Quote:
Originally Posted by RawAlex
First off, as Tony said, Megarotic and Rapidshare are both terrible examples, because they are copyright challenged. They have NO production costs, nor do they feel compelled to use the content to promote the site, program, or DVD that it comes from. They are the types of services that are sending us all to hell.
To decrease margin for increased volume is a business model discussion. Giving away dollar bills for free and hoping people will tip you back more isn't a business model. It's insanity. Pre-TGP conversions were 1 in X and life was great. TGPs made more traffic, but conversions dropped to 1 in X times 3, MGPs moved it to 1 in X times 10. When the conversions gets too far out of hand, the cost of acquiring the customers starts to exceed the net income.
I could go on, but safe to say when the business is compressed down to a 5% margin business, very very few companies will be left making porn. That day is coming much closer all the time.
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They're good examples, because they show that the bandwidth part can be covered. And the bandwidth part is the killer, because it goes up with volume. On the other hand, with enough volume, the content part becomes a lot less costly, since it does not increase with volume.
The volume/margins issue would be a big problem if sites like these were to sell the same stuff they're giving away for free. So, obviously, they should not do that. Instead, they should advertise other products. Even with TGPs, we've seen this - galleries promoting AFF or Fleshlight, for example.
I agree with you that the amount of porn being produced and the number of companies involved in it will decrease, though. Moreover, the quality will drop. American and Western European producers will, most likely, face rough times.
The only companies I see doing well in such a future are the ones that either produce very cheaply - most likely Eastern European, Russian, South American and South-East Asian ones - as well as those that produce very unique products, such as very specific fetishes or very high quality.