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Yesterday a friend of mine told me that most of the money which is made in the internet is going to the porn industry. First I didn't believe any word and I was like "Hey, shut up! There is still Google and Amazon to count in. This must be some hoax!"

My friend told me of some source he found on the internet and, when I went home, I just fired up my favorite browser and googled for the words "statistics income erotic internet" to see the truth for myself. Eventually, I came across this and I was astonished!

I quote:

The pornography industry has larger revenues than Microsoft, Google, Amazon, eBay, Yahoo, Apple and Netflix combined. 2006 Worldwide Pornography Revenues ballooned to $97.06 billion.

Is this a joke? That website even has a Wikipedia entry!

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I don't find it surprising that the combined income of a given industry can surpass the income of any single company. –  user6327 Jan 24 '12 at 6:32
    
@JohnSteeley maybe you will be surprised by the answers, then :-) –  Sklivvz Jan 24 '12 at 7:57
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Wouldn't surprise me if that was true in the past. Porn industry were the pioneers of on-line payment and paid content. But nowadays this claim is ridiculous.. –  vartec Jul 19 '12 at 11:37
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2 Answers

up vote 10 down vote accepted

Good numbers are hard to find, but the answer is still certainly NO.

One of the key problems in evaluating anything to do with the Porn industry is that almost nobody has any incentive to report honest numbers. All the really big numbers come either from dodgy sources trying to "big up" the industry or from campaign groups opposing porn who want to exaggerate how big the problem is of their own reasons.

Even the famous $97bn estimate (from here) is often misunderstood. That isn't internet revenues at all but a crude estimate of worldwide revenue from all sources which includes three huge contributions from countries where the statistics are most likely very ropey (about $72bn from China, Japan and South Korea alone with the porn spend in Korea topping $500 per person). The estimates from the USA suggest about £13bn total spend in 2006 with about $3bn on the internet, $1bn on magazines and maybe $4bn of videos. These numbers look more plausible but far less impressive compared to mainstream media and internet companies.

Some skeptical analyses, though, suggest far smaller numbers. This Forbes piece from 2001 estimates US revenue at less than $4bn. It concludes:

The industry is tiny next to broadcast television ($32.3 billion in 1999 revenue, according to Veronis Suhler), cable television ($45.5 billion), the newspaper business ($27.5 billion), Hollywood ($31 billion), even to professional and educational publishing ($14.8 billion).

A more recent study done as part of an attempt to understand the social impact or porn is more generous to the industry. The study, Industry Size, Measurement, and Social Costs is by K. Doran In an attempt to validate the Adult Video News estimate that internet porn generates about $2.5bn in revenue in 2005 he goes throughout eh following logic:

According to the PIAL 2005 May tracking poll, 66% of Americans aged 18 or over used the internet, and 11.25% of these (about 16.7 million) accessed pornography. According to the May 2004 tracking poll data, 20% of internet pornography consumers admit to paying for online content, which, combined with PIAL’s finding on consumption, yields about 3.3 million paying internet pornography consumers in 2005.

These numbers could be an underestimate, because people may fear revealing themselves as an internet pornography user during a telephone survey. But dividing the revenue estimate by the pornography consumer estimate helps evaluate whether either of them seems to be biased in the directions we fear.

So I divide the $2.5 billion by 3.3 million consumers to get $737 per paying customer per year, or $61 per month. Pay sites charge $10 to $100 per month (in 2007, for example, Vivid.com charged $30 per month), so $61 per month is a fairly reasonable average. Thus, the $2.5 billion in annual internet pornography revenue and the 3.3 million internet pornography paying customers seem reasonable estimates.

The numbers become more plausible if you accept that many actual paid consumers of pornography won't admit it to strangers.

Putting all this into perspective suggests that the porn industry in the USA might reasonably be of the order of a $5bn to $10bn a year industry. This is small compared to internet commerce (Amazon alone is $30bn-$40bn) or Hollywood (in the USA about $10bn box office and $20bn DVD, see this great visual aggregation here).

It isn't even obvious that porn constitutes a big proportion of internet search traffic, according the The Straight Dope.

So I think it is fair to say that the internet has propagated badly sourced and low credibility estimates about the scale of porn because they sound sensational rather than because they are plausible.

Update with a recent internet survey A recent survey of internet searches (reported here, possibly NSFW) reported the following:

Neuroscientists Ogi Ogas and Sai Gaddam, authors of the best-selling book, A Billion Wicked Thoughts, provide much of the inspiration for “Universe of Desire.” Ogas and Gaddam gathered and coded 400 million internet searches, 55 million of which (or roughly 13 percent) proved to be searches for some kind of erotic content.

That is much lower than the numbers often quoted.


Further update

A recent estimate of the amount of web traffic related to porn made a good attempt to put some of the exaggerated numbers in context and also arrived at a low estimate. In addition to debunking many recent "shock horror" newspaper headlines it came to this conclusion on web traffic by studying Alexa statistics:

Of the 400 sites ranked from 101–500 on Alexa’s list just ten are in the business of delivering adult content; there are eight more free porn tubes to add to the six in the top 100 plus one more adult webcam site and an adult dating site, and collective these sites generate just 0.158% of global monthly page views, which is 2.65% of the total amount of page view traffic generated by those 400 sites.

Overall, the figures here seem to present a relatively consistent picture, one which suggests that overall, adult websites account for no more than 2–3% of global Internet traffic, measured in terms of both individual visits to websites and page views, and to put that in perspective, if you add together the monthly visitor figures for the ten busiest porn tube sites on the Internet, you’ll still come up 25 million visitor short of the traffic figures for Wikipedia.

So, to sum up, online porn is less popular than search engines, web portals, social media, video sharing, blogging, online shopping, email, keeping your computer’s software up to date and virus-free and Wikipedia.

So while this doesn't make any attempt to judge revenue, the traffic numbers are not consistent with the idea that porn has a major share of the internet's revenue.

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I don't have 2006 numbers, but I would say that it's possible in 2006 the revenue of the entire pornography industry was the size of half of the revenues of Microsoft, Google, Amazon, eBay, Yahoo, Apple and Netflix. But the comparison is apples to oranges, and given some quick duck-duck-going on these 3 companies, I doubt that the revenue of the porn industry is equal to half of the revenue from the above companies.

It is even more doubtful that your friends claim (which is different from the question's title) is true.

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Why all the downvotes? –  CamelBlues Jan 30 '12 at 17:12
    
+1 for you. YOu're the only one answering. –  Jim Thio Mar 9 '12 at 15:42
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No down vote from me, but this is not an answer to the question. –  Dave Hillier Mar 25 '12 at 18:14
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