Will Mobile Porn Pay Off?

After years of being stifled by carriers, purveyors of adult content are ramping up to bring their stuff to U.S. mobile users. Whether there’s much money in wireless porn, though, is still unclear.

While hard figures are extremely difficult to pin down, there’s plenty of anecdotal evidence that a substantial appetite exists for the steamy stuff on mobile phones. KDDI and NTT DoCoMo earlier this year blamed porn downloads for straining their networks, forcing them to impose limits on their most, um, active users. Entrepreneur Russell Beattie raised eyebrows last year as he shuttered Mowser, a mobile transcoding business that saw porn generate 80 percent of its traffic. And former Vodafone exec Graeme Ferguson in 2006 famously claimed that 70 percent of the carrier’s downloads consisted of adult content.

That seemingly insatiable hunger has fueled analysts’ estimates that fall somewhere between optimistic and ridiculous. The market for mobile video porn alone was expected to reach $2.7 billion by this year, according to a 2006 forecast from Juniper Research. The market research firm ratcheted down its projections earlier this year in a revised forecast, but still predicted the worldwide market for mobile adult content could reach $4.9 billion by 2013.

Carriers — who long ruled the mobile-content world by playing the role of gatekeeper on their all-important decks — have effectively stifled the market in the U.S., fearing backlash from irate subscribers. That’s changing, though, as third-party apps gain traction and traffic on the mobile web ramps up. And operators themselves are finally doing a better job of implementing solutions to protect under-age users from smut, minimizing what had been a key sticking point for content vendors.

Mainstream app stores have also assumed the role of gatekeeper, but some porn-focused alternative stores are predictably starting to surface. MiKandi, a Seattle startup, recently began delivering porn apps to Android users, and the new Sex App Shop delivers app-like content to iPhone users via the handset’s Safari browser. Meanwhile, web-based porn distributors have effectively adapted to new high-end handsets, according to MediaPost’s Steve Smith, presenting content that is ideally suited for mobile and customized for individual handsets.

But while all the pieces finally appear to be in place for the U.S. market to take off, the question of how much users will pay for the stuff remains. The Internet may have helped drive porn out of the alley and into the mainstream, but — like so many other industries — it altered the economic landscape, pushing adult content sales into a slump. There are likely far more porn consumers now than ever before, thanks to the web, but they long ago grew accustomed to getting their content for free.

U.S. carriers have largely passed up their chance to cash in directly on adult content and must be satisfied with general data-usage revenues and revenue-share agreements with third-party app distributors. But as mobile porn generates traffic — if not much revenue — among U.S. consumers, operators will increasingly face the network problems their Japanese counterparts have experienced. So they must continue to embrace Wi-Fi and other technologies to provide other ways for users to access porn and other multimedia content.

Meanwhile, content providers will need to innovate and differentiate to survive. Asking users to pay a few bucks for some stills or a video clip on a handset isn’t a viable business model when web-enabled phones can access even the kinkiest porn for free. (And it’s worth noting that mobile obviously doesn’t provide the best, ahem, user experience when it comes to porn.) Porn publishers will need to creatively use text and other interactive media to create offerings that add value and leverage the unique features of mobile, rather than trying to duplicate a traditional web-surfing experience. They must continue to offer content that’s tailored specifically for the phone — a hurdle most mainstream media companies have failed to surmount — and they should embrace a variety of business models, from ad-supported free content to premium offerings that include chat and even live video.

Because there’s no question that a vast number of mobile users will consume porn on their phones. The challenge is making them pay for it.

Question of the week

Will consumers pay for mobile adult content?
Relevant Analyst
Colin Gibbs

Colin Gibbs

Mobile Curator Gigaom Network

Do you want to speak with Colin Gibbs about this topic?

Learn More
You must be logged in to post a comment.

5 Comments Subscribers to comment

  1. ^^^After being in the mobile porn industry for two years, I can confirm that consumers will pay for adult content.^^^ People in the adult industry know that there are two types of porn consumers: (a) Those who will always want the free stuff (the “tubers”) and are very difficult to convert to paying customers (b) those who pay for porn and will always pay for the newest content and hottest scenes.

    Mobile is interesting, as it is a very impulse purchase, convenient, and all content remains privately in your control. So, more users will pay for this, but retention rates are lower that of the normal porn sites.

    Share
    1. @mike15 – interesting perspective. Question for you – being in this industry, are you and our peers embracing mobile apps as an additional channel to which to monetize your content, and if so, is it strictly limited to non-iPhone based apps. I would imagine due to the strict policing of the app market by Apple would make that market – at least through a dedicated app- out of reach for porn industry content providers.

      Share

Latest Research

Latest Webinars

Want to conduct your own Webinar?
Learn More

Learn about our services or Contact us: Email / 800-906-8098