In Asia, cyber-porn pulls a crowd

New data shows that in Asia, sex sells online

In this story: Not just a guy thing A different approach Big and small, something for all RELATED SITES

By Shane Abrahams

HONG KONG, China -- There's an old adage, that sex sells. And nowhere is that more clearly demonstrated than in Cyberspace.

A recent study by Internet usage measurement company NetValue shows that 8.49 million Asian Internet users visited adult web sites in January. That figure is equal to 49.3 percent of all active Asian Internet users.

Furthermore, most users spent the better part of an hour on adult sites during the month, with Hong Kong users racking up an average duration of 83.1 minutes spent on adult sites.

The NetValue figures also reveal that online pornography is not just for lonely young men sitting in front of their computers. A high percentage of Asians visiting adult sites are women.

Not just a guy thing

For instance, in Korea, which has the highest number of visitors to adult sites at 5.44 million, 39.1 percent of visitors are female.

And, even in traditionally conservative Singapore, 26.8 percent of the city-state's 243,430 visitors to adult sites were women.

However, while many mainstream Internet companies may look enviously at the adult sector's traffic figures, they could also learn a thing or two from the business models being used by the companies behind these sites.

As Gartner Group research director Joe Sweeney explains, nearly three years ago, the online adult industry was going through its own boom period, with many small operators all hoping to make a fortune.

However, the bubble burst with too many sites appearing and consumers became more discerning. This left a small number of large players and many smaller operators, who are able to survive -- albeit with a slim profit margin.

A different approach

Many of these companies have succeeded by adopting innovative business models and Sweeney says there are lessons for the rest of the Internet industry.

Many people credit pornography with launching a wide range of technologies, from VHS to streaming media. But, Sweeney says the sector is an innovator of business models and services, not technology.

"What adult entertainment sites have done is adopt technology invented elsewhere, and often for different purposes, to constantly improve customer service or make their business model more flexible," he says.

In the case of video streaming, this meant using it to promote the sale of third party products, such as videos and DVDs. It was not originally intended to be a product in its own right, although it has since given rise to new types of online businesses.

Sweeney said: "Traditional businesses on the web should begin examining how they can leverage existing technologies to create new services and product offerings or even entirely new business models."

Big and small, something for all

Another area adult sites have excelled is in traffic management. Many of the larger sites also operate smaller sites, which are designed to capture users, and discover their tastes, before sending them on to the main site.

And, if the main site is unable to cater to a particular taste, they are bombarded with advertisements for sites operated by other companies. These sites then pay a referral fee to the original site.

"The golden rule is never let anyone leave your site without knowing where they are going to next," said Sweeney.

Adult sites have perfected the development of smaller niche sites. These encourage users to form communities, and are less expensive to run than all-encompassing mega sites.

With users apparently lapping up the services being offered by adult sites, Sweeney believes the rest of the Internet should shake off its distaste for pornography and start taking notes.

Gartner.com

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