Talk to the grizzled veterans of the Consumer Electronics Show each January in Las Vegas and they will tell you that Sony's Beta was a better format than VHS - yet it was the ability to deliver adult content right into the home that made VHS the dominant format, thus launching the home theater business. In a world filled with Blu-ray, downloads and portable media everywhere - the VHS versus Beta debate isn't really relevant anymore, but the question "Can the porn industry can still drive the bus for the consumer electronics industry?" is being asked more and more these days.
Adult content and VHS are a well-established link, but porn was also key in the over-90-percent market share success of DVD-Video as a format through the 1990s. Pay-per-view adult content also played a part in helping grow the reach of both digital cable and satellite content providers. Look at the top sites on the Internet a little past Facebook and Google and you will see that many of them have naked people on them doing some pretty naughty things. It could be argued that Porn entrepreneurs were the first to get people to really pay for content on the Internet, which led to today's download services like Apple's iTunes, Netflix and Blockbuster.
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For more information on related topics, read our other articles, Adult Content Shaping the Future of Blu-ray and HD Downloads and Porn Interrupts Super Bowl Broadcast in Tucson. For even more information, read an article from SFGate.com on the state of the Adult Business by Joe Garofoli from March 2009.
For a good 25 years, the adult industry helped quietly power new technology in the consumer electronics industry. It was a good partnership and no irony that the Consumer Electronics Association and the AVN adult industry shows are in Las Vegas at the same time, despite tremendous costs and congestion in town at that time. Cracks started to show on "Blu-Friday" at CES in 2008 when Warner Brothers picked Blu-ray as their chosen HD videodisc format over the Toshiba and Microsoft (and adult industry) backed HD DVD. It was the first time since the VHS war that the adult industry bet wrong, but they quickly switched sides, as did the rest of the non-adult studios, and moved forward - but they weren't out of trouble yet.
The adult industry profit margins can be astronomically high including margins on DVD-Video and Blu-ray discs, which today sell at retail for $40 and $50 respectively. Comparatively, big budget Hollywood movies sell for around $20 at retail, while Blu-ray packing 1080p HD video and 7.1 uncompressed surround sound audio sells for around $30. The value started to evaporate for adult content on a shiny silver disc from this point forward. At Blu-Friday in 2008, the Internet was without question loaded with photos of adult content, but streaming video was limited mostly to 15 seconds and broadcast in credit-card-sized images that were hardly an immersive experience. Computers weren't linked to flat HDTVs plus people's Internet connections were not nearly as fast in the same way that they are today, thanks to the advent of fiber optics and other bandwidth improvements. Roll the tape forward to today and see the rise in popularity of "Tube Sites" inspired by the name of Google's YouTube but loaded with smut - these sites like TubeGalore.com, HardSexTube.com, and RawTube.com have changed the game for the porn industry in ways that can only be compared to the way that Napster rocked the music world. Gone are the credit card-sized videos. In are many times larger video vignettes with far better operation, streaming, buffering and access. Forget a few 15 second downloads on one webpage - now web surfers looking for adult content can get 40 minute plus videos for free from hundreds of non-pay sites. That's more content than a $40 DVD for free in a video that is one of thousands per site and there is more than one site. That's an infinite amount of porn that, unlike in 2008, can be much more easily streamed to one of today's HDTVs. In a way, porn might be the best reason to buy a Google TV but it's not making the adult business the same money as they are used to.
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