Hurting For Cash, Online Porn Tries New Tricks : All Tech Considered Online pornography was the cutting edge of e-commerce during the Internet's early days, but its heyday is over. To recoup some of those costs, one porn empire in San Francisco is using data analytics, lifestyle events and new products to keep customers loyal.

Hurting For Cash, Online Porn Tries New Tricks

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From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

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 extracurricular 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 ACWORTH: 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 Acworth, founder of, a porn conglomerate based in San Francisco. Back in the 1990s, Acworth 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.

ACWORTH: 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 National Security Agency.

ACWORTH: 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 1 in 7. A lot of the free stuff is poorly made, low resolution, or it just shows a short clip of a longer video. So Acworth 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 have be...

SHAHANI: We're 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 are dressed in tuxedos and gowns, ready to role-play. The emcee riles them up.

UNIDENTIFIED MAN: And have as much of a plot about how the day is going to go for you, as you can.

SHAHANI: Acworth 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 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.

Acworth says no one has to worry about personal data getting sold to outside advertisers.

ACWORTH: 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: Eight-hundred and ninety one 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 yet exist, to Kahl's knowledge, he can easily think of one.

KAHL: Say that a condom manufacturer goes to a credible news site and says hey, I want to advertise my condoms 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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