Adult Entertainment on a Cell Phone Near You

One reason the Internet gained as much interest as it did in its early days was the convenience that it offered individuals interested in pornography. No longer did they have to visit adult bookstores in person; with a few keystrokes the materials were delivered directly to their personal computers.

Now, convenience is helping to spawn a new market for pornographic materials on mobile devices such as cellular phones and personal digital assistants. In fact, Juniper Research Inc. estimates that worldwide revenue from this market segment will jump from US$500 million in 2004 to $2.5 billion in 2009.

“Along with games and infotainment, adult content will be one of the leading content types driving the initial use of mobile entertainment services,” said Windsor Holden, an industry analyst with Juniper Research.

Hot, Hot, Hot

While the topic of pornography often generates heated debate, there is no disagreement that it is a significant business. Juniper estimates that the annual revenue generated from adult content ranges from $31 billion to $75 billion worldwide, depending on which items are included. Offerings range from strip clubs to magazines, telephone sex lines and sex toys.

Handheld devices are already among the channels used to deliver adult content. Companies such as Dirty-Text Inc. have been offering pornographic chat services, in which salacious simple messaging services messages are sent to mobile devices for a fee. These services are cheap to produce but relatively expensive to the end consumer, making for a lucrative business model.

Technical advances are now enabling delivery of new services. Recently, handheld devices have gained more processing power, cellular networks increased the volume of data they support, and phones now include cameras and high-resolution displays. That means multimedia services are possible. “The ability to download images to handheld devices has made pornography more attractive to some users,” Neil Strother, an industry analyst with In-Stat/MDR, told TechNewsWorld.

Companies such as Hotphone, Pornforyourphone, Private and Voooyeur started out offering still images to mobile phone customers but have recently been moving to video clips and video streaming. Available content now ranges from models disrobing to hard-core pornography.

Regulatory Measures

As such content becomes available, governmental bodies are likely to move to refine regulations for its distribution. The U.S. government has struggled to put laws in place to monitor the flow of pornography on the Internet and has been trying to craft a version of its Child Online Protection Act with wording that is acceptable to the U.S Supreme Court. In the interim, a number of states have passed laws to prevent pornography from falling into the hands of children.

Worldwide, regulations vary dramatically. Asia has been at the forefront of next-generation multimedia cellular network services. Korea and Japan have deployed sophisticated 3G cellular networks that deliver 100 to 300 kilobits per second (kbps) network connections to users. Currently, those governments are grappling with the types of restrictions they want to place on adult-entertainment materials.

In countries including China, India and Pakistan, pornography is frowned upon and severe sanctions are possible for both content providers and users. The same holds true in many Middle Eastern countries. Europe has been a little slower to deploy 3G networks and develop policies that regulate the distribution of pornography.

Internet service providers (ISPs) have differing views on the matter as well. The large providers are concerned about the potential backlash that could arise as customers understand that they are distributing such materials, while smaller providers view the market as a potential money maker.

Legal Obligations

There is also a growing concern among the content providers about their legal obligations as these new services gain customers.

“Unlike the Internet, there is virtually no free adult content available via mobile wireless devices,” said Juniper Research’s Holden. As a result, he said, anyone who acquires the materials must engage in a commercial transaction, and these transactions can be traced, which could potentially make suppliers and subscribers liable in various countries.

In the U.S., service providers recently began to examine the impact of mobile pornography more closely. In January, the Cellular Telecommunications & Internet Association, a special interest group for cellular service providers and equipment vendors, formed a study group to examine what role ISPs can play in monitoring the delivery of pornographic materials to mobile handsets. During the spring, the group plans to outline a series of best practices, such as putting in filters to slow the distribution of offensive materials, that it will encourage members to follow. It also plans to develop a rating system that will help end users monitor the suitability of mobile content arriving on their handsets, according to Joe Farren, the group’s director of public affairs.

The adult industry itself is split as to the role that the mobile channel will play. Some see it mainly as a way to sell other products, such as DVDs and magazines, while others view it as a stand-alone business that can be profitable by itself.

Juniper expects the market for first-generation services, such as SMS, to grow until 2009, when the simple text-based services will be superseded by rich-media content.

“Quite clearly, the revenue figures will be skewed slightly by the minority who are addicted to ‘dirty talk’ and chat services, but, generally speaking, we expect … the average usage will increase in the short term especially in countries, such as the U.S., where the phenomenon has yet to take hold,” Juniper Research’s Holden told TechNewsWorld.

More Variety

As the market expands, the variety of available services is also expected to increase. Suppliers are now offering new items such as instant screensaver images of naked women, which have proven quite popular. Juniper, which includes all of associated items in its revenue calculations, anticipates that vendors will adopt various pricing models so that users can buy individual items or group them together as part of a package.

Though some may protest, it appears the market will only grow. “While the market for mobile adult content is in its infancy, it will be undoubtedly be propelled both by the increasing availability and adoption rate of 2.5G and 3G services, and by the increasing number of adult services,” concluded Holden.

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