One of the little known issues around the high tech industry is the role of pornography. Think about it – everyone raves about companies like Google making a fortune off the Internet – in January, it reported total revenue increasing 17% from a year earlier to $6.67 billion, not a bad achievement in a global financial crisis – but people seem to forget that it was the porn industry that first worked out how to make money on the Internet.
While every other startup was struggling to monetize its web presence in those early years of the Net, the porn industry was making mega bucks flooding the Internet with easy-to-access adult content using features such as embedded video, live-streaming, credit card payment, encryption, chat rooms, and membership plans.
Check out this piece from Doug Gross at CNN which shows us how the porn industry is leading the way in the tech sector. It's hardly surprising, as Gross says, that just days after Apple released the iPad, one of the world's biggest porn companies claimed it had created a way to stream its videos onto the device, skipping the Apple store and its restrictions on salacious content.
"On the Internet, streaming video, credit-card verification sites, Web referral rings and video technology like Flash all can be traced back to innovations designed to share, and sell, adult content,'' Gross writes. "Experts attribute much of the success of AOL, the social networking forbearer of sites like Facebook and Twitter, to its private chat rooms — and anyone who remembers scanning the user-created chats remembers the adults-only nature of many of them. Websites that require memberships, encryption coding, speedier file-sharing technology, all can trace their roots back to the adult industry. These days, in addition to the race for the iPad screen, at least a couple of porn flicks are in production using burgeoning 3-D technology. While Hollywood has scored with a few blockbusters, 3-D tech for the television is still in its infancy — and porn, as always, is right there to capitalize."
Now even if you don't like porn, you have to admit it's an interesting business model. The margins are just huge, thanks to the Internet and technology, and the industry, according to one estimate is worth $60 billion a year, which is many times more than what Google makes. The impact of law enforcement might just be a cost of doing business.
One thing for sure – you can bet that as technology moves ahead, the porn peddlers will be right there raking it in.
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