Benjamin G. Edelman ’02, assistant professor at Harvard Business School, is a leading authority on the Internet. His recent paper in The Journal of Economic Perspectives, “Red Light States: Who Buys Online Adult Entertainment?” presents evidence that traditionally conservative states actually purchase more online pornography than their blue counterparts. Last week, FM sat down with him to discuss business, politics, and 3D porn.
1.
Fifteen Minutes: How did this study come about?
BGE: I’ve always been interested in funding models for online media. The question is: Who will pay for online media? Who will pay for a premium Wall Street Journal online subscription? Who will pay for a TimesSelect? So far it seems hardly anyone will pay for those services, and we see newspapers really getting squeezed. Separately, adult Web sites manage to sell subscriptions –– even though, by some standards, The Wall Street Journal and The New York Times might be more important or more useful. That was the impetus for this project –– the question of whether we could learn anything for the future of mainstream media by looking at the present of adult media.
2.
FM: What about the porn industry is interesting to an economist?
BGE: This is an industry that consistently manages to adapt innovations before just about any other sector. If you go back to cavemen, these folks were drawing adult materials on the walls of their caves about as early as they were drawing anything else. And so too for early terracotta, early photographs, early film, early recorded home video, DVD. You name it, this industry has it first. So if you want to think about the future of technology, this is a natural place to begin.
3.
FM: Okay, so, how did you collect your data?
BGE: They gave me the zip codes on their subscriber list. I asked them for the list, and they sent it over. That was that. The data collection was surprisingly straightforward.
FM: And “they” was a…?
BGE: A leading online adult entertainment provider whose name I am obliged not to report by reason of my agreement with the company. I don’t think anyone would question whether this is an adult Web site. You go there, and you see, it’s a very adult Web site.
4.
FM: So what did you find?
BGE: There are many interesting patterns in this data: patterns in consumption according to education, age, cities versus rural areas, places where people are more religious versus less religious. There are patterns along all those variables.
5.
FM: What surprised you about your findings?
BGE: Well, one basic fact that came out here is that online adult entertainment seems to be of interest everywhere. Now you can talk about where it’s of greater interest and where it’s of lesser interest. But if you compare the extent to which the United States varies by adult entertainment consumption, it seems to vary much less than, say, the amount by which the United States varies in snowfall or owning pickup trucks.
6.
FM: What have the reactions been like from your colleagues? Your parents?
BGE: My colleagues study a mix of subjects. We have people who study subjects that are absolutely sensitive...people who study fraud, people who study crime. My colleague Al Roth studies kidney transfers, including even the general possibility of selling kidneys. So no topic is off limits, and my colleagues have been supportive. Meanwhile, my parents are civil libertarians at heart. They support me in all things, and I’m greatly appreciative of that.
7.
FM: You mentioned that you worked by zip code. How were the numbers for 02138? Did we beat Yale?
BGE: [Laughs.] This is just going to take a second. It’s well worth doing. [Long pause as he crunches numbers.] I’d say the driving factor here if we compare 02138 to 06511 is that they’ve got 50% more people and only two more porn subscriptions. So I’d have to say Harvard folks are subscribing more.
8.
FM: In your results, you rank states based on adult online subscriptions. When you account for different variables, the states all shuffle around, but Utah is very comfortably at the top of every list. What is Utah’s deal?
BGE: One important difference is that if you live in Utah and want to buy your adult entertainment at a retail location, you’re going to have significant difficulty doing so. So when we look at high online purchases in Utah, we shouldn’t necessarily conclude that that means that there’s more adult entertainment of all sorts consumed in Utah. It might just mean that there’s more online adult entertainment in Utah, because there’s so much less offline.
9.
FM: Your paper mentions that free porn is an “imperfect substitute” for subscription porn. Would you elaborate on what this means?
BGE: Imperfect substitute means it’s not quite as good, or at least it’s different. So what’s different about it? It tends to be less organized; a free-site user would have to spend more time searching for the desired material. Maybe a user of a free site wouldn’t be able to get the same variety of choices. On the flipside, a paid service has problems too, starting with the fact that a consumer has to pay for it, which costs money. Also, paying creates a billing trail, records being kept of the fact that a given customer paid for this material, and a person may prefer that there be no such records. So there are these special reasons why free services have extra benefits.
10.
FM: Wouldn’t you think there would be an incentive in conservative places not to leave a trail because if you were to get caught you may be judged really harshly?
BGE: I’ve read a couple hypotheses from the bloggers and other folks who read this paper and responded online. I convey these to you without meaning to endorse them. Maybe people in some states don’t know how to get free material as easily as people in other states. That’s one hypothesis folks have offered. Or, perhaps people in some states are experts at illicit methods of obtaining what they want for free. That might be something that is differentially known in some states more than in others. Then, it might be that there’s more of a respect for law and order and copyright in some states than in others...I think these ideas are ultimately just speculative, but they’re interesting ideas. Maybe fodder for someone’s senior thesis!
11.
FM: Eight out of your top ten porn states went for McCain in 2008. You show a significant increase in porn use in places where people agree with statements like “AIDS might be God’s punishment for immoral sexual behavior.” What do you think explains this?
BGE: On a zip code level, most of the key results continue to hold. That tells me that this isn’t as likely to be a minority fighting against a majority that is suppressing their consumption of adult entertainment. It seems to imply that people in conservative places –– that the conservative people in conservative places –– are indeed the purchasers of this material.
12.
FM: On that note, could you tell us why the phenomenon happens on Sundays, according to your study?
BGE: Sure. People in religious places, where more people report going to religious services weekly –– they consume the same amount of adult entertainment [as in nonreligious areas]. That is, there is no statistically significant difference between the two groups. So they’re consuming the same amount on the whole, across the whole week. But on Sundays, they consume statistically significantly less. What does that mean? They’re taking their consumption, moving it out of Sundays and moving it to all the other days of the week.
13.
FM: You mentioned that porn has always been involved in the adoption of entertainment technologies. What can the industry teach us?
BGE: I’m always struck by the industry’s repeated willingness to jump in with both feet on whatever new technology comes along: “Online video conferencing? Great, we’ll try it.” “High-definition video? Well, DVDs don’t seem half bad, but, okay, we’ll try that too.” Whatever it is, they’re willing to go along with it. I’m not sure you’d say the same thing about the mainstream content businesses in the United States. Now, they have significant challenges in adopting new technologies. They have long-term contracts. They have many parties, all of whom need to agree to move to the new technology. But maybe that’s part of the problem. They’re not set up to be as agile, whereas in the adult entertainment business, companies tend to be small, very efficient, and quite agile. They can move to the next thing as soon as the opportunity presents itself.
14.
FM: There’s a striking anomaly here, though. Why don’t we have 3D porn?
BGE: Not every new technology will be a winner. And to be sure, the adult entertainment business adopts plenty of technologies that don’t turn out to gain widespread appeal. So on 3D, with the polarized glasses, I wouldn’t be surprised if some of that actually does take off in due course. To date, the technologies have always seemed a little bit goofy to me. You have to wear some strange set of glasses and the pictures are harder to see. It gives you a headache after a while. It’s not the huge winner that it might be someday when the technology moves that much further.
15.
FM: You’ve praised the innovation and spectacular growth of the porn industry. Meanwhile, Harvard students across campus are having trouble getting I-Banking jobs. Will the Northwest Valley be the new Wall Street?
BGE: [Laughs.] Times are tough, but my general advice remains the same: creative, innovative entrepreneurship. Start a business, run a company, build a better mousetrap. That’s where the future lies.
