Adult Entertainment Has Lost Its Lustre
By Bob Yunger
Things are really beginning to bounce back in our post-recession recovery. Gas prices at the pump are relatively low, the local Walmart is hiring and for the last year or so the housing sector has been showing signs in many areas of returning to its previously ludicrous level of average market prices out-of-proportion to local earnings. So there’s reason to feel optimistic about your economic prospects, Mister Joe Average – unless you’re in the adult website business. Then your prospects for making a living are still in the midst of the Great Porn Depression. In the late 90’s when America and the world was finally logging on to the internet, even a small adult pay site was like a license to print money. New paysite members were regularly billed recurring monthly membership fees of $24.95 to $34.95 per-month on average, and that was just for photos and galleries. Streaming video hadn’t become the de rigueur industry standard yet. Even as recently as 2009 claims were being made that online adult entertainment was grossing 14-billion dollars worldwide annually. These high earnings were unsupported by solid accounting but they helped drive the land rush in internet development and investment which bolstered the economy before the first recent Wall Street crash at the end of 2000.
A 2001 article in Forbes online minimized claims of huge profits industry-wide, saying that if you added “the Internet” it would “add less than $1 billion to the total porn pie. The 1998 Forrester report pegs the online adult content market at $750 million to $1 billion, which was an increase from its initial estimate of $150 million. When a study admits that its initial result was off by at least 80%, it’s hard to be confident in the new result. In any event, Tom Rhinelander, a Forrester research director, says they have given up trying to put a price on porn–either on the Internet or otherwise.” Thing is though, it was profitable. Up until 2003 credit card processors were not charging a special fee for their services. You could monetize a small site, for free, just as easily as opening up a Paypal account. An April 25, 2014, Fastcomany article by Vivian Giang covering the New York-based erotica site Make Love Not Porn said that in 2002 MasterCard and Visa decided that adult content was a “high risk” merchant transaction. This meant “payment processing companies that deal with (porn sites) will be charged higher fees. Due to this, PayPal announced it would no longer work with adult content companies.”
Long story short, one day in 2002 if you were a female college student who had a personal site where you posted selfie nudes and you were selling tickets to your show, pulling in a small but comfortable sum each week for basically nothing, suddenly you had to pay a $750 annual fee or else lose your American-based card processor. To put it all in moral perspective this was immediately preceding the U.S. housing bubble driven by liar’s loans. European card processors had a loophole but few American porn webmasters knew about them and those Europe-based companies eventually began falling to the annual fee scheme which is today $1000 per year. Really it’s not about “high risk” because the opt-out button is so prominent anyone can cancel their membership to a site. What the annual U.S.-based Visa-MasterCard fee acts as is essentially just a tenderloin tax. Nothing is as safe a bet as porn when it comes to sales, because nothing sells as well as sex, and if it’s legal it should not be levied a high sin fee. Perhaps one day our society will be less hypocritical and not seek exorbitant bribes from honest business professionals who ply the erotica trades.