Given this post’s title, I expect lots of PragmaticallyPolitical “virgins” who are disappointed to see such a bland blog. Please forgive my shameless attempt to fuse fun and web traffic, economics with pornography.

This post is mainly to carry the message from an article on wired.com: Sex isn’t selling! Sales are down .3% and rentals are down 10-15%. Conventional wisdom always held that in a down-trodden economy, invest in illicit smokables, drinkables, and watchables.  From 2000-2002, the Standard & Poor’s Casinos and Gaming index grew 115% and the S&P 500-stock index fell 47%.  The reason is that people who are struggling, will continue to spend money on booze, cigarettes, and pornography. No way to kill the pain of unemployment like lighting up, knocking back a couple, and …well, you know. Also, these industries are so highly regulated that entry is nearly impossible. While regulation is the reason alcohol is so damn expensive, it also insulates brewers and distillers from competition. With artificial protection, there is no wonder why these companies do so well while everyone else struggles.

Charles Norton famously developed the Vice Fund in late 2002, which solely invests in gaming, alcohol, tobacco, and brewer/vintner companies. The fund has fallen almost 9% YTD, but otherwise has had good returns over the past few years. I say let hippies and philanthropists invest in “Green” and “Humanitarian” funds, I’d have much more fun knowing that buying some 6-packs and playing slots is boosting my portfolio.

Yet, there is this odd case of pornography, which hasn’t benefited from our economic woes. My hunch is that sales and rentals are falling off because the government can no longer protect the industry. If a company goes online, and especially if it isn’t attempting to turn a profit,  there are no barriers to entry. As myriad celebrities have proven, any idiot with a video tape and a computer can distribute a sex tape. The government is, thankfully, powerless to stop the free market.

The other cause of hard times for the adult film industry is pirating. Even those movies which are professionally produced and distributed can be had for free. Various torrent websites allow for illegal downloading of anything from Tommy Lee’s new CD to Tommy Lee’s sex tape. Therefore, there is little reason for anyone with high-speed internet access and a desire for law-breaking to go to a store and buy a DVD.

While the internet has made nearly every industry (except for USPS) harder, better, faster, stronger, adult films have seen a skyrocket in supply and a decreased demand. All of this spells doom for our video vixens.

Though I adamantly and truthfully deny any illegal behavior, I don’t think it is immoral, unimportant, or even childish to worry that the formal viewing of the world’s oldest profession may be going out of style.