Broadband Internet access gradually is becoming a defining characteristic of advanced industrialized economies, and broadband-take rates have been increasing at a rapid pace across the world. The latest update to ABI Research’s online broadband subscribers’ database forecasts that the total number of DSL and cable-broadband users in the world will grow by an average of 9 percent annually during the next five years, reaching 480 million subscribers by 2012.
Although online video often is free to consumers, it still makes big advertising dollars. When ad revenues from the free sites are combined with money from adult pay services like HotMovies or AEBN, the online video market already is pulling in more than $250,000,000 in the U.S. alone. That’s not bad, but it’s poised to grow more than tenfold in less than six years.
This news spells tremendous business growth for the adult industry. James Siebert of HotMovies believes that "having the reach of going further and further into every home across the world will allow us to reach more people across the globe and increase our business [exponentially]. The consumer will, in turn, get a better product from us. The Internet is a wonderful thing."
Albert Lazarito of SilverCash agrees. "With the expansion of broadband, satellite technology, and more affordable hardware to optimize the Internet experience, there is a direct correlation to a natural increase in overall business within the adult industry," he said.
Many companies in the adult industry believe this news also marks the beginning of the end for the DVD format. DVD, which replaced the VHS format years ago, possibly will be the last physical medium for the industry. Since pay-per-view often is best viewed through a broadband connection, some believe it will be only a matter of time until PPV will reign supreme.
Lazarito says not so fast. "Technology is dynamic. In turn, PPV and DVD maybe obsolete by 2012," he said. "The cycle of ‘household’ technologies [is] becoming shorter and shorter due to advancements in new media streams. I am confident that variation of both PPV and DVD will exist but not necessarily reflect what we are using today. PPV has certainly made inroads with the cable and Internet markets; however, their momentum suggests that there will be a lasting need for DVDs due to the profit margins found in the entire market. PPV has stricter regulations.
"When working with national broadcast organizations, the bureaucracy is often driven by political maneuvering and private sector interests," Lazarito continued. "This only exists because the barriers to enter this market represent a true oligopoly. Having said this, I do not feel PPV will replace DVDs in the near future. In my opinion, the convergence of your television and personal computer will be a larger effect on our daily lives in 2012 due to advancements in broadband."
No one can be sure what the final outcome may be when it comes to DVD versus PPV. However, one thing is certain: The more broadband subscriptions rise, the more opportunities there will be for the adult industry.
