What it is: The porn industry offers products for adults often at odds with governments and legal protection.
In most industries, companies can petition the government for legal protection from tariffs or request protective legislation. Just witness the near bankruptcy of General Motors that got a taxpayer-funded bailout to save a private corporation and its executives from their own failures.
The porn industry is different. The government not only doesn’t care about the porn industry, it’s often trying to shut them down. As a result, the porn industry can’t rely on government protection of any kind. That means the porn industry has to rely on their own wits to survive and stay ahead of the competition without any government aid whatsoever.
As streaming video piracy sites multiply across the Internet, the porn industry is in trouble. They used to make money selling DVDs of pornography, but with video piracy so easy to accomplish and the lack of government enforcement on pornography copyrights, the porn industry is losing money.
The lesson is clear. If your business model is under attack, you have to rely on innovation to save yourself, even if you aren’t in the adult entertainment business.
Throughout the years, that’s exactly what the porn industry has done. Back when websites were still an oddity, porn sites were already accepting credit card payments online and offering streaming video to customers. Follow the porn industry and you can see the latest business trends.
As the porn industry suffers from streaming video piracy, they’ve found two ways to survive. One is to target a niche. Two is to offer custom pornography.
It’s easy to find pornography on the Internet. However, if you’re looking for specific types of pornography such as gay sex, clowns having sex, or midgets having sex, that’s much harder to find. That’s why porn sites that offer this type of niche content can thrive.
If you’re selling what’s easily available, you don’t stand a chance because competition will eat you alive. If you’re selling what everyone else is selling, there’s no reason to buy anything from you.
In the computer world, that’s why commodity operating systems like Android have a huge market share but horrible profit margins. How can you make money selling Android phones when everyone else sells the exact same type of Android phone? If you don’t have a unique niche, you don’t have a business. It’s that simple.
The second lesson from the porn industry involves custom pornography through what’s known as webcam girls. That’s where you pay per minute to talk to a live woman who will take requests. Such custom pornography is valuable because it can never be pirated. What you like will rarely be what other people like and what you want to see will almost never be exactly what someone else wants to see.
This goes back to the lesson of niche markets. Not only do you want a niche market, but you also want to cater to your customers in a way that they can’t get from anyone else.
Look at how many computer and smartphone companies treat their customers. As soon as you buy a product from them, they don’t want to hear from you again because now you’re just costing them money. That’s why Dell Computers and other companies outsource their technical support overseas. That isn’t to provide better technical support. That’s to save money for the company, regardless of the effect it had on the customer.
Ever wonder why so many smartphones still run older versions of Android? That’s because smartphone manufacturers have zero incentive to update their operating systems. After they’ve made a profit selling you a phone, they don’t want to do anything more for you because that now eats into their profits.
One reason why Apple Stores are popular is because they offer customers a chance to talk to a live technical support person at a Genius Bar. Having live technical support costs Apple more, but they pass the costs on to the customer and the customer is happier. Companies that cut costs to protect themselves don’t care about the customer, so the customer has no reason to care for that particular company.
If the porn industry teaches us anything, it’s that niche markets and custom service sells. Commodity products that can be found elsewhere do not sell. That’s why all those Android smartphone manufacturers beat each other up for market share and wind up with little profit to show for their efforts.
On the other hand, Apple created their own niche market because if you want an iPhone, iPad, or Apple Watch, you have no choice but to buy it from Apple. Apple also strives to keep customers happy through live interaction with technical support people through the Genius Bar. You may never need their help but when you do, you’ll be glad to use it rather than go through the frustrating process of calling an outsourced technical support center in another country.
Learn from the lessons of the porn industry. The money lies in niche markets and customer service. Avoid niche markets and your product has nothing to differentiate itself from everything else. Avoid customer service and your customers have no reason to stay with you.
On the other hand, carve a niche market for yourself and you immediately have no direct competition. Please the customer and you further distance yourself from any competition.
The porn industry has to survive through its wits. By following the porn industry, you can see what could work in your own world as well. To learn more about how the adult entertainment industry uses marketing, take a look at “Uncensored Sales Strategies.”