensed content.

[Adam Mason]

It's odd that I am not seeing a fall in rebills - every month they are still going up. And the decline rate for failed rebills hasn't moved for me.

[Northstar]

The other question would be are in the beginning, middle, or end of the current world recession? No one seems to know for sure.

[Squirt]

This is the first recession where adult content is so freely available online. In times past consumers still had to pay or rent adult content. This time they can find all the free and pirated content online, so this time it’s going to be different. The days of porn being recession proof are over!

Well said and right on the money!

Lightspeed on GFY has recently had a meltdown because tube site conversations are taking over regular adult business threads. More and more on the straight porn side of the industry are turning to creating tube sites to build traffic.... to try and get more sales of all things!!!!!

Last I checked PornHub was number 29 on Alexa for highest traffic, right under Weather.com! YouPorn is number 41 ranking higher then DoubleClick, Adobe, Netflix the Fox News Channel and the BBC. wake up people