Will Brexit Affect the Adult Industry?

LOS ANGELES—North Americans woke up Friday to the news that a majority of British voters decided the United Kingdom should leave the European Union, and immediately started asking what Brexit—as the referendum has come to be known—means for the U.K., the EU and themselves.

The aftermath of the vote has seen many voters express regret for their “leave” votes, as well as the resignation of Prime Minister David Cameron, the fall of the British pound to a 31-year low and the reality of stock exchanges around the world suffering major losses. Right now, it’s unclear if the U.K.—comprised of England, Scotland, Wales and Northern Ireland—will remain intact.

The unprecedented vote puts global economies into uncertainty, but analysts are already making predictions on how the decision will affect other countries. According to TheStar.com, Brexit could mean a number of changes to Canadian companies, including forcing those who invested in the U.K. to access the EU market to find alternatives.

Lovehoney co-owner Richard Longhurst said it was “business as usual” at Lovehoney, Britain's biggest online sex toy retailer, following the historic vote to leave the European Union, though he noted it was still too early to assess the full impact of the decision on the sex toy industry.

Lovehoney is based in Bath, England, but also has a thriving U.S. website Lovehoney.com.

“There has been a very low signal-to-noise ratio since the U.K. voted to leave the European Union,” Longhurst said. "Long term, nobody knows what will happen. Short term, all we know is that sterling has depreciated against the dollar—but sensible companies were hedged against that risk ... weren't they?

"For Lovehoney, it's business as usual—the Internet still works and sex has not gone out of fashion,” he continued. “We're growing fast, pleasing our customers around the world, developing awesome new products and unique brands, and, of course, looking forward to the release of Fifty Shades Darker next Valentine's Day."

Britain has yet to invoke the Article 50 motion which would take it out of the European Union—and end Britain's place in the European single market. It has two years to decide whether to action Article 50.

Any decision is unlikely to happen until a new Prime Minister is chosen to replace David Cameron by the ruling Conservative Party following Cameron's resignation the day after the vote to Leave the EU. Cameron led the unsuccessful campaign for Britain to remain in the EU. 


PinkCherry.com is a Toronto-based e-commerce site for buying and selling adult novelties. Reps there said it’s unclear what, if any, effect the Brexit will have on their company.

“As we just focus on North America there is no immediate impact on us; however this is all new and how things play out on so many levels will be interesting,” Nancy Freedman, marketing manager for PickCherry.com, told AVN. “The economic impact locally and globally will certainly be something to watch.”

The decline of the British pound against the U.S. dollar means that U.S. exports of physical goods—including adult DVDs—could become more expensive for buyers with weaker currencies. Simply put, American-made porn DVDs and sex toys might be considered extravagances not worth buying if Britons now have to dip into their savings to cover for their everyday living expenses.

While there is definitely some sense of panic associated with the Brexit, there are no concrete ideas on long-term effects.

“Though there's a bit of chaos in the financial world the day after the U.K. vote, it's unclear what kind of lasting impact this decision will have on the global economy,” said Rainey Stricklin of Juicy Ads, a leading adult advertising network. “We once believed that porn was ‘recession-proof.’ We learned during the last ‘economic downturn’ that we're not immune. 

“We should always be concerned when it comes to potential changes in the economy and be prepared for fluctuations,” Rainey told AVN. “Whether it is this issue or not, we should all be ready for an eventual rainy day.”

Mitch Farber, CEO of Netbilling—which provides merchant accounts, multi-currency transaction processing, and call center services to thousands of e-commerce and retail companies of all sizes—told AVN he doesn’t believe there is much to worry about.

"Aside from an initial weakening of the British pound, which could affect spending from British consumers for porn and other sex-related goods and services, I don't foresee any long-term effect to the adult industry,” he said. “There will be a short-term economic impact felt worldwide that will stabilize relatively quickly."

Others in the industry said they are prepared to take a "wait and see" attitude, but will work hard to keep an eye on markets worldwide to see what impact the decision will ultimately have.

“Given that most in the financial industry expected a different outcome, it is hard to say the impact as yet,” explained Gary Jackson, managing vice president for CCBill. “But for our industry in general, anytime there is global instability in financial markets, we tend to see lower spending, and  consumers step back from purchases—essentially spending less when they feel insecure. So we need to keep an eye on sales trends with purchases, especially in EU and U.K. markets. Our obvious concern is how this will affect the future of the EU and the Euro—and the U.S.

“Until the now-defunct trade agreements have a pricing impact, currencies are obviously in flux right now with this, and currency exchange is likely to have a roller-coaster impact on margins for prices for products sold in GBP and EUR,” Jackson told AVN. “Most processing platforms like CCBill offer real-time currency conversion processes—and this is a time in which using something like Regional Pricing (regional localized pricing) will be of value in currency flux and can help protect margins. 

“As we offer several European payment options, there are going to be some questions on what this means to the Single Euro Payments Area (SEPA) integration initiative for the EU and how this pull-out will affect that network, at least in payment services in which the U.K. had been included,” he added. “The SEPA bank transfer system serves in Euros.

“Although so much is still up in the air with this historic change, CCBill will be watching and analyzing as it happens, but we do not at this point anticipate any significant impact on payment services like CCBill for our merchants,” Jackson said. “For merchants in the business who leverage a third-party provider, their trust is correctly placed in the processing experts to work across multiple banking regions, monitor changes in the financial and regulatory worlds, and adapt on their behalf, rather than forcing the merchant to bear the weight of managing these crazy changes themselves.  

“Webmaster Access will certainly be interesting this year!”