The economic downturn, a massive saturation of free adult content on the Web and new, stricter rules on credit-card fraud have combined to cause tectonic changes in the industry. Traditionally, the business has depended on small, free sex sites to feed traffic to the larger pay sites. That model made many Webmasters at small adult-oriented sites very rich. But tighter wallets are changing the dynamic. Lots of people are canceling memberships, saying they ve lost a job or are stacked up with credit-card debt, said John Distasio, owner of Cyberfoxes.
Surfers are also now cognizant of the huge availability of free pictures and video clips.
They used to be very impulsive, Distasio said. Anybody who wants to get into the business now will probably fail. Celebrated porn entrepreneur Danni Ashe of Danni s Hard Drive reports her membership numbers are down though that is often a seasonal trend. The saturation problem, she admitted, isn t helping matters. As a result, the traffic that does flow through free sites doesn t tend to buy memberships from the pay-side operators.