jayeff

The life cycle of an industry is much more complex than merely the big swallowing up their smaller competitors and the smallest of all dropping out.

The reality is that among the pioneers in any industry you care to examine, barely a handful ever prove able to move on to the next phase. Some of their trade names may survive, but the people who established those businesses will no longer be in charge.

And why should we expect them to be? The talents needed to build a business from scratch are completely different from those needed to run a corporate empire. Since both are rare, how much more rare it must be to find a single person who combines both.

Someone rightly pointed out that we are now in a consolidation phase. But this isn't good news even for those able to make acquisitions. Indeed this phase only exists because most of the early businesses reach the point where they can no longer generate growth except by acquisition. During this phase you also see companies attempting to control more of their supply line: in our case, by offering exclusive contracts to photographers, designers, etc and by buying up traffic sources.

But once the initial benefit of such acquisitions and extensions is over, most will prove to have been mistakes. Typical of the next phase will be companies "returning to their roots" and otherwise divesting themselves of many of their earlier acquisitions. For many that phase will be a last ditch attempt to stay afloat, but they will be too damaged to do so.

There are no reliable statistics to help us be sure. But it would be predictable for an industry at the stage at which online porn is now, for overall growth to be more or less stagnant. That is because the vast majority of the early entrepreneurs have gone as far as they are capable of going. What will propel us beyond the next phase is not people being smart or able to adapt, but the arrival of the suits and bean counters.

Because industrial development is not about the biggest relentlessly bigger. Rather it is like evolution, with sudden genetic mutations proving more successful than their predecessors. What will happen is that 10-15 years from now, a few of today's bigger businesses will have survived with their present owners and be very similar in size to today. A smaller number will still exist, but in name only. They will have become corporate owned and make up a new tier of the industry, far bigger than anything we have yet seen.

That will be the broad picture, precisely because as someone already noted, online porn is just like every other industry. And in the long run, we will produce our Sam Waltons who will displace our Franklin Woolworths, because that is another thing several in this thread seem to have forgotten: even when giant companies are the norm, few survive at the top for very long and the doors remain open to newcomers.