Although porn and adult websites have become popular for both website owners to invest in and consumers to access, over the past few years, there has been a regulatory crackdown on the industry. From trying to curb the rise in piracy to making it harder for young people to access porn, how can these regulations impact the potential profitability of your porn website?
In this article, Adult Site Broker investigates the impact of these regulatory changes on adult investments.
Before we start, a disclaimer. We are not attorneys. Before making any legal decisions, make sure to consult a licensed attorney in the areas in which you plan to do business.
What is the Current State Of Investing In Porn Sites?
Buying a porn site has become a popular way to make revenue through the adult entertainment industry, whether as part of a bigger business plan, such as owning multiple porn sites and other adult websites, or as a way to monetize your content.
However, when it comes to investing, many VCs and Angel investors tend to shy away from the porn industry due to its high-risk nature, often because of their high rates or potential issues when processing payments.
There are also problems such as ‘vice clauses’ where LPs state that the VCs they invest in can’t invest in specific industries, including porn and the adult industry as a whole. Societal pressures and the taboo nature make investors wary of doing so.
However, that doesn’t mean there aren’t investors actively looking to invest in the adult industry, recognizing the growth potential. However, these investment opportunities are determined by outside factors, including regulatory changes that could affect the industry. These new regulations can affect adult websites’ credibility, profitability, and operationality.
What New Regulations are Affecting the Porn Industry?
Age Verification
The new, stricter age verification laws that are coming into effect across Western countries are going to impact porn sites a great deal. From 2024, users of porn sites in many jurisdictions will have to verify their age by sending a picture of their government ID or undertaking focal age verification via a webcam or their phone’s camera. This has already caused an uproar, with people choosing not to sign up to porn sites because they don’t want to share their details, or sites like Pornhub refusing to comply by preventing people in those countries or states from accessing their sites.
DMCA
As piracy rises within the porn industry, with many membership sites and content creators reporting their content being stolen and uploaded on free porn sites like Pornhub, XHamster, and XVideos, DMCA takedown notices are being used to crack down on stolen content.
Web Blocking
Along with stricter age-verification rules in countries like the US and the UK, other countries have taken it a step further. They are blocking porn altogether in their countries, which means that as a porn website, your site may not be able to be accessed in these countries, including China, Pakistan, parts of South East Asia such as the Philippines, Thailand, and Malaysia, and the Middle East.
What is the Impact of these Regulatory Changes on Porn Investments?
So, what impact do these regulatory changes have on investments in adult websites?
This section breaks down how it affects investors, buyers, and owners/potential sellers of adult websites.
For people looking to invest in the porn industry, this can make it harder for those looking for investments for their porn websites to get the funding behind them. It can also impact buyers’ willingness to invest in buying adult websites, seeing the industry as too risky to make a profit.
For those who already own an adult website, this will also impact you at an operational level, requiring you to budget for and invest in the latest age-verification tools and affecting your ability to operate in specific countries.
These external regulations can also impact your profitability; if you have previous issues with DMCA takedown notices or have been caught not upholding data and privacy regulations, you may find that your profits go down as you pay fines or when it comes time to sell, your potential buyers won’t offer a fair price, causing you to lose out financially in the long run.
Conclusion
As we conclude, it is also worth understanding that new regulations are coming as countries look to keep up with the rise of AI porn and deepfakes.
What this could mean for the industry is still unclear. However, the use of AI within the adult industry has become popular; staying up-to-date on the latest porn industry regulations allows you to make strategic decisions on what is best for you and your porn website in the long run, including if it is the right time to sell.
To wrap up, understanding these new legal and regulatory changes affecting the adult industry is crucial when determining whether now is the right time to buy or sell your adult website and when seeking adult investors.
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