Knowing a New Business Model When You See It: Adult Entertainment Innovations And Adaptations in a Post-Napster Era

Kate Darling, What Drives IP without IP? A Study of the Online Adult Entertainment Industry, (February 1, 2013), available at SSRN.

Throughout media history, purveyors of illicit content have always had to think on their feet when faced with economic or legal dilemmas. Never the darling of regulators, law enforcement, or public representatives, adult entertainment companies have pretty much been left to their own devices for dealing with new challenges. It comes as no surprise, then, that in a post-Napster era of expansive networks, easy copying, and free content, porn producers must rethink how they approach their products and profitability.

In her excellent article, What Drives IP without IP? A Study of the Online Adult Entertainment Industry, MIT Research Specialist Kate Darling investigates the current state of the American sexual expression industry to sort out the various perspectives and approaches its players are taking to the shifting ground they currently tread. What she finds is both an affirmation of numerous common sense intuitions (e.g., that porn producers rely less on copyright enforcement and more on lower costs, higher video quality, content curation, and targeted marketing to maintain market share), as well as some surprising discoveries (e.g., that “experience goods” such as live interaction, gaming, and 3D are becoming a staple for building solid online brands).

More fundamentally, though, Darling’s article brings home a classic post-Napster lesson that all content industries have had to learn at some point: consumer expectations have changed. No matter what you think about copyright, “content theft,” BitTorrent, or digital rights management, the majority of consumers will no longer tolerate significant friction between them and what they want online. Darling presents several credible testimonials of this realization within the adult entertainment industry, each bringing a different emotion to the narrative as if they were part of the Kübler-Ross model: shock, disbelief, anger, tolerance, and, finally, acceptance. In terms of intellectual property in particular, Darling shows that this shift has, in fact, led to some reduction in productivity. Yet she makes a convincing case that it has also forced the industry to adapt in new ways, building new and better distribution platforms, and fulfilling new markets with niche products and services.

Darling’s article also fits nicely into a growing body of empirical research on industries and individuals and their relationship to intellectual property. Through her interviews, she provides yet another narrative where content producers (the group one might assume is most in favor of IP) are deeply uncomfortable with copyright. On the one hand, they do want people to pay for what they produce. On the other hand, they seem less concerned about both exclusivity and enforcement. As long as they can make some money, leaky copyrights aren’t a big problem. Part of this attitude may derive from some characteristics of adult entertainment producers—for example, the quantity (large) and quality (varied) of their products—but more likely, it is further evidence of how difficult and expensive the current copyright system is to use. Given the dramatic shifts in production timelines, distribution modes, and consumption rates, the practical costs to register one’s copyright and hire a lawyer to enforce it probably seems somewhat antiquated and obsolete, especially compared to spending the money on producing a new line of content.

Darling’s article also highlights the way in which adult entertainment producers have capitalized on the market on private viewing. Unlike office workers who may want to share funny YouTube videos or emails for comic relief, pornography consumers often want sanctuary and security for their viewings. Darling’s interviews show that the adult industry is using their understanding of this preference to construct products and services that explicitly cater to those conditions—something the movie, music, and newspaper industries continue to struggle to provide, even though their customers also often desire privacy to consume their products.

As the Copyright Office and members of Congress reimagine “The Next Great Copyright Act” in the coming months and years, one hopes that studies such as this one will help form the foundation for a set of policies that are evidence-based and appropriate for a networked society.