February 26, 2007 4:00 AM PST
Red-light district on a tiny mobile screen
Adult programming has been an innovator for many new entertainment technologies. Home video was developed initially to supply adult programming. Cable operators' pay-per-view services were initially developed to sell and distribute adult movies directly to consumers in their homes. And some of the earliest Web sites and chat rooms emerged on the Internet to distribute and discuss porn.
"Porn has worked in just about every medium there is, from physical clubs to print to DVD to the Internet," said Bruce Gibson, research director at U.K.-based research firm Juniper Research. "So why wouldn't it work in mobile?"
Now with the dawn of new high-speed 3G, or third-generation wireless networks, pornographic videos are likely to flood the small screen. Still, analysts say several unresolved issues will likely prevent adult mobile content from becoming a major traffic-driving sensation anytime soon.
"There are a number of issues at the moment that constrain its potential," Gibson said. "But the rollout of 3G networks and improved mobile Internet navigation will certainly make it much more available. Whether or not it will appeal to more casual users and gain wider acceptance, we'll have to wait and see."
In 2006, adult mobile content generated about $1.4 billion in sales worldwide in a market where mobile entertainment in general generated about $17 billion, according to Juniper Research. While adult mobile content generated far less revenue than other types of entertainment such as mobile music, which accounted for $6.6 billion, it will likely grow over the next several years. By 2011, adult content will account for $3.3 billion worth of mobile content sales out of a total of $77 billion in entertainment revenue, according to Juniper Research.
Still, mobile phones as a distribution medium for adult content still have a long way to go in terms of becoming a meaningful source of revenue. Steven Hirsch, co-CEO of Vivid Entertainment, one of the world's largest adult film producers, said that mobile distribution currently makes up only about 5 percent of his company's total revenue.
The lackluster reception adult entertainment has gotten in the wireless market so far is largely due to mobile operators' concerns over age verification and a general reluctance in some parts of the world to associate themselves with seedy content providers.
Other barriers are more technical in nature. Most of the world's 2.5 billion cell phone subscribers don't yet have 3G-capable handsets. And the mobile Internet is still difficult to navigate, making it hard for users to find content and forcing them to access material that's available only through their operator.
But as all these issues get resolved, Hirsch said he sees a huge upside to the mobile market.
"We have been interested in wireless for several years," he said. "We are one of the few guys who are able to monetize our content wirelessly, so it makes sense for us to be here."
Today most adult content is accessed through a mobile operator's own menu or "deck." In Europe and in parts of Asia this hasn't been a major barrier for adult content creators. Racy movies and pictures are much more socially accepted there. As a result, even the largest carriers in Europe, including Vodafone, Orange and T-Mobile, carry mobile movies from porn film producers such as Vivid Entertainment.
But the situation is much different in North America. Here none of the large U.S. wireless carriers offer adult content on their decks. Hirsch believes that mobile operators are reluctant to add adult content to their lineups because they aren't comfortable yet with technology to verify subscribers' ages.
"Once operators become more comfortable with access controls, and they see that there is no fraud and they can verify age, I think they'll start adding the content," he said. "It's not our desire for this content to be seen by anyone other than adults who want to view it."
Mobile content experts say that the parental control issues are just one reason that operators in North America haven't added porn to their decks. Another major reason is that they fear a backlash from the public. Earlier this month, Telus, Canada's second-biggest phone company, reversed its decision to sell pornography on mobile phones after customers including the Catholic Church threatened to cancel their service.
"North American companies are very brand conscious," Gibson said. "They don't want to be associated with adult content, so they don't want mobile porn seen on their Web portals."
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