The pornography industry hasn’t done too badly out of the internet – until now, that is. The smut business is in trouble, according to Conde Nast’s Portfolio.com:

Three years ago, 80 percent of Vivid’s income came from DVD sales. Today, Hirsch puts that number at about 30 percent, with the rest coming from a fragmented range of sources: subscriptions to Vivid.com, pay-per-view TV, internet video-on-demand, merchandising, and mobile-phone deals. Domestic DVD sales are down 35 percent this year alone. His revenue is flat, he says, but that’s mainly because he’s been cutting costs. Within five years, he claims, DVD sales will be close to zero.

…Few industries, if any, figured out e-commerce faster than the adult-entertainment business, and online DVD sales soared as a result. But Web 2.0, the catchall term for the crush of user-driven startups that have emerged in the past few years, has left the porn industry’s biggest players scrambling to keep up. For the first time, technology is hurting Big Porn. “Everyone was excited because they thought the internet was going to affect our business in a positive way, and it’s been the opposite,” says David Joseph, the founder of Red Light District. “It’s been a little scary.”

Worth reading (and smut-free).

[Via Metafilter]