Learning from porn.

In certain applied sciences, and engineering disciplines, it’s a kind of basic truth that the money and push for research comes from military applications. Indeed, in many areas you can look at what the military is developing now and with a little creative foresight you can have a sense of what street level technology will be like in a decade or so.

In the “Internet world” there’s a similar truism about pornography: that sex drives many of the developments that eventually end up being part of our ubiquitous Internet experience.

That’s what the recent NYT article about the changes in the economics of the pornography business interest me.

The spread of high-speed Internet access promised even further growth. Instead, faster connections have simply allowed people to download free movies more quickly, and allowed amateur moviemakers to upload their creations easily.

Perhaps counterintuitively, the market continues to be flooded with new video releases, both online and on disc. Mr. Fishbein said that this year he expected to see more than 1,000 X-rated DVDs a month produced for retail sale, a figure driven in part by the new spate of low-budget filmmakers.

“The barrier to get into the industry is so low: you need a video camera and a couple of people who will have sex,” Mr. Fishbein said.

There’s a curve that is described in the article that is interesting when you consider how it might apply to other industries. First, broad online availability and a continually lowering barrier to entry shifts money away from the Old Guard “professionals” to online even with a lower quality product. Then the barrier keeps dropping, and the profits for both Old Guard and these New Turks shrink as the broader, and arguably lower quality, material keeps becoming available for less and less money. The race to the bottom finishes at the point where there is essentially no barrier to entry and there’s a very long tail of material available. And the Old Guard then adopts a plan to stop competing on cost and has a sudden resurgence of focus on quality.

Now, some aspects of this are unique to pornography–the speed of online adoption was obviously boosted by the anonymous nature of the Internet, and there is an essentially interchangeable aspect to the material that doesn’t apply to a lot of other areas, but still… it’s interesting to think about say the music industry in the context of this curve.

Or the publishing industry….

Or newspapers

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