Porn Valley [apcstart.com]- It’s often said that the porn industry has led the market in working out new ways to make money from the Internet. Adult sites were the first to make use of affiliate marketing schemes to sell their wares, and the first to offer subscription sites for selling both images and video.

As video download services become more common — helped along in Australia by the belated arrival of something resembling a decent broadband speed for most users — it stands to reason that they might want to see how well the porn industry has done in this space.

The answer to that question is somewhat surprising. Rather than aiming to download high-quality movies either permanently or temporarily, it seems that the majority of adult viewers are quite happy with short spurts of viewing, using relatively low-resolution streaming protocols.

“98% of the business is streaming,” said Richard Cohen, [pictured] CEO of Hotmovies.com, a prominent pay-per-minute adult site network which charges its customers US 10 cents per minute to watch the skin flick of their choice. Apparently, it’s a fairly quick process.

“Customers do not want to watch entire movies,” Cohen said. “They want to watch scenes. They might watch a scene once or twice, then they move on – but they come back to the site over and over again.”

Of course, there’s a critical difference here which we’ll try and elucidate tastefully. With rare exceptions (for which medical treatment is now available), most porn viewers don’t want to watch an adult movie in its entirety, since their functional purpose is unlikely to stretch to 90 minutes or more. With rare exceptions (Battlefield Earth springs to mind), most mainstream viewers do want to watch movies in their entirety. Nonetheless, the trend seems worth noting.

According to Cohen, porn is a particularly transient business. “They don’t want to own it, they don’t want to see it more than once,” he told a seminar on delivery technologies at last week’s Adult Entertainment Expo in Las Vegas. “A lot of them don’t want it on their hard drive, if they’re doing it at home.”

That might explain why permanent options don’t seem popular with porn consumers. “We have iPod downloads, but they don’t really sell,” Cohen said. The same applies to Amazon-style sell-through schemes. “We have links on thousands of titles saying ‘buy this movie’ and it’s unbelievable how little people click on them. And download-to-own is the same. People don’t use it.”

Indeed, some people go to extraordinary lengths to protect their anonymity. “We get a lot of money orders from people who won’t want it on their credit cards,” Cohen said. Other options have been explored: “For a while, we went through PayPal, which was really a good thing, but they threw us out — twice.” (PayPal has a strict no-adult-content policy.)

Those who don’t want to be anonymous may well be cheapskates. According to a recent NPD Group study, 60% of the content on file sharing networks is porn movies.

In either scenario, the pay-per-minute adult business also provides an interesting example of the much-discussed long tail effect. “Every night, there’s at least 38,000 of our 60,000 videos that are watched for at least 20 seconds,” Cohen said. “I couldn’t believe that at first, but I got our programmers to check.”

It seems one man’s meat is indeed another man’s meat market. “We have studios where they film it all in their basement, and people still want to watch it.”

Cohen predicts a rapid demise for ‘conventional’ adult sites which aim to achieve a recurring monthly subscription for a particular set of content.

“Membership sites for adult content are dying,” Cohen said. “The consumer is sick and tired of having to pay every month. We get so many emails from people saying ‘Please cancel’, and we have to send a mail saying ‘There’s nothing to cancel’.”

He concedes more competition is likely if that happens, but doesn’t seem worried. “It’s like Las Vegas: they keep building more hotels, and people keep coming. Pay-per-minute is going to grow the entire market.”