Recession causes, er, hard times in the porn business

Interesting piece in the Economist.

The adult-film industry is concentrated in the San Fernando Valley—“the Valley” to Angelenos—on the northern edge of Los Angeles, so the slump in porn is yet another factor depressing the local economy. Pornography had been immune to previous recessions, so the current downturn has come as a shock.

Most of the industry consists of small private production companies whose numbers are secret, but Mark Kernes, an editor at Adult Video News, a trade magazine, estimates that the American industry had some $6 billion in revenues in 2007, before the recession, mostly in DVD sales and rentals and some in internet subscriptions. Diane Duke, the director of the Free Speech Coalition, the adult industry’s trade group, thinks that revenues have fallen 30-50% during the past year. “One producer told me his revenue was down 80%,” she says.

If the Valley used to make 5,000-6,000 films a year, says Mr Kernes, it now makes perhaps 3,000-4,000. Some firms have shut down, others are consolidating or scraping by. For the 1,200 active performers in the Valley this means less action and more hardship. A young woman without …name-recognition might have charged $1,000 for a straight scene before the crisis, but gets $800 or less now. Men are worse hit. If they averaged $500 for a straight scene in 2007, they are now lucky to get $300. For every performer there are several people in support, from sound-tech to catering and (yes) wardrobe, says Ms Duke, so the overall effect on the Valley economy is large.

The Economist — and the industry — think that piracy is to blame. I wonder: surely the rise of user-generated porn has something to do with it too. At any rate, those stories of ‘amateur’ porn being sold freely in pubs might not all be urban myths. And some of those camcorders being sold by the truckload must be used for, er, creative purposes.

En passant And don’t you just love the irony of the porn industry trade association calling itself “the Free Speech Coalition”? Almost as funny as the Irish alcoholic drinks industry calling itself the “Hospitality Association”.

Happy Birthday, Blogger!

This morning’s Observer column.

“When a true genius appears in the world,” wrote Jonathan Swift, “you may know him by this sign, that the dunces are all in confederacy against him.” So it was with blogging. It was ridiculed as self-indulgent, lazy vanity publishing; lampooned as the product of obsessives tapping feverishly in their pyjamas; blasted as a parasitic activity, feeding on the blood of hard-working professional journalists; and derided as a doomed fad because there was no ‘business model’ to support it. After all, virtually no one makes money from his or her blog, so the thing clearly didn’t have a future.

And guess what? Blogging is thriving. In virtually every area of human interest, the diversity and quantity of fact and opinion available online dwarfs what was available in the print era. In the old days the News of the World had a ludicrous slogan: “All Human Life Is Here”, a promise on which no publication could ever hope to deliver. The ‘blogosphere’ is the first medium we’ve ever had which could conceivably live up to the slogan…

Erratum: A computer scientist has emailed, objecting to my reference to Tim Berners-Lee as “a physicist working at CERN” when he was, in fact, “a computer scientist employed by CERN in that capacity, who just happened to have a first degree in physics”. He’s right of course. Mea culpa. My only defence is that, as an engineer, I regard physicists much as some people regard Catholics (as in the saying “once a Catholic, always a Catholic…”).

Micropayments: the fantasy lives on

From the Nieman Journalism Lab.

Google is developing a micropayment platform that will be “available to both Google and non-Google properties within the next year,” according to a document the company submitted to the Newspaper Association of America. The system, an extension of Google Checkout, would be a new and unexpected option for the news industry as it considers how to charge for content online.

The revelation comes in an eight-page response to the NAA’s request for paid-content proposals, which it extended to several major technology companies and startups. It’s surprising, given the newspaper industry’s tenuous relationship with Google, that the company was involved at all…

The Google submission (pdf) is available here. It says, in part:

Google believes that an open web benefits all users and publishers. However, “open” need not mean free. We believe that content on the Internet can thrive supported by multiple business models — including content available only via subscription. While we believe that advertising will likely remain the main source of revenue for most news content, a paid model can serve as an important source of additional revenue. In addition, a successful paid content model can enhance advertising opportunities, rather than replace them.

When it comes to a paid content model, there are two main challenges. First, the content mus offer value to users. Only content creators can address this. The second is to create a simple payment model that is painless for users. Google has experience not only with our e-commerce products; we have successfully built consumer products used by millions around the world. We can use this expertise to help create a successful e-commerce platform for publishers.

Beyond the mechanics of any payment system, users must know the product exists. Discovery and distribution are just as, if not more, important to premium content as they are to free conten given the smaller audience of potential subscribers. Google is uniquely positioned to help publishers create a scalable e-commerce system via our Checkout product and also enable users to find this content via search — even if it’s behind a paywall. Our vision of a premium content ecosystem includes the following features:

  • Single sign-on capability for users to access content and manage subscriptions
  • Ability for publishers to combine subscriptions from different titles together for one price
  • Ability for publishers to create multiple payment options and easily include/exclude
    content behind a paywall
  • Multiple tiers of access to search including 1) snippets only with “subscription” label, 2)
    access to preview pages and 3) “first click free” access
  • Advertising systems that offer highly relevant ads for users, such as interest-based
    advertising.
  • If anyone can make such a system work, it’s Google. But I doubt that it will work, for the reasons Clay Shirky set out some time ago.

    The invocation of micropayments involves a displaced fantasy that the publishers of digital content can re-assert control over we unruly users in a media environment with low barriers to entry for competition. News that this has been tried many times in the past and has not worked is unwelcome precisely because if small payment systems won’t save existing publishers in their current form, there might not be a way to save existing publishers in their current form (an outcome generally regarded as unthinkable by existing publishers.)

    The micropayment idea is really a wistful fantasy of a print-based culture which thinks that it can have the benefits of being online without having to change its basic way of thinking and operating.

    If you want to know the future of media, see what works now

    Thoughtful Open Democracy piece by Charlie Beckett.

    So we all have an interest in answering the question posed most acutely in the States: can the news media of a digital age enhance democracy?

    The answer is that all around us we see that networking works. Networked Journalism works. This is the synthesis I set out in SuperMedia. It combines the technical capacity of mainstream media with much greater public participation in a thoroughly more open structural relationship between citizen and/as journalist. It is about the shift in journalism from a manufacturing to a service industry. It is a change in practice, from providing a product to acting as facilitators and connectors. It means an end to duplication and a focus on what value every bit of journalism production adds.

    The SuperMedia version of Networked Journalism is a description of what is happening but also an aspiration that recognises that society (and especially media organisations) must invest resource and accept a shift in power. This model does not work well enough yet to replace the old business model of mainstream mass commercial media. That is a big worry at a time of immense economic stress. But perhaps the real task is not to ‘save’ old journalistic institutions. They worked best as a means of producing surplus value for shareholders rather than in providing social, economic and political benefits for people in the 21st century.

    This is not to reject market forces. Quite the opposite. Online networking exposes journalists precisely and directly with what the public want and need. That is a good thing. Of course, there are market distortions such as the tendency for online communications to produce dominant brands in search, aggregation and distribution of information such as Google and the BBC. But even these mammoths are far more attuned to their consumers’ specific interests then the giants of mainstream media ever were.

    That seems about right to me — 20th century mass media were mainly machines for churning out standardised products and enhancing shareholder value along the way. Sometimes, of course, they played an important role in the democratic process, but that was not their core business, any more than non-stick frying pans were the core business of the Apollo program. If journalism is to thrive in the new ecosystem then, as Beckett says, it has to make the shift “from a manufacturing to a service industry” and its practitioners will have to change from “providing a product to acting as facilitators and connectors”. My guess is that most journalists conditioned in the old ecosystem will find this an uncomfortable or downright impossible switch.

    Beckett’s piece also reminds me of something that Steven Johnson said in his celebrated lecture, when he compared the quality of contemporary (highly networked) coverage of technology with the impoverished and meagre coverage provided within the old print-based system. In that sense, to adapt William Gibson’s trope, the future of new journalism is already here; it’s just not evenly distributed. And you have to know where to look for it.

    Serendipity

    Way back in 2006, William McKeen, chairman of the Department of Journalism at Florida State University, penned a nostalgic paen to serendipity — a phenomenon that he seemed to think was threatened by digital technology. Sample:

    Serendipity is defined as the ability to make fortunate discoveries accidentally. There’s so much of modern life that makes it preferable to the vaunted good old days – better hygiene products and power steering leap to mind – but in these disposable days of now and the future, the concept of serendipity is endangered.

    Think about the library. Do people browse anymore? We have become such a directed people. We can target what we want, thanks to the Internet. Put a couple of key words into a search engine and you find – with an irritating hit or miss here and there – exactly what you’re looking for. It’s efficient, but dull. You miss the time-consuming but enriching act of looking through shelves, of pulling down a book because the title interests you, or the binding. Inside, the book might be a loser, a waste of the effort and calories it took to remove it from its place and then return. Or it might be a dark chest of wonders, a life-changing first step into another world, something to lead your life down a path you didn’t know was there. Same thing goes with bookstores.

    Steven Johnson isn’t having any of it. Here’s an excerpt from his spirited riposte.

    I find these arguments completely infuriating. Do these people actually use the web? I find vastly more weird, unplanned stuff online than I ever did browsing the stacks as a grad student. Browsing the stacks is one of the most overrated and abused examples in the canon of things-we-used-to-do-that-were-so-much-better. (I love the whole idea of pulling down a book because you like the “binding.”) Thanks to the connective nature of hypertext, and the blogosphere’s exploratory hunger for finding new stuff, the web is the greatest serendipity engine in the history of culture. It is far, far easier to sit down in front of your browser and stumble across something completely brilliant but surprising than it is walking through a library looking at the spines of books. With music blogs and iTunes, I’ve discovered more interesting new bands and albums in the past year than I did in all of my college years. I know radio has gotten a lot worse, but really — does anyone actually believe that radio was ever more diverse and surprising in its recommendations than surfing through the iTunes catalog or the music sites? It’s no accident that BoingBoing is the most popular blog online — it’s popular because it’s an incredible randomizer, sending you off on all these crazy and unpredictable paths.

    I mean, look at what’s on the front door of Kottke this morning: soccer jersey fonts, debate over travel time to JFK, best American fiction poll, funny t-shirt joke, new Google software, Richard Feynman video, Tufte design riff, etc. What’s the organizing principle? There is none — other than Jason’s quirky taste — and that’s precisely why so many of us visit his site every day. It takes me thirty seconds to make all those connections by reading Jason’s blog. I defy McKeen to walk into a library and find so many weird and diverse and interesting things in an hour of staring at bindings.

    I’m with Johnson all the way on this one. And thanks to Lorcan Dempsey for the link to the discussion.

    LATER: I should have known that Bill Thompson would have had something to say about this. And indeed he did — in May 2006 he wrote an excellent column about McKeen’s argument.

    Why elephants can’t dance (or do social networking)

    This morning’s Observer column.

    Patience really is a virtue in this context, but it’s the one thing large corporations don’t seem to have. In part, this is a structural problem: public companies are driven by stockmarket expectations – which effectively means short-term exigencies. But corporate impatience to extract revenue juice from the online world in the short term is also a psychological problem. It’s the product of a mindset that has failed to take on board the scale of the changes now under way.

    What’s happening is that one of Joseph Schumpeter’s waves of “creative destruction” is sweeping through our economies, laying waste to lots of established businesses and industries, and enabling the rise of hitherto unprecedented ones. And it’s doing so on a timescale of maybe 25 years, which means that the broad outlines of the new economic system won’t be clearly visible for at least a decade. But everywhere one looks, we find corporate moguls wanting answers Right Now. The most spectacular example is Rupert Murdoch, who is on his third demand for an immediate answer to the online question, but virtually every large organisation in the world is driven by the same panicky impatience…

    ‘Free’ news: the bottom line

    Succinct wisdom from Peter Feld about the proposition that putting out news free on the web cannibalises one’s print edition:

    The flaw in the print person’s perspective is in thinking that there is any relation between your print audience and your web audience. There is none. You are not undercutting your print product by publishing a website because the people who you can reach online have almost no overlap with the people who you reach in print. Your print readers don’t want your website, and your web audience doesn’t. want. your. paper. (or magazine). (There’s a small overlap for whom that’s not true — many of whom are the mediavores who read articles like this one.) Audiences are more stratified by media habits than they are united by common interests.

    So, you will not send people back to your paper by eliminating your website (though you’ll save the cost of operating a website — maybe that’s the real consideration) — you’ll send them to other websites. And if you do maintain a website with a prohibitively high paywall, to try to send people to print, you have the worst of both worlds: a website that costs money to maintain, and no audience or revenue.

    The real error of print people is thinking that cost is a factor driving people from print to the web — as though people go to the web to save the price of a newspaper or magazine. Wrong. They go to your website because the web is where they hang out, and because they are hoping to find something that would be fresher than they could in a paper printed last night and filled with yesterday’s news.

    Submariners of mainstream media

    Quentin pointed me at this terrific essay about the PR industry by Paul Graham. Sample:

    PR is not dishonest. Not quite. In fact, the reason the best PR firms are so effective is precisely that they aren’t dishonest. They give reporters genuinely valuable information. A good PR firm won’t bug reporters just because the client tells them to; they’ve worked hard to build their credibility with reporters, and they don’t want to destroy it by feeding them mere propaganda.

    If anyone is dishonest, it’s the reporters. The main reason PR firms exist is that reporters are lazy. Or, to put it more nicely, overworked. Really they ought to be out there digging up stories for themselves. But it's so tempting to sit in their offices and let PR firms bring the stories to them. After all, they know good PR firms won’t lie to them.

    A good flatterer doesn’t lie, but tells his victim selective truths (what a nice color your eyes are). Good PR firms use the same strategy: they give reporters stories that are true, but whose truth favors their clients.

    For example, our PR firm often pitched stories about how the Web let small merchants compete with big ones. This was perfectly true. But the reason reporters ended up writing stories about this particular truth, rather than some other one, was that small merchants were our target market, and we were paying the piper.

    It’s a terrific article, full of uncomfortable insights (and often bringing up echoes of what Nick Davies found when researching his book, Flat Earth News). The peg for the piece was a spate of stories on the theme “The suits are back”. The general tenor of the meme was that it was no longer tech-chic to wear jeans and tee-shirts. (which of course is baloney.) Paul Graham did some detective work based on spotting common phrases in the various ‘suit’ stories and found that they all led back to the original client — an outfitter chain called The Men’s Wearhouse.

    Ignorance on stilts

    A long piece in The New York Review of Books about the emerging news ecology begins with this idiotic assertion:

    The two bloggers most commonly recognized as the medium’s pioneers, Mickey Kaus and Andrew Sullivan, are, remarkably, still at it. Kaus, who started the blog kausfiles in 1999, is now at Slate, and Sullivan, who began The Daily Dish in 2000, now posts at The Atlantic. Both still use the style they helped popularize—short, sharp, conversational bursts of commentary and opinion built around links to articles, columns, documents, and other blogs.

    Doesn’t exactly improve one’s confidence in the quality of the subsequent analysis, does it? Kaus and Sullivan are indeed entertaining and prominent bloggers, but they are not recognised as ‘pioneers’ by anybody outside of clueless mainstream media. The truth is that it was only when Sullivan — a prominent old-media commentator — morphed into a blogger that the world noticed the existence of the new medium.

    Growl.

    Thanks to Magnus Ramage for the link.

    No More Perks

    The Wall Street Journal recently published an interesting piece on the coffee+WiFi culture.

    Amid the economic downturn, there are fewer places in New York to plug in computers. As idle workers fill coffee-shop tables — nursing a single cup, if that, and surfing the Web for hours — and as shop owners struggle to stay in business, a decade-old love affair between coffee shops and laptop-wielding customers is fading. In some places, customers just get cold looks, but in a growing number of small coffee shops, firm restrictions on laptop use have been imposed and electric outlets have been locked. The laptop backlash may predate the recession, but the recession clearly has accelerated it.

    Given that free WiFi has been more of a US than a British tradition, the change bites harder over there. (In fact in the UK the only restaurant chain that consistently offers free WiFi is — amazingly — McDonalds, which is why I can sometimes be found under the golden arches with one of their — surprisingly good — black coffees while I connect to down- or up-load something urgent.)

    The WSJ piece sparked a thoughful post by Joey Devilla entitled “The Tragedy of the Coffee Shop” in which he puts the coffee-shop phenomenon in a wider context. He points out that the coffee-house has played a venerable role in the evolution of democracy in many European countries.

    Then, as now, they functioned as what sociologists like to call “Third Places”: places that are neither home (the “First Place”) nor work (the “Second Place”), but a place that functions a community gathering place where broader, and often more creative social interactions happen. Cafes, community centres, churches, pubs in the U.K., town squares, open-air basketball courts, the parking lots of 7-11s and hackerspaces like Toronto’s HacklabTO are all third places.

    In the last decade, the WiFi-enabled coffee shop has played a small but honourable role in the evolution of computer code. The guys who wrote Delicious Library in 2006, for example, did most if not all of their software development in a Seattle cafe — but did so with the permisson of the owner.