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When it comes to the business of the Internet, there's no getting around the fact that pornography accounts for a lot of page views and billions of dollars of revenue. But the industry isn't taking in as much as it used to, as fewer and fewer people are paying to view. We're going to hear more about why the online porn business is struggling, so a warning: This story is not suitable for younger listeners.
Aarti Shahani has this report from member station KQED in San Francisco.
AARTI SHAHANI, BYLINE: Pornography is not some hidden corner of the Internet. About one-quarter of all Web searches are for porn. I hit the streets of San Francisco to ask strangers their favorite search terms. And it wasn't hard to get answers on the record.
JASON RAVEL: Teacher porn, that's who I was around most often in grade school - I was a really good student.
CHANELLE DORTON: Ebony lesbian sex. I don't like straight porn.
NEEL BELL: Heterosexual porn that doesn't involve porn stars. It lets you think that it's a real life situation more.
SHAHANI: That's Jason Ravel at a coffee shop, Chanelle Dorton passing by the train station, and my cab driver Neel Bell. Dorton says she consumes porn like some people consume news.
DORTON: I check my e-mail online, play games online. So it probably falls after that, like an extra-curricular activity, I guess.
SHAHANI: But just about everyone I ask - including Bell - says they never, ever pay for it.
BELL: Never pay for porn, never pay for sex. I guess I'm a cheapskate when it comes down to it. I download all my music, too.
PETER ACKWORTH: We're suffering what happened to the music industry a while back. It's becoming much easier to get content for free and people are less apt to want to pay for it.
SHAHANI: Meet Peter Ackworth, founder of Kink.com, a porn conglomerate based in San Francisco. Back in the 1990s, Ackworth was getting his Ph.D. in finance at Columbia University. And he realized there was lots of money to be made in streaming sex. So he started video shoots right out of his own dorm room.
ACKWORTH: You honestly couldn't add the sites fast enough. It was like money was falling from the sky.
SHAHANI: But because of piracy and an explosion of free sites, the heyday is over. Industry analysts say global revenue plummeted by 50 percent, from $20 billion in 2007 to $10 billion by 2011. And porn has another problem that other media companies do not have: Users are afraid of leaving a digital record - not because of the NSA National Security Agency.
ACKWORTH: We get constantly e-mails from people's wives, because they found, you know, a charge on the husband's credit card and, you know, they're upset to find out that it's for pornography.
SHAHANI: About 15 percent of Web pages are porn sites, that's more than one in seven. A lot of the free stuff is poorly made, low resolution, or it just shows a short clip of a longer video. So Ackworth plans to lure more viewers out of the shadows and into credit card payments, by offering a better product. He takes me upstairs to show me.
UNIDENTIFIED WOMAN: The part of my body that I like the most would probably be...
SHAHANI: We're here on the set of a live porn shoot. The model is performing in front of a webcam. Paying subscribers are typing in what they'd like her to do next. And note: you can't pirate this kind of custom content.
At the other end of the room there's a community event. Members of Kink.com are dressed in tuxedos and gowns, ready to role-play. The MC riles them up.
UNIDENTIFIED MAN: Have as much of a plot about how the day is going to go for you, as you can.
SHAHANI: Ackworth is creating a lifestyle brand. That's what media companies do to build loyalty with fans. He's also hiring a team of data analysts to make Kink.com like the movie company Netflix: track your every move and, based on what you search and click, push the content you like most right in front of you.
Ackworth says no one has to worry about personal data getting sold to outside advertisers.
ACKWORTH: I shouldn't think anyone would really be interested in that. I mean who would want to buy data pertaining to whether somebody likes bondage or spanking?
ANDREW KAHL: 891 distinct companies tracked data about users watching pornography. It is bigger than a few companies that you might have heard of.
SHAHANI: Andrew Kahl is a researcher with Evidon, a company in New York that creates privacy tools. And over the summer, he studied porn websites and found that they are, indeed, investing in analytics. While a buyer for that data does not exist yet to Kahl's knowledge, he can easily think of one.
KAHL: Let's say that a condom manufacturer goes to a credible news site and says: Hey, I want to advertise on your news site; I would only show condom advertisements to people who have also viewed pornography today. That news site might say: OK, well now I'm not as concerned about the sensitivity of the user. Yeah, we'll take your condom advertising money.
SHAHANI: Kahl says porn companies are doing data analytics for a reason: to get back on top of e-commerce.
For NPR News, I'm Aarti Shahani in San Francisco.
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