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There's three underlying issues here that drive these decisions: 1) Legal and financial risk, the adult industry sees a vast amount of fraudulent transactions.

by ig1 13y ago

There's three underlying issues here that drive these decisions: 1) Legal and financial risk, the adult industry sees a vast amount of fraudulent transactions. That's the primary reason that most financial institutions won't deal with it, but there are specialist payment providers who will. 2) Ethical reasons. Many companies won't work with tobacco, alcohol, gambling, porn and other vice industries because it doesn't fit with their corporate objectives. 3) Marketing reasons. Even if a company doesn't intrinsically oppose vice businesses, being involved can clearly impact public perception of the business. This is a much bigger deal if you're running a multisided business like a social network or an app store because it can cause your entire business to shift because of the feedback loop.

wereHamster 13y ago
To your second point. Aren't the corporate objectives of all US companies to make a shitload of money for their shareholders? If so, they should be jumping on all those businesses like horny teenagers, because those businesses make a lot of money.
- ig1 13y ago
  You're mistaken, there's virtually no money in the online adult entertainment business. The entire market size is only a few billion in annual revenue and it's primarily long tail, the majority of the larger players (ala Playboy) are losing hundreds of millions of dollars every year. It's a small fragmented market which is shrinking every year.
  - olalonde 13y ago
    That's true. From Wikipedia: "In 2007, Bang Bros generated a sales total of $1.9 million." That's very tiny given that BangBros is a pretty big player in that industry (2,898 Alexa rank for a paywalled site).
- mseebach 13y ago
  Well, you answered your own question there, it seems. A good rule of thumb, even if something is "common knowledge" on the Internet (OMG evil corporations profit), there's probably more to it.
jasonlotito 13y ago
> the adult industry sees a vast amount of fraudulent transactions. There are two sides to this. For actual porn sites, the "vast amount of fraudulent transactions" are actually friendly fraud. Husbands getting caught and denying they did anything, or claiming to not have approved a charge. While up-sales and cross sales are contributor to this, this actually leads to much less fraud then you'd anticipate. It's usually the 3-day free trial that gets people (and rather than contacting support, who'd promptly refund the money), they just claim their credit card was stolen. The truth is, when you compare the majority of the porn industry with the majority of the gaming, movie, and music industries (all entertainment industries), porn companies treat their customers far better than the others. Disclaimer: I worked in adult industry doing credit card processing for about 10 years.

by ig1 13y ago

wereHamster 13y ago

To your second point. Aren't the corporate objectives of all US companies to make a shitload of money for their shareholders? If so, they should be jumping on all those businesses like horny teenagers, because those businesses make a lot of money.

ig1 13y ago
You're mistaken, there's virtually no money in the online adult entertainment business. The entire market size is only a few billion in annual revenue and it's primarily long tail, the majority of the larger players (ala Playboy) are losing hundreds of millions of dollars every year. It's a small fragmented market which is shrinking every year.
- olalonde 13y ago
  That's true. From Wikipedia: "In 2007, Bang Bros generated a sales total of $1.9 million." That's very tiny given that BangBros is a pretty big player in that industry (2,898 Alexa rank for a paywalled site).
mseebach 13y ago
Well, you answered your own question there, it seems. A good rule of thumb, even if something is "common knowledge" on the Internet (OMG evil corporations profit), there's probably more to it.

jasonlotito 13y ago

> the adult industry sees a vast amount of fraudulent transactions. There are two sides to this. For actual porn sites, the "vast amount of fraudulent transactions" are actually friendly fraud. Husbands getting caught and denying they did anything, or claiming to not have approved a charge. While up-sales and cross sales are contributor to this, this actually leads to much less fraud then you'd anticipate. It's usually the 3-day free trial that gets people (and rather than contacting support, who'd promptly refund the money), they just claim their credit card was stolen. The truth is, when you compare the majority of the porn industry with the majority of the gaming, movie, and music industries (all entertainment industries), porn companies treat their customers far better than the others. Disclaimer: I worked in adult industry doing credit card processing for about 10 years.