The Hidden Economics of Porn

Humans have been creating images of sex and genitalia for millions of years, but it is only in the past few centuries—since the 1600s, according to historians—that these representations started meeting academics’ preferred definition of pornography, which involves both the violation of taboos and the intention of arousal. The first efforts to make money off of this new endeavor could not have come long after that.

With the publication of Playboy and Hustler in the mid-20th-century, porn started going corporate, and the industry has since bloomed into an enterprise so vast that people have a hard time estimating its size. Like any other industry, porn has its shady qualities—labor abuses, content piracy, and a blemished supply chain, to name a few. But unlike nearly any other industry, these unseemly features are allowed to thrive, mostly unchecked, behind the curtain of social taboo.

Shira Tarrant, a professor of women’s, gender, and sexuality studies at Cal State Long Beach, recently took stock of porn’s financial side in the form of a book, The Pornography Industry. I spoke with her about what she found in her research, and the interview that follows has been edited and condensed for the sake of clarity.

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Joe Pinsker: You mention in the book that some people have estimated that the porn industry brings in more money than Amazon, Microsoft, Google, Apple, and Yahoo, combined. But then you note that that's totally wrong. Why is it so hard to estimate the size of the industry?

Shira Tarrant: It's hard for several reasons. Official records are hard to come by. Many productions don't even keep official records, and there are very few researchers looking at the economic side of porn, because a lot of times for academics and researchers, pornography is viewed as a sort of LOL, to-the-side kind of thing, rather than the very serious financial and economic matter that it is. This is true for the industry's revenues, but also for pay rates for individual actors. So those numbers get a little fuzzy, even though the industry is willing to say that it's suffering from piracy and after the Great Recession, and things like that.

Pinsker: One thing I think many people might be surprised to learn is that many of the big-name porn sites are all owned by this one company, MindGeek. Do you have a sense of how much of the industry that company controls?

Tarrant: No, I don't. Those figures are really hard to determine because porn is mostly online, as opposed to DVD sales or magazine sales, which you can track more easily. Tube sites—such as YouPorn, RedTube, Pornhub—are hugely popular and it's estimated that MindGeek owns 8 out of the 10 largest tube sites.*

Pinsker: A distinguishing feature of tube sites is that a lot of their stuff is actually taken from other places—it’s pirated content. Is that a fair generalization?

Tarrant: Yes, and it's a huge problem within the industry because it's stolen, basically, and the tube sites are aggregators of a bunch of different links and clips, and they are very often pirated or stolen. So then the folks who made the content can go after them, and they do, but you have to have a lot of time and money and resources to stay on top of that.

Pinsker: Just to make sure I'm understanding how a significant portion of the industry is set up: There's this big company, and if you can imagine a building they own that says MindGeek at the top, there are all these front doors that have different labels, and the things that everyone is entering the building for is just a lot of stolen stuff. Is that kind of how this works?

Tarrant: That's exactly it. I don't think it should be a total surprise that there's a monopoly, because that mimics the way that other large corporate interests scoop up smaller companies. So yeah, those doors on that building, like you say, would include YouPorn, RedTube, PornHub, Xtube, and then, their business model, much like any other media-business model, features vertical integration and horizontal integration, so they're really monopolizing the industry.

Pinsker: It seems like this industry and any monopoly or unfair things going on in it probably don't receive as much scrutiny as another industry might, because the industry itself is stigmatized and thought of as something to keep at arm's length.

Tarrant: Exactly. I think two things are happening. One is that monopoly doesn't seem to be getting a lot of attention in our culture right now in general. And then in addition, you're exactly right that it hasn't been the focus of serious business attention, but we're talking about a lot of money. I have a figure in the book estimating that just in San Fernando Valley, the industry employs 20,000 people. And it's estimated, again, that stolen porn impacts the adult industry by about $2 billion a year. So there are the questions about ethics and crime, but we're also talking about a lot of money.

Pinsker: When I hear all this, I’m fascinated by the contrast between this industry and something like the food industry, where people are up in arms about factory farming and other things going on behind the scenes. Do you think some of the porn industry’s darker sides persist because when people are interacting with these companies, they are in a different mental state than they are in other realms of their lives?

Tarrant: I think that that's right. People are getting sexually aroused and they just kind of go into a political or economic denial about what they're doing. And then also, we live in a culture that doesn't want to talk about sex or sexuality. For instance, as I was doing research for this book, if I talked about pornography, then all of a sudden my conversation was sexualized. I've had this experience so many times, where people, colleagues or what have you, aren't even listening to what I'm saying about the industry or the politics or the financial aspects of what's going on. They're just thinking about whether or not I'm watching porn. If I said I was working on voting behavior, they wouldn't get so excited that they lost sight of what I was talking about.

That's what my experience is, and it dovetails with your question about ethics. We wouldn't dream of walking into Whole Foods and stealing. But that part of people's ethical behavior turns off when they go online and they find free porn. Watching free porn is the equivalent of walking into the grocery store and walking out with food that you're not paying for.

Making ethical decisions about pornography means knowing where your porn comes from and the labor conditions under which it was made. Those are the sorts of questions that economists are concerned with. If we're willing to be concerned about those issues when it comes to sneakers or food, then we need to transfer those concerns to the adult industry as well.

Pinsker: There's been a lot of attention paid in the last couple of years to how the algorithms that big companies, like Amazon or Google, come up with can shape users' lives, and yet details about them are kind of hidden to users. Could you talk through some of the biggest decisions that users, whether they know it or not, are outsourcing to porn companies?

Tarrant: I like the comparison that you use—that the algorithm is not unlike algorithms that Amazon or Netflix use, or the ads on Facebook based on your browser history elsewhere. Again, there's that part of their rational brain that turns off and they think that pornography is this whole other kind of experience that is unlike the rest of their consumer history online. It starts with how pornography is keyworded. So, people put in search terms, but those search terms aren't all that original, really. Because where do we learn the search words that we're looking for? It's sort of a chicken-and-egg problem. And so porn gets keyworded in very stereotyped, often sexist, often racist ways, and also just with a narrow-minded view of sexuality.

If you are interested in something like double oral, and you put that into a browser, you're going to get two women giving one guy a blowjob. If you put “double oral” into a browser you're not likely to get two men or two people giving a woman oral sex. That's just not how it's keyworded. That then feeds into what the industry decides to make more of.

In addition, MindGeek, for example, uses algorithms to create highly curated personalized sites that are based on the user's search history. It's a lot like Amazon, where you look for a couple of books and they say, “You might also be interested in this.” Then you're being spoon-fed a limited range of pornography based on the keywords you use, based on your geographic location, based on their algorithms and the information that they're processing about time of day. They're doing a lot of data collection. Online-porn users don't necessarily realize that their porn-use patterns are largely molded by a corporation. We talk about the construction of wants and needs in other aspects of the economy, but that applies just as well to pornography.

Pinsker: And then, I would think, there’s a trickle-down effect culturally, where the sorts of things people see online end up shaping social norms.

Tarrant: That's exactly right. It looks as if the very popular porn is “MILF,” or “teen,” etc. But in addition to reflecting a very spoon-fed range of desires, it does then look as if that's what's popular, and then people think that's popular, and it really shapes our views about female sexuality, about race, about gender, about trans status, about how we understand agency and desire.

Pinsker: In the book, you talk about the possibility of ethical or fair-trade porn. The conversation about ethical anything or fair-trade anything often is framed as a matter of "do the right thing." But the way you talk about it, it sounds like breaking free from the big main sites isn't just good for all the performers and producers involved, but would be good for average users. Do you think that’s right?

Tarrant: I can't decide what good or bad is for people—I don't want to make moral pronouncements about that. But I think moving away from those mainstream tube sites and being adventurous is important. To think, if we look at mainstream porn, that we're being wild or really sexy, we're kind of eating at McDonald’s all the time. It's the sex equivalent of eating all our meals at McDonald’s. Being more adventurous could really expand our definitions of sexuality, sexual pleasure, and sexual desire in ways that could be surprising.

Pinsker: Do you even think it's possible for society on any wide scale to be creating and consuming, as you say, adventurous porn?

Tarrant: I think there's a possibility that we could move towards more adventurous, ethical, non-sexist, non-racist porn that is actually really exciting. I want to make the analogy again with food. Again, for the longest time, organic was a really small niche market, and then when corporations realized there was money to be made, they got onboard. That watered down the meaning of “organic,” but it did start to change the public conversation about what's healthy food, what really tastes good, and what is actually over-salted but some company told us we thought we should like. So I could see a similar thing happening with more attention getting paid to how many options and varieties we really could have.

Pinsker: One thing you didn't talk about in the book was branding—how these companies present themselves to users. Are there any ways you can think of in which a site is designed to convey a certain feeling, or prompt people to view and think of sex in a certain way?

Tarrant: I would say my observation with the mainstream sites is they tend to bombard the viewer with multiple images really fast—like “click on this!” “click on this!” with moving images, and bells and whistles, kind of Vegas-Strip style. Some of the more independent queer or feminist sites I would say are more curated, and they don’t bombard the user in the same way.

Pinsker: So what do you think are the messages that these sites then send?

Tarrant: The mainstream tube-site conglomerate is almost like fast food—get in, get out, do what you came to do. The other sites take more time at the beginning to say, “Do you really want to enter this site?” I would have to think more about what that means. I hope someone does more work on that.

Pinsker: Everyone wants to know about the future of porn. There are a lot of articles these days about what virtual reality will do to people and to the industry, but I want to flip that question a little. Are we currently living in a future that people of the past feared, where really vivid porn is available online for free from anywhere?

Tarrant: On the one hand, the way online technology makes pornography available I think has positive aspects, in the sense that, for instance, in the past if you wanted to get pornography you had to go to a place, you had to go to a store, and if you were female, or transgender, that would be a scary place. Women walking into a theater to watch a movie in the middle of the day surrounded by guys jacking off? That seems risky and very unappealing. So online pornography means that more people are able to explore sexuality in visual images.

At the same time, not even considering virtual reality necessarily, there can be an immersive experience where people can go down the rabbit hole and emerge hours later. That concerns me, and I do think in a sense that that's the sort of future that people feared.

Another cause for concern would be the amount of porn that's being viewed during work hours, among government workers, in the police force, among professionals. Online porn makes it easy to do that and I think that's concerning. So when you ask, "Is this the future that people in the past feared?" I don't even know if people could've imagined a future when it would be possible to go to work and spend your workweek looking at porn.

*Ed. note: Tarrant attributes this estimate to a 2014 ​Slate article, but MindGeek says that number is too high.