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Crime can be lessened by taking profits out of the hands of criminals. There are people at all levels of sex trade workers who contribute in other societies legally so the incidence of rape, pimping, and kidnapping for sex slaves is reduced dramatically. This article explores the benefits of legalizing prostitution in Canada.

In 1969 at the age of eighteen I was a young soldier stationed at a NATO base in what was then West Germany during the Cold War. When I arrived I immediately got the feeling that I had been transported to the future; everything was ultra-modern compared to the conservative old fashioned city of Toronto Ontario from which I came. Things were low-cost, efficient, and convenient. I was soon informed that this was also the case with quick visits to the local fun house where women would entertain a man for about thirty deutschmarks, about six dollars at that time. This was a perfect opportunity to learn about sex, which I had never had before. I found out that the activity was completely legal in Germany, and de-criminalized in Holland and Denmark. There weren’t many North American-style clubs where men would watch nude dancers and waste hours getting drunk: efficiency is paramount in Europe and everybody is in a hurry. The most impressive thing to me was that the ladies of the night were licensed, inspected for health violations, and were required to report their income and pay taxes in this occupation.

The Canadian government is not known for radical acceptance of change but they should follow the example of more enlightened countries when dealing with popular vices that are not going to disappear anytime soon no matter how stringently laws are enforced against them. The first lesson came during prohibition when the U.S. and Canada found that people were going to drink alcohol or die trying. The consumption of liquor was banned for Canadians at one point, but Canadian alcohol products were legal for export, a moral hypocrisy that fed more money to criminal organizations in America. Inevitably alcohol prohibition was repealed and liquor could be sold in lounges and restaurants as a respectable part of socializing.

The same situation exists in the oldest trade in the world, prostitution. Without regulation, it is another cash-rich industry left to be run by whoever happens to take control. The streets are rife with danger for sex-trade workers and they need security; very often they are exploited and there is a movement afoot to legitimize activities like erotic massage, escort services and prostitution as a human right in order to give more power to the women (or men) involved. The bawdy house laws offer no protection on issues of health and safety and so three former and current sex-trade workers have brought forward an action to have those laws declared unconstitutional. Sections of the Criminal Code that deal with living off the avails of prostitution, keeping a bawdy house, and communicating for the purpose of prostitution have been challenged by the women’s lawyer Alan Young.

To counter this 2009 action, three anti-prostitution groups are seeking to intervene: the Christian Legal Fellowship, Real Women of Canada, and the Catholic Civil Rights League. These religious groups are not content living a sin-free life as laid out in the Bible but must impose their moral position on everyone with a close-minded ignorance of the inner workings of biker gangs looking for sources of revenue and victimizing those who can’t go to the police for fear of retaliation. Pimping is something that exploits women who have found themselves with only one way to exist and others that need short-term relief coming from situations of extreme poverty and trying to get established in society the only way they know how.

If there were some organized efforts to help human beings get themselves together, the problem of government debt could be solved by legalizing prostitution and collecting taxes. Not only would it be a large source of government income but it would also eliminate the costs of law enforcement, court prosecution, and imprisonment costs. The government currently lives off a cash cow in the form of cigarettes – the most addictive and available deadly drug that is for some reason still allowed to be sold although tobacco causes thousands of deaths. Alcohol is misery for those who can’t control their drinking. It’s time for victimless torts like erotic massage and escort services to become accepted into the mainstream of economic life.

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But the rapid increase in consumer broadband penetration has been a double-edged sword for the sector; while new providers have emerged which leverage Web 2.0 to provide popular online services, many established players for whom physical media sales have traditionally accounted for a significant proportion of revenues are struggling to compete against the plethora of free sites.

With DVD and magazine sales falling fast as consumer consumption patterns change, companies must react quickly to retain a pivotal market position. The additional opportunities afforded by mobile, interactive TV and gaming platforms provide new opportunities, but adds to the evident fragmentation of both content services and business models.

Key features of this report

• Overview of the industry trends, technological evolution and changing business models that have driven development of the online adult entertainment market.

• Revenue forecasts to 2012 for adult entertainment revenues: includes breakdowns for online, mobile and broadcast services, plus DVD and magazine sales.

• Market projections for related communications and entertainment products and services including consumer broadband, mobile telephony and smart phone shipments.

Scope of this report

• Gain a comprehensive understanding of how market trends are boosting the potential of online adult entertainment services, and the impact such developments will have on traditional business models and strategies.

• Understand how the competitive environment is changing, and specifically how the emergence of adult tube sites has disrupted the traditional status quo.

• Quantify the adult entertainment market opportunity, gaining an insight into the revenue potential of online, mobile and broadcast adult services, while gauging how demand for physical media will fall.

Key Market Issues

• Although adult content remains prohibited or strictly controlled in many country markets, in general there has been a relaxation of legal restrictions over recent years. However, some markets – notably China – are strengthening their anti-pornography stances, providing a major challenge for many across the industry.

• Just like the music industry before it, the adult entertainment sector is seeing rapid declines in its core business (i.e. DVD and magazine sales), with digital distribution essentially needing to fill this void to maintain revenue growth. Consumer consumption of adult content has shifted from physical media to the web, while online usage is changing rapidly as technological advancements allow the deployment of more advanced and interactive multimedia services.

Key findings from this report

1. Fragmentation is rife. Within the online adult entertainment industry, there are a small number of large firms and a huge number of smaller firms; the rise of tube sites means that this proliferation is more marked than ever before.
2. The wide range of content available for free will continue to have a negative impact on premium providers’ ability to attract and retain fee-paying clients.
3. Relative to tube sites, the online destinations of leading established market players attract far lower traffic volumes and usage.

Key questions answered

1. What are the major trends shaping the online adult entertainment market?
2. Why are traditional adult entertainment firms investing so heavily in the deployment of online services?
3. Which factors are likely to restrict the potential of online and mobile adult entertainment services and why?
4. To what extent will adult tube sites threaten the traditional status quo across the adult entertainment industry?
5. How will the market for adult entertainment services evolve, and which future trends will impact on developments over the course of the next 2-3 years?
 
 
  Table of Contents : 
Table of Contents
The Future of Online Adult Entertainment
Executive summary 10
Market context: the rise of online services 10
Shifting the balance of power 11
Company profiles 12
The future of online adult entertainment 13
Chapter 1 Introduction 16
Introduction 16
Who is this report for? 16
Definitions 17
Adult entertainment 17
Convergence 17
Digital pay-TV (DTV) 17
Internet Protocol TV (IPTV) 17
Internet TV 17
Mobile TV 17
Peer-to-peer (P2P) networking 18
Social networking 18
Tube sites 18
User-generated content (UGC) 18
Video on demand (VOD) 18
Chapter 2 Market context: the rise of online services 20
Summary 20
Introduction 21
Online adult entertainment market trends 22
A highly fragmented market 23
DVD and magazine sales fall in the face of rising online uptake 24
Echoing developments in the mainstream multimedia market 24
Adult movie production and DVD sales on the decline 25
The explosion of online services 28
Broadband market development drives online adult entertainment opportunities 31
Higher speeds bring new content-related opportunities 35
Consumers exploit broadband potential 36
Long- and short-form content each have their place 37
Online video usage is increasing rapidly 40
Consumers flock to online adult services 41
Online adult content user demographics 43
Regulation and censorship provides significant challenges 45
Regulation varies considerably by country 46
Restrictive measures show varying levels of success 49
China’s anti-pornography crack-down 50
Age verification comes under scrutiny 53
Piracy just as prevalent as in the mainstream entertainment sector 56
Chapter 3 Shifting the balance of power 60
Summary 60
Introduction 61
Shifting the balance of power 61
Tube sites make their presence felt 61
Low cost of entry results in a crowded market place 62
Revenue generation is a difficult task 64
Free online content impacts heavily on traditional players 67
Traditional players seek to catch up lost ground online 68
Tube sites offer some potential for content producers 69
Mobile opportunities increase 70
Adult mobile services develop apace 71
Rising 3G penetration boosts demand for mobile content 72
Device evolution boosts mobile content potential 75
Mobile TV opportunities limited in the short term 77
Alternative portable solutions are gaining more traction 78
Major hurdles remain 79
Continued demand for digital TV services evident 80
Chapter 4 Company profiles 84
Summary 84
Introduction 85
Private Media Group 86
Vivid Entertainment 90
Playboy Enterprises 92
New Frontier Media 97
Beate Uhse 100
Conclusions 102
Chapter 5 The future of online adult entertainment 104
Summary 104
Introduction 105
Future adult entertainment market trends 105
Generating revenue from tube sites will be a difficult task 105
A focus on interactivity and ‘unpiratable’ content 106
Consumers seek more interactivity 107
Live video chat services show their potential 107
Haptic content could become a reality 108
Online providers must ensure that content is regularly refreshed 108
Repurposing of content for multiple devices increasingly essential 109
Adult console games on the horizon? 109
High definition content and 3D-TV 110
Consolidation is on the cards 111
Online services to offset declining DVD sales 112
Asia-Pacific to become the largest online adult entertainment market 116
Index 120

List of Figures
Figure 2.1: Historic US adult video rental/sales revenues ($bn), 1992-2006 26
Figure 2.2: Private Media Group’s declining magazine circulation 28
Figure 2.3: Worldwide consumer Internet access subscribers, 2007-2012 31
Figure 2.4: Consumer Internet subscribers by region, 2008 33
Figure 2.5: Internet subscribers by region, 2012 34
Figure 2.6: Broadband boosts multimedia usage (2008) 37
Figure 2.7: Short-form content still rules in the online world (2008) 38
Figure 2.8: Interest in user-generated content declines with age 39
Figure 2.9: Proportion of online population streaming online video, December 2008 40
Figure 2.10: Online video reaches 80% of US consumers 41
Figure 2.11: Adult and advertising account for a growing % of US online video 42
Figure 2.12: Demographic comparison of adult sites users: age 43
Figure 2.13: Demographic comparison of adult sites users: gender 44
Figure 2.14: Browsing location comparison 45
Figure 2.15: Legal status of pornography by country 47
Figure 2.16: China consumer Internet subscribers (000s), 2007-2012 51
Figure 2.17: Chinese adult content censorship appears to be working 53
Figure 2.18: UK teenagers accessing adult content 55
Figure 3.19: Tube sites drive adult video content usage 64
Figure 3.20: Redtube.com premium subscription offering 65
Figure 3.21: 3G share of worldwide mobile phone subscriptions & revenues, 2005-2013 73
Figure 3.22: Worldwide mobile connections and revenues, 2007-2013 74
Figure 3.23: Smartphone shipments by region (000s), 2008-2014 76
Figure 3.24: Global VOD revenues ($m), 2007-2012 81
Figure 4.25: Private Media Group revenue by sector (€000), 2002-2008 87
Figure 4.26: Private Media Group revenue sector share (% revenue), 2002-2008 89
Figure 4.27: Vivid Entertainment estimated revenue sector share (% revenue), 2005 and 2008 91
Figure 4.28: Playboy Enterprises revenue by sector ($m), 2003-2008 93
Figure 4.29: Playboy Enterprises revenue sector share (% revenue), 2003-2008 95
Figure 4.30: New Frontier Media revenue by sector, 2003-2008 98
Figure 4.31: New Frontier Media revenue sector share (% revenue), 2003-2008 99
Figure 4.32: Beate Uhse revenue by sector (€000), 2003-2008 100
Figure 4.33: Beate Uhse revenue sector share (% revenue), 2003-2008 102
Figure 5.34: Worldwide adult entertainment revenues by sector ($m), 2008-2012 114
Figure 5.35: Worldwide adult entertainment revenue sector share (% revenue), 2008-2012 115
Figure 5.36: Online adult entertainment revenues by region ($m), 2008-2012 117
Figure 5.37: Online adult entertainment revenue regional share (% revenue), 2008-2012 118

List of Tables
Table 2.1: Historic US adult video rental/sales revenues ($bn), 1992-2006 27
Table 2.2: Worldwide consumer Internet access subscribers, 2007-2012 32
Table 2.3: Consumer Internet subscribers by region, 2008 33
Table 2.4: Forecast consumer Internet subscribers by region (000s), 2012 35
Table 2.5: Adult and advertising account for a growing % of US online video 42
Table 2.6: China consumer Internet subscribers (000s), 2007-2012 52
Table 3.7: 3G share of worldwide mobile phone subscriptions & revenues, 2004-13 73
Table 3.8: Worldwide mobile connections and revenues, 2007-2013 75
Table 3.9: Worldwide smart phone shipments by region (millions), 2008-2014 76
Table 3.10: Global VOD revenues ($m), 2007-2012 82
Table 4.11: Private Media Group revenue by sector (€000), 2002-2008 88
Table 4.12: Playboy Enterprises revenue by sector ($m), 2003-2008 94
Table 4.13: New Frontier Media revenue by sector ($m), 2003-2008 98
Table 4.14: Beate Uhse revenue by sector (€000), 2003-2008 101
Table 5.15: Worldwide adult entertainment revenues by sector ($m), 2008-2012 114
Table 5.16: Worldwide adult entertainment revenue sector share (% revenue), 2008-2012 116
Table 5.17: Online adult entertainment revenues by region ($m), 2008-2012 11
 
 

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