Hear me out. Pornography has all the trappings of a headline-dominating modern business story—incredible usage rates, a monopoly that’s equally compelling and enraging, and a bevy of startups with a great deal of disruption potential. Sound like any other industries you know?
But despite this, the adult entertainment sector has been castigated by the business community. We’ve labeled it taboo, undeserving of insight, analysis, or even capital. In reality, it deserves all of that—who wouldn’t cover, fund, or learn more about an industry that’s existed for millions of years? If it were SaaS instead of sex, we’d be itching to get our hands on a cap table.
Of course, pornography’s relegation to the underbelly of the business world is in some ways deserved. For good reason, it has become synonymous with both 1) piracy and 2) exploitation. But how are we to put a stop to rampant creator mistreatment if we don’t understand adult entertainment at its core?
We can’t. That’s why we need to consider pornography for what it is—a massive industry that shapes modern business ideals, human interaction, and so much more. We ask our senators to understand how Facebook makes money when they’re tasked with reining in big tech. Now, we need to ask our leaders to give pornography the same consideration.
Let’s start getting an understanding now.
Size matters—sorry, had to. Porn’s an industry so vast, many consider it beyond measurement. When internet experts do try to calculate the size of its digital presence, they come up with numbers like this:
- Pornhub and Xvideos, the two most popular adult content sites, average about 3 trillion monthly visitors each, according to web hosting company Fasthosts.
- That’s heads above Amazon (2.3 trillion), Netflix (2.2 trillion), and Reddit (1.3 trillion).
That traffic requires people. It’s been estimated that in just the San Fernando Valley (the Silicon Valley of porn), adult entertainment employs 20,000 people. Scale, it seems, is not lacking.
Influence matters. While it’s difficult to measure the exact economic impact of pornography, most realistic estimates put it around $6–$15 billion in annual revenue here in the states...or on par with the NBA, Netflix, and the NFL most years.
And the adult entertainment industry is widely known for adopting and popularizing new technology that eventually makes its way to you and me and the masses—everything from instant messaging and video streaming to digital credit card transactions to virtual reality.
Adaptability—for better or for worse—has always been part of pornography’s DNA.
- For better: Consider a company like OnlyFans. As Holly will explain Thursday, it filled a gaping white space in adult entertainment by borrowing from existing business models outside of porn to return power to the creators.
- For worse: Consider a company like PornHub, which recently removed all uploads from unverified users, a significant share of its videos, after a New York Times report found it hosted footage of rapes, including of children.
These examples illustrate the duality of porn—for all its promise, it contains enormous risks that, in the best case, belong in an S-1 disclosure and, in the worst case, risk human life. We can’t allow that to permeate the evolving pornography business even more just because we fail to understand who needs protecting and when. Offering that protection is step one—step two is turning pornography into a modern business sector greased with capital to keep the wheels turning (safely).
It’s said that most of us think about sex. We know it sells. So how come we can’t admit that prudent investment in pornography and the many businesses that constitute it could pay off in spades?
We’ve created a different values system for industries we consider to be peddling vices. If we applied that logic to the serotonin boost of getting a like on Instagram—a vice, almost incontrovertibly—should we not treat OnlyFans and Facebook the same way? Both are rife with potential misuse, both log unbelievable traffic, and both make gobs of money.
And yet we consider “porn” to be a bad word in business and beyond. In fact, this email might land in your spam folder because I often used that word instead of “adult entertainment.” That gives me pause, and it should give you pause, too. This is why we’re making this week’s episodes. If we want to be well-informed people with a fuller understanding of the business world around us...we have to think about pornography more.