The innovators dilemma

Another article from the NY Times where it seems the technology that “made” the pornography industry is being used against itself and as such could fundamentally change the industry.

Basically as Clayton Christensen called it “The Innovator’s Dilemma”. Existing powerhouses invest heavily in technology (the big traditional pornography houses) only to be beaten at their own game by smaller, players using better/different technology who changed the market structure (the amateur with their home video camera and broadband internet) .

And unlike consumers looking for music and other media, viewers of pornography do not seem to mind giving up brand-name producers and performers for anonymous ones, or a well-lighted movie set for a ratty couch at an amateur videographer’s house.

After years of essentially steady increases, sales and rentals of pornographic videos were $3.62 billion in 2006, down from $4.28 billion in 2005, according to estimates by AVN, an industry trade publication. If the situation does not change, the overall $13 billion sex-related entertainment market may shrink this year, said Paul Fishbein, president of AVN Media Network, the magazine’s publisher. The industry’s online revenue is substantial but is not growing quickly enough to make up for the drop in video income.

But to me here is the kicker:-

The spread of high-speed Internet access promised even further growth. Instead, faster connections have simply allowed people to download free movies more quickly, and allowed amateur moviemakers to upload their creations easily.

For an industry that grow at an amazing rate through the use of the internet it must be coming as a bit of a shock that the technology is now turning against them.

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