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The Porn Business Isn't Anything Like You Think It Is
The undying trope is that porn drives the adoption of new technology, makes ridiculous amounts of money, and dominates the Internet. But it's not true.
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How the World Will Know If Russia Is Preparing to Launch a Nuke
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Give Your Back a Break With Our Favorite Office Chairs
Ebola Is Back—and Vaccines Don’t Work Against It
How the World Will Know If Russia Is Preparing to Launch a Nuke
The Bruce Willis Deepfake Is Everyone’s Problem
Give Your Back a Break With Our Favorite Office Chairs
This Is What the Porn Industry Looks Like
Ebola Is Back—and Vaccines Don’t Work Against It
How the World Will Know If Russia Is Preparing to Launch a Nuke
The Bruce Willis Deepfake Is Everyone’s Problem
Give Your Back a Break With Our Favorite Office Chairs
Ebola Is Back—and Vaccines Don’t Work Against It
How the World Will Know If Russia Is Preparing to Launch a Nuke
The Bruce Willis Deepfake Is Everyone’s Problem
Give Your Back a Break With Our Favorite Office Chairs
'It's Chaos. It's Fragmented. It's Broken. It's Blocked'
Ebola Is Back—and Vaccines Don’t Work Against It
How the World Will Know If Russia Is Preparing to Launch a Nuke
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Give Your Back a Break With Our Favorite Office Chairs
Ebola Is Back—and Vaccines Don’t Work Against It
How the World Will Know If Russia Is Preparing to Launch a Nuke
The Bruce Willis Deepfake Is Everyone’s Problem
Give Your Back a Break With Our Favorite Office Chairs
Cade Metz is a former WIRED senior staff writer covering Google, Facebook, artificial intelligence, bitcoin, data centers, computer chips, programming languages, and other ways the world is changing.
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WIRED is where tomorrow is realized. It is the essential source of information and ideas that make sense of a world in constant transformation. The WIRED conversation illuminates how technology is changing every aspect of our lives—from culture to business, science to design. The breakthroughs and innovations that we uncover lead to new ways of thinking, new connections, and new industries.
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Midway through the second season of Silicon Valley , the HBO series that so skillfully spoofs the Bay Area tech scene, the plot turns to porn.
Inside the offices of Pied Piper, the fictional startup at the heart of the show, a shaggy-haired coder hacks into a rival company. The rival, he discovers, has landed a $15 million contract with a porn outfit called Intersite, also fictional, agreeing to build software that will compress Intersite's videos and send them across the 'net. Pied Piper's CEO, Richard Hendricks, is bemused. "I don't understand," he says. "How does Intersite have all this money?"
"It's pornography," says the guy with the highfalutin facial hair.
"Adult content has driven more important tech adoption than anything," says another colleague. "The first fiction ever published on a printing press was an erotic tale. And from there: super 8 film, Polaroid, home video, digital, video on demand—"
"—credit card verification systems, Snapchat—" adds a third.
"Pornography accounts for 37 percent of all Internet traffic."
"Thirty-eight when I'm on it," says the guy with the highfalutin facial hair.
In many ways, the exchange is typical of the show . It's good for multiple laughs, particularly if you're wise to the shamelessly eccentric ways of the modern tech world. Punchline aside, the big laugh is that nod to Snapchat, a mainstream private-messaging-and-video-chat app whose status as a porn service is, shall we say, unofficial. But Pied Piper's porn encounter is a rare case where Silicon Valley gets things wrong. Typically, the parody rings so very true. In this case, it doesn't.
'The thing about the adult industry today is that ... it's a very low-margin business.'
In the popular imagination, the eternal trope is that the porn industry drives the adoption of new technology; that it accounts for some astronomically large portion of all Internet traffic; and, yes, that it generates equally enormous sums of money for all the faceless people who run its operations. We picture these people as sleazy Southern Californians wearing pinkie rings and polyester. Or, if we've come to realize that the pinkie-ring caricature makes absolutely no sense in the age of the Internet, we see them as ruthlessly clever businesspeople with a sixth sense for where the big money lies. That's the stereotype Silicon Valley embraces. Later in the episode, when Hendricks turns up at an adult industry conference, we encounter an army of porn execs dressed like bankers.
Some of it may have been true in years past. But no longer. A colleague of mine calls this a meso-idea , an idea that has ceased to be true but that people continue to repeat, ad infinitum, as if it still was. With the rise of mobile devices and platforms from the likes of Apple and Google, not to mention the proliferation of free videos on YouTube-like porn sites, the adult industry is in a bind. Money is hard to come by, and as the industry struggles to find new revenue streams, it's facing extra competition from mainstream social media. Its very identity is being stolen as the world evolves both technologically and culturally.
It's a world where Playboy is going PG-13 —in print and online—because it can't compete with the Internet at large. Mobile and social media platforms have pulled us away from the openness of the worldwide web and into walled gardens, squeezing the avenues of distribution for porn, co-opting its audience (at least in part), and forcing outfits like Playboy to become more "mainstream." The larger porn industry is headed in the same direction, careening away from the stereotypes held by journalists and pundits and pop culture like Silicon Valley . "That's obviously a fictional adult company—because I don't know a single one that would pay $15 million for compression software," quips Chris O'Connell, who helps run a real adult company called Mikandi. "The thing about the adult industry today is that ... it's a very low-margin business."
Mikandi operates the world's largest porn app store. When I talked to the publisher of XBIZ , the leading adult business news organization, he called it "the future of the porn industry." And in some ways, it is. But that future isn't what the popular imagination expects.
O'Connell, Mikandi's 29-year-old chief architect, lives in Tucson, Arizona, and he runs the company with Jesse Adams and Jen McEwen, the young Seattle couple who launched the store back in 2009, providing an alternative to the Android and iPhone app stores that forbid adult content. Apple also bars Mikandi itself from iPhones, and the only way to use it on an Android phone is to download it manually through a web browser—the same browser that serves up a seemingly endless stream of free pornography.
That said, Mikandi aims to offer stuff you can't get elsewhere. A smartphone app does video and animation much better than a browser, and the store serves up carefully crafted stuff like hand-drawn hentai —aka Japanese porn animation . Over the last three years, the word "hentai" accounted for more Mikandi searches than the word "free." The premium apps carry a price tag, and the company takes a cut whenever anyone buys one.
But the audience is relatively small. About 2.5 million people are registered with the Mikandi store, with about 345,000 visiting every three months. All of which means: O'Connell, Adams, and McEwen pull in yearly salaries somewhere in the low six figures, after paying "competitive" wages to a handful of coders in Seattle and Eastern Europe. "None of us own a yacht," O'Connell says. Or as McEwen puts it: "You can't understand the obstacles that are in our way."
She doesn’t mean obstacles of morality or law. Yes, many people frown on porn, calling it exploitative and debasing. But many others just see it as a part of life—a big part of life. There's an enormous audience for porn, and whatever it signifies, whatever emotions it stirs in critics, this audience isn’t going away. McEwen means economic obstacles, business obstacles, technical obstacles.
It wasn't always this way. In the early aughts, online porn was ridiculously lucrative. Colin Rowntree, a porn producer, director, distributor, and member of the Adult Video News Hall of Fame , was a just mid-level player, and in those days, he and his wife, Angie, earned millions each year. But at the end of the decade, just about everything changed. Apple introduced the iPhone, which moved so much of our digital lives onto mobile devices while officially banning pornography in its App Store. Google pushed porn to the fringes of its search engine . And as The Economist and Buzzfeed have described, an army of "Tube sites"—essentially Youtube knockoffs with names like Youporn and Pornhub—began offering a smorgasbord of online porn for free, much of it pirated, making it far more difficult for pornographers and distributors to make money. All this happened as the worldwide economy tanked.
"It was the perfect storm," says Rowntree. "People no longer wanted to pull out their credit cards. But they said: 'Oh, there's this thing called YouPorn. It may be grained and shitty, but at least I can masturbate.'"
The adult industry sought new avenues, including porn app stores, porn search engines like Rowntree's Boodigo , and other workarounds, as well as "live cams," where people pay to watch and interact with an adult performer in real time. That's pretty much what strippers and porn stars have offered over Snapchat. But this too has its limits. One of the kings of live cams, Kink.com, the company the operates out of a castle-like former armory in San Francisco's Mission District , has also seen revenues decline in recent years . Snapchat now works to shut down accounts dedicated to pornography.
Certainly, some people will pay for a better experience than they can get on a Tube site. Todd Glider is the CEO of CMP Group, whose video service, Badoink, has found another loophole in the smartphone market—-it offers a video streaming tool that's ostensibly content-neutral but can be used for porn—and he says the company pulls in $55 million a year in revenues. But the best content is often pirated and offered for free, much like Hollywood blockbusters and best-selling albums. The difference is that Hollywood has the political and economic power to suppress pirated content—and push official content through mainstream services. The porn biz can issue DMCA takedown notices and threaten legal action like anyone else, but it doesn't have the clout to enforce the notices on a wide scale—or make anyone care that it's being ripped off.
"The adult industry isn't able to enforce its intellectual property protection," says Kate Darling, a researcher at the MIT Media Lab who explored the economics of the adult industry in the 2013 study What Drives IP without IP? A Study of the Online Adult Entertainment Industry . "It's not that much different from others industries—except that policy makers don't really look at the adult industry and aren't interested in helping the adult industry."
Meanwhile, with the rise of Netflix and YouTube and so many other mainstream video services—including Facebook and Twitter—porn is no longer the dominant form of online video. It's hard to tell how much porn streams across the 'net—no reliable operation tracks this, including Sandvine, the primary source for internet traffic research —but it doesn't account for 37 percent of all traffic. It's not even close. Mikandi declines to discuss its traffic. But a better barometer is the Pornhub Network, which now spans several of the major Tube sites. Pornhub says its network receives about 100 million visits a day, and at least on part of the network, the average visit lasts about nine minutes. If you extrapolate, that's somewhere in the range of 450 million hours of viewing a month. Meanwhile, Netflix serves 60 million subscribers, and these subscribers watch over 3.3 billion hours of programming a month ( 10 billion a quarter ). Youtube claims hundreds of millions of hours of viewing daily .
"What happens is: someone comes up with a stat [about porn traffic] and everyone repeats it, but it's not necessarily true," Pornhub vice president Corey Price says. "If you just look at YouTube's numbers, they're astounding."
The corollary is that, with the rising power of companies like Apple and Google and Facebook, the adult industry doesn't drive new technology. In many respects, it doesn't even have access to new technology. The big tech companies behind the big platforms control not only the gateway services (the iPhone app store, Google Search, the Facebook social network) but the gateway devices (the iPhone, Android phones, Google Chromecast, the Amazon Fire TV, the Oculus Rift virtual reality headset). And for the most part, they've shut porn out. Besides, these giants now drive new technology faster than services like Mikandi or Pornhub ever could.
Porn distributors have become the imitators, not the innovators. This summer, Pornhub introduced a for-pay service, an alternative to its ad-driven free porn sites. In a press release, the company called it "the Netflix of porn." When I talk to Price, he compares it to Spotify. And remember: the Tubes sites have spent the last decade mimicking Youtube. "We've innovated in some areas," Price says. "But the adult industry being the leader of technology? If it was ever true, it isn't true today."
Silicon Valley doesn't even get the clothes right. The reality is that people from porn companies wear whatever they want at conferences—a lot like people from other tech companies. "People who work in the adult industry are like people who work for other startups," says one industry veteran. "But they have an edge. They have a certain countercultural attitude." They're a lot like people from other tech companies in so many ways. They just deal in a different type of online content. And even the content isn't as different as you might think.
Back in 1998, in his preternaturally entertaining exposé of the porn business, " Big Red Son ," which detailed his visit to an industry mega-conference, David Foster Wallace observed a world populated by people who wore bad toupees and pinkie rings and used the word class "as a noun to mean refinement." "All the clichés," he said, "are true."
They wouldn't stay true for long. The Internet would soon remake the industry. It became less about producers and directors in Southern California, and more about people who put stuff on the 'net. Old-school producers and directors are still around, but they've been superseded by the people who deliver the porn, and these people have moved into production as well. Twenty years later, almost none of Wallace's cliches are true. In fact, not even the clichés that replaced those clichés are true. Nowadays, the porn industry looks nothing like those guys in bad toupees—and nothing like the steely-eyed execs who show up in Silicon Valley . It looks like Chris O'Connell.
The big adult business-to-business conference is called Internext, and it's held at the Hard Rock Hotel, just off the Las Vegas strip. On the first day of this year's show, O'Connell turned up in a blue mohair and wool suit, with a red tie and matching handkerchief. As he walked down the hall that Saturday night, past
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