Pornography is the new lagging indicator

adult store signJust a month after Geoff Williams reported that the economic stimulus package was stimulating more than just checking accounts, it turns out that the adult entertainment industry isn't able to keep it up. Wired reports that the porn industry is feeling the effects of increased oil prices as well as restricted consumer spending. These factors are further exaggerated by an onslaught of piracy and free amateur content. The economy is affecting everyone in the industry, from the producers to the front line retailers who are experiencing rental drops of up to 15% and DVD sales falling as well.

I think I've exhausted the number of play on words I can include in one article so I'll take a break to examine what limp porn sales mean for the economy (seriously I'm done now). While it can be argued that the industry is simply coming to grips with the same factors that have been affecting the music industry over the past 5 years that answer is simply the low hanging fruit. It's not like free and pirated porn has grown so much over the past year that the industry is tanking just because Joe Schmo is sharing pics of his ex girlfriend. Porn is actually a lagging indicator of the economy, much the way that online advertising is considered a lagging indicator.

For example if you were watching a movie late at night and Ron Jeremy shows up in the first few minutes, that would be a leading indicator since it is showing you were things are going. There are also coincidental indicators like the husband returning home right as Ron and his wife head upstairs. Finally a lagging indicator would be tantamount to the husband finding his wife's best lingerie on the kitchen floor as he enters his house. It's a lagging indicator because by the time he can confirm it, the "action" has already taken place.

Since pornography is a lagging indicator we can't use it to predict what the economy as a whole will do in the near future. The downward trend facing the adult entertainment industry signals a shift in consumer priorities. While vices traditionally do well during economic trouble because of people clinging to them as things get bad pornography is the least acceptable of the popular vices making it the easier choice to ax. Let's face it when you have to choose between "Susie's Sorority Sweeties" and dinner rational consumers will choose sustenance over satisfaction.


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